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Financial Management and Accounting Support for SMEs

The South African Institute of Chartered Accountants (SAICA) realised that one of the key challenges faced by SMEs is a lack of financial management and accounting support. So, as the foremost body involved in the development of chartered accountants, SAICA established an enterprise development and SME support hub — the Enterprisation Hub — in 2013.

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Vital Stats

  • Company: South African Institute of Chartered Accountants (SAICA)
  • Contact: 08610 72422 (SAICA)
  • Visit: saica.co.za

A hub of success

The Hub primarily addresses skills development and employment for young, previously-disadvantaged accounting graduates, and also provides SMEs with unique back-office support relating to accounting and management consulting services.

This model is designed ultimately to reduce unemployment among graduates, and also to assist SMEs in participating profitably in the mainstream economy.

We-recommend-tickWe recommend: Government Funding and Grants for Small Businesses

Since its establishment, the Hub has supported 138 SMEs, with 110 actively serviced clients. It has groomed 16 graduates, of whom three have taken up permanent employment at mainstream organisations.

The success of the Hub is attributed to, among others, the strategic partnerships that have been forged with leading institutions such as SAGEONE, BANKSETA, FNB, the Small Enterprise Funding Agency (Sefa), the Department of Economic Development and Guarantee Trust Corporate Support Services.

The importance of SMEs

SAICA’s project director for Enterprisation, Byron Riddle, believes that small businesses are a core vehicle for driving the development, growth, and sustainability of South Africa’s economy.

“Through the relevant training and skills development offered to accounting graduates from previously disadvantaged communities, Enterprisation also provides much-needed assistance to job-seeking graduates. This initiative is intended to support the SME market through the provision of quality services that small business owners would otherwise not be able to afford.”

New opportunities have followed on the success of the Enterprisation Hub. It has partnered with the National Empowerment Fund (NEF) to provide accounting and back-office support services to NEF-funded SMEs.

BANKSETA’s Inclusive Banking division has an initiative called the Entrepreneurial Skills Project for SMEs, which provides training and mentorship for entrepreneurs starting a business — and these entrepreneurs will be referred to the Enterprisation Hub for bookkeeping and accounting services.

We-recommend-tickWe recommend: Outsmarting The Market

Services that are offered by Enterprisation:

  • Accounting and bookkeeping
  • Business finance consulting
  • Payroll services
  • Tax registration and submissions.

While business owners have to accept ultimate accountability for their business, Enterprisation adds value by:

  • Alleviating the pressure that business owners may experience by not having access to accurate and well-maintained monthly financial records for their businesses.
  • Contributing to the overall going-concern value of businesses through ensuring accountability and good business forecasting and budgeting.
  • Ensuring that business owners are always in possession of accurate and complete financial records when applying to credit providers for additional funding.
  • Accepting ultimate accountability for the day-to-day operations of the business.
  • Ensuring that business owners understand the importance and potential benefits of up-to-date and timely tax submissions.

The Enterprisation Hub will be opening a second office in partnership with Sefa at the Riversands SME Incubation Hub in Fourways, north of Johannesburg. Other offices will also be opening in Cape Town and Durban to provide accounting and bookkeeping services to SMEs in those regions.

The South African Institute of Chartered Accountants (SAICA) is widely recognised as one of the world’s leading accounting institutes. As South Africa’s pre-eminent accountancy body, the Institute provides a wide range of support services to more than 38 000 members who are chartered accountants and hold positions as CEOs, MDs, (board) directors, business owners, chief financial officers, auditors and other leaders in their chosen spheres of business operations and public life. Most of these members operate in commerce and industry, and play a significant role in the nation’s highly dynamic business sector and economic development, but some are also employed in the public sector.

How to Guides

Fintech And Small Business Success: 5 Tips For SA’s Fintech Start-ups

Let’s look at what the future holds and how small businesses can benefit.

Colin Timmis

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Around the world, the fintech revolution is disrupting our relationship with money, both in our personal and business lives. This global market is expected to be worth $10,499m by the end of 2018 – and digital payments account for much of this growth. This means it’s an exciting time for small businesses looking to get ahead. Whether they’re fintech developers, users or both, these businesses are putting new technologies to work and benefitting hugely.

South Africa’s small business community, like elsewhere, is embracing fintech with enthusiasm. To make the most of  this energy, new incubators and accelerators are setting up shop across the country. Cape Town, for example, hosted its first ‘Startupbootcamp’ which focused on creating scalable technology solutions for financial services and related industries. At Xero, we recently launched a virtual hackathon to enable South Africa’s technology entrepreneurs to compete with other forward-thinking developers on a global scale.

Against an energetic business landscape, fintech presents an attractive market for SA’s budding entrepreneurs. In today’s competitive business environment, new technologies are key to meeting your target audience’s needs and expectations.

So, how can entrepreneurs take advantage of what fintech promises? Let’s look at what the future holds and how small businesses can benefit.

Think smart, grow fast

The range of available fintech solutions and tools is vast. However, new technologies alone are not enough to get your business off the ground – and keep it there. Here are five tried and tested tips for small business owners to keep in mind at all times.

Related: Fintech: Fusing Finance And Technology

1. Have an idea

Entrepreneurs first need an idea, then a plan supported by realistic goals. Your idea has to be good: ask yourself what you’re going to sell, and why. Once inspiration has struck, subject your idea to some hard scrutiny. Chances are someone else is already doing something similar – which is fine if you can do it better.

2. Build a plan

Your business plan is your map. It will help you launch your idea with structure and thought, and guide your company’s progression. You don’t need to stick to your plan like glue: Flexibility is certainly a virtue. A new twist or turn – as long as it’s on the right track – could take the business forward faster.

3. Be flexible

Of course, if something isn’t working then don’t be afraid to abandon it and move on. Fear of failure often results in entrepreneurs throwing good money after bad. Know when to scrap an idea, take what you’ve learnt and focus on something new. Remember, there’s no point crying over sunk costs.

4. Stay alert

When it comes to new ideas, look at what’s old and needs refreshing. Keep a constant eye out for ways to disrupt the status quo and offer people a better way of getting what they need. Even if your business is running smoothly and doing well, if you don’t stay alert, you could lose out on some low-hanging fruit to a competitor.

5. Use technology

Startups are typically constrained by limited resources – namely time, money and labour. A solid plan will help allocate your resources effectively. Fintech solutions can provide a strong backbone that helps you enhance your capacity, manage your cash flow better and improve productivity.

Related: 6 Lessons The Founders Of iKhokha Used To Launