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Accounting & Payroll

Paying Yourself First

Are you one of those entrepreneurs whose business makes money, but at the end of the month, you don’t seem to?

Donna McCallum




Do you pay yourself first?  Or do you pay yourself the ‘scraps’ left over once everyone else has been paid?

You have probably heard of the “Pay yourself first” concept, but the key question is, do you apply it?

As an entrepreneur, I know full well how it feels to pay everyone else first and then have nothing left for myself at the end of the month.  I did it for a few years on my own entrepreneurial journey.  After awhile it doesn’t matter how much you love your work or your business, if you are not paying yourself a good salary and paying yourself first you will be left feeling resentful and unhappy.  Neither of these emotions are productive for a thriving business.   Ask yourself…

  1. Who cares the most about this business?
  2. Who works the hardest in this business?
  3. Who is the most passionate about this business?
  4. Who has taken the risk on this business?

The answer, of course, is YOU and that is why YOU need to be paid first.  Without you – your passion, hard work and talent – the business wouldn’t exist. Thus you need to be rewarded first.

The moment you prioritise yourself in your business, is the moment that you will begin creating wealth for yourself through your business.

The question most entrepreneurs (who don’t pay themselves first) ask is “but what if I can’t pay my bills at the end of the month?”

The answer:  You are an entrepreneur and you’ll make a plan.

Some of your creditors may need to wait a week or two, but you will make a plan. I have experienced with the “Pay yourself first” phenomenon, once I started paying myself first the amount of money coming into my business increased to allow me to easily pay all my bills at the end of each month. I have observed this phenomenon it with many people who have done my Money Magic program too.  I can’t explain why, but prioritizing yourself attracts more money.I prioritise my payments in this order

  1. Pay myself first
  2. Pay taxes second
  3. Pay my lifestyle third (budgeted and within my means)
  4. Pay my business expenses last (and pay them in order of priority most important service provider to least important service provider)

You started your business with the goal of making money and creating wealth for yourself.  It is time to do so.  No-one else has the job or purpose of making you rich and wealthy.  That’s up to you.  If you don’t put yourself first, no one else will.

Upcoming Courses

Money Magic Seminars in October

In October, Donna McCallum  (aka The Fairy Godmother) is doing her 3 hourMoney Magic Seminars around the country to empower YOU create real wealth.

During the session you will learn about your relationship with Money, why you have the current Money Habits you do and how to change them into empowering habits to create real wealth.

Cape Town – Tuesday 11 October 18h45 – 22h00

Johannesburg – Thursday 13 October 18h45 – 22h00

Durban –  Saturday 15 October 10h15 – 13h30

Price: R200

To book your place go to: or call 084-207-0202 or email

Donna McCallum is also known as the Fairy Godmother. She has helped thousands of people in South Africa, the UK and the US focus on their dreams and goals. She is the author of The Fairy Godmother’s Guide to Getting What you Want and runs empowering 12 Week Money Magic Online Programme to help people transform their relationship to money. Prior to being a Fairy Godmother, Donna was a successful entrepreneur having started, built and sold businesses in media and marketing. For more info on Donna and the Money Magic courses, visit the Fairy Godmother website.



  1. Ann Williams

    Sep 29, 2011 at 10:25

    Sorry but I really do feel that the first obligation that you have as a business owner is to pay your staff first. You have made a contract with them and being out of integrity with them will do more damage than not paying yourself a full salary ever will.

  2. Haroun Kola

    Sep 29, 2011 at 11:42

    Thankfully I don’t have ay employees. we should all be independent contractors!

    • Ann Williams

      Oct 8, 2011 at 08:07

      Yes, it’s a responsibility. I think Donna is aiming at the entrepreneur who is ‘owned by’ their business rather than being a ‘business owner’. It seems to be a case of striking a balance between being a slave to one’s business (where everyone else’s needs come first) and not being responsible for others…
      I sorry that I won’t be able to attend this particular session because Donna’s reputation is awsome! She also runs what looks like a really cool online course so that anyone from anywhere around the country can still get the benefit of her wisdom (and fun attitude) about money – even if they are not in one of the main centres where she holds these introductory sessions.

  3. dyambu1

    Sep 29, 2011 at 14:14

    It now makes more sense to me. I will adopt the concept with immediate effect (although I may need an overdraft to pay my staff second. They are just less important than me but hey they are as well). Thanks for the eye opener!

  4. Josef

    Mar 25, 2012 at 17:04

    Pay yourself first is a great financial model to adopt, but many of those people who talk about this model seems to miss the obvious thing that makes it workable: decrease spending, increase profit and THEN take the increase in profits out of the business as a “pay yourself first” transaction. I once heard an expression that said that you first need to create space in order for success to happen. Well, in this case you need to create the profit space first, before you can pay yourself first (or pay yourself more). It’s pure common sense. There is no need to leave any creditors, employees etc waiting for weeks. Just change the situation so that everyone recieves their fair share of the money pie. When it comes to taxes: you can still pay taxes first and take your cut after that. If you can´t take your cut after taxes, then you need (once again) decrease your supplier spending or let some employees leave their job, BEFORE you pay yourself first. It seems like you somehow go on hope. “I pay myself first and somehow I will afford to pay creditors later”. That doesn´t sound like a rational plan, my plan is. You can´t act on hope, but you can act on pragmatic plans. People who have a well thought-out plan have no need for hopefulness.

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Accounting & Payroll

How To Strategically Minimise Accounting Costs As A Start-up

“Financial Compliance can be a costly exercise when approached carelessly”.

Kenlin Stride




As a practicing accountant one of the most common phrases uttered by clients is that “I will get to my accountant when I can afford one”. The reality is your accountant costs can be minimised when you applying some simple tricks to avoid being charged an arm and a leg.

I have compiled a few areas where you can streamline your business to minimise your businesses accounting fees. Please bear in mind these are guidelines and a consultation with your accountant will still serve you best.

1. The ‘Shoe Box’ strategy is dead and gone

The shoe box is a box filled with all your company and supplier invoices jumbled into one box. As an accountant when faced with the shoe box we smile because now we get to charge our hourly rate doing admin that could have been done by either you the business owner or one of your employees. Accountants make a large portion of their turnover from doing admin that could have been avoided if business owners had more foresight.

2. Separate personal from business transactions

Nothing is more time consuming for an accountant then having to comb through a business income and expenses only to realise through consultation with the client that personal items were accounted for as business income or expenditure.  As a rule of thumb remove all personal income and expenditure from your business in totality.

Related: Financial Management and Accounting Support for SMEs

3. Record keeping! Record keeping! Record keeping!

Simple record keeping can be your best friend in reducing costs. Here are a few guidelines to live by:

  • As pointed out in Number 3 have a separate bank account for business and another for personal
  • Date and Number your invoices, sounds simple but very few start-ups put emphasis on this administrative function.
  • Provide complete statements for the period requested by your accountant for your credit card and bank statements.
  • Keep supplier statements as this will aid your accountant especially during the financial year end of your business.
  • When submitting your debit/ card receipts and there is no accompanying invoice list on those receipts what was purchased.

4. Ask your accountant for a Retainer Agreement

A retainer agreement is a great way to ensure your monthly accounting costs do not fluctuate. With a traditional agreement your fees may spike when it is your company’s financial year end or when your taxes are due. With a retainer agreement your able to budget for a set figure payable monthly. This also translates to an attractive for your accountant who can now rely on a guaranteed cash flow injection monthly.

The bases for an accountants pricing will involve what their hourly rate is , the longer they spend on doing record keeping and deciphering what activities took place in your business the more you will be charged. Remember regardless of how close you are with your accountant or how simple you feel your business structure is your accountant will need as much information as possible to represent your business activities accurately on your financial records.

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Accounting & Payroll

Technology In Accounting – Race For Relevance

Change is not just coming, it’s already here and the rate of change is growing exponentially.






Change is not just coming, it’s already here and the rate of change is growing exponentially. The recent research from ACCA around the race for relevance talks of six key technologies (Analytics, Artificial intelligence, Cloud computing, Cyber, Social and Robotic process automation), likely to present opportunities that challenge our traditional ways of working to all businesses, including SMEs – as well as their finance function.

The report explains that whatever the size of the business, technology change is having an impact.

It is imperative for SMEs to understand these technologies and start to, at least, plan. Failure to capture opportunities runs the risk of businesses being marginalised.

Technological advances provide finance functions with significant opportunities to play a valued role in maximising the organisation’s strategic ambitions and in how it is evolving. Not of all the key technologies may be relevant to all immediately, however, understanding which of them apply and can deliver value, is important.

Related: Want To Know Your Numbers? 3 ACCA Accounting Online Courses Your Can Take For Free

In this corporate race for future relevance, recognising the opportunity is essential.  Organisations are in a race to remain relevant to their customers and communities. Adapting and embracing technological changes in business is critical. Companies who leverage new technology well are going to win big in business. If CFO’s are to remain in decision making roles the need to understand the importance of data analytics is crucial. Businesses need forward thinking CFO’s who:

  • understand how to use the information available to them to provide strategic insight in real time;
  • capture, measure, report and predict future performance in a much more agile manner to support better and quicker decision making;
  • ensure they have in place effective and efficient processes that satisfy the overall business requirements of finance.

This is not to say that there is one approach. No single model fits all finance teams but there is an overall direction of travel. However, its not enough to become more efficient, but finance function must assist businesses to make decisions based on the right data. To achieve the goal of transforming the finance function, the CFO needs an understanding of the emerging technologies and the opportunities available. The CFO must ensure that there is sufficient governance of the data sources, be these internal or externally generated, to provide insights based upon ‘one version of the truth’.

Related: 4 Accounting Online Learning Courses From ACCA You Can Take For Free

In realising the finance technology strategy, it should be remembered that this is often a partnership between the Information Technology (IT) team and the finance function. As business partnering has affected the relationship between finance and its customers so the same process can be replicated in the relationship between finance and IT.

By 2020, organisations are expected to gain $1.2 trillion in business from their slower-to-adapt peers. How do you, as the accounting professional, influence this today? How do you work with IT to thrive in this age of change?


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Accounting & Payroll

Can Computers Replace Human Accountants? We Doubt They Can

People remain paramount to the accountancy profession despite advanced modern technology and artificial intelligence. But accountancy is no longer just about financial statements and tax returns.






“The secret lies in embracing the technological advances without sacrificing the values and ethics that sustains and defines the profession,” says Jeanne Viljoen, Project Director: Practices at the South African Institute of Chartered Accountants (SAICA).

“Don’t fear technology – embrace it and use it wisely. By embracing technology, the profession can provide deeper insight to their clients while helping them understand the rapidly approaching ‘new normal’ for business operations.”

The radical transformation of accounting

“It is no secret that accounting has been radically transformed by globalisation, digitisation and a growing amount of technological integration into business operations.

External disruptors, like the use of big data, the cloud and distributed ledger technology also affects the profession, but computers will never replace human interaction or advice.

Computers and algorithms may increase accuracy and can crunch numbers and vast amounts of information at increasing speed, but they have no feelings and cannot learn common sense or the ability to plan creatively. They also cannot deploy human judgement or professional scepticism,” Viljoen continues.

Related: From Local To Global: Bruce Mackenzie CA(SA) Shares Top Tips On Being A Successful Entrepreneur

This, paired with a human accountant’s technical knowledge and adherence to a global Code of Ethics and international standards applicable to certain types of engagement, offers vast new potential for accountants to accurately interpret data and develop insights that will underpin more valuable strategic recommendations for their clients.

The focus of accounting is changing

“While traditional services will continue to remain an important part of what accountants do, the focus will be different. The biggest benefit of using artificial intelligence (AI) instead of manual bookkeeping, is probably the time it frees up for accountants to provide strategic advice to businesses and organisations.

Real-time accounting can help small to medium businesses to take decisions when needed instead of waiting for months for financial statements.”

Correct analysis of business data is exactly what gives a business a competitive edge and help generate a higher profit margin.

“If, for instance, your company sell products online, software that enables you to determine when your customers are most active online will help you determine the best time to market to them. The correct technological systems and software can make your business lean and mean and will enable a total overview of your business at the press of a button.”

Related: Financial Management and Accounting Support for SMEs

This can prevent relatively small problems like absenteeism on certain days and over claiming on business trips to turn into big crisis situations.

“This is exactly where accountants will continue to play an important advisory role, because they are trained to analyse risks, and spot outliers, exceptions and trends.”

Accountants can also assist businesses and organisations with cyber security and successfully navigating their digital landscape, helping to avoid cyber fraud and the theft of personal information.

The future of accounting

Viljoen also referred to twelve predictions about the future of the accountancy profession made by Rob Nixon, an internationally renowned accountancy expert. These are:

  1. Compliance will be completely commoditised, meaning less “human” time spent on ensuring compliance.
  2. Cloud accounting will be installed in more than 90% of small- and medium-sized entities, because more and more people want their data and information on their mobile devices.
  3. More than 90% of accounting firms will have cloud practice management, as it improves efficiency and mobility and lowers operating costs.
  4. Coaches and consultants – even non-financial – will become competition for tomorrow’s accountant.
  5. Clients will be more transient because of cloud accounting. All that is required for data to be captured is a login code. This will result in tighter and more enduring relationships between client and accountant.
  6. Offshore teams will be more prevalent – cloud computing will enable your teams to work anywhere.
  7. Compliance prices will plummet, new systems costs will be reduced and financial reporting will be current.
  8. Marketing and sales skills will be needed – with commoditised services comes price pressure and new low-cost entrants into your market. Accountants will need to differentiate and give compelling reasons as to why clients should stay with them.
  9. Young people will not buy into staid and boring systems – they are not interested in old-fashioned systems/equipment and offices. Instead, they will be tech-savvy and will want progress faster than ever before.
  10. There will be no more time-based billing, but rather a valuation of the intellect that has taken many years to develop.
  11. The role of business advisor will result in more than 80% of an accountant’s revenue, as accountants can add a huge amount of value when they know the facts. Spending less time on compliance services will mean that an accountant will have more time to truly live up to the trusted advisor status that they deserve.
  12. Advanced technology will mean that clients are finally served properly with real-time data, resulting in the accountant adding real value to the business.

In the light of all of this, it is important for small to medium businesses to look critically at their digital strategy, she concludes. “You don’t need to buy the biggest, most expensive accountancy system. Look at your cash flow and needs and invest in a system that can grow with your business. Your accountant will be the best person to advise you on this.”

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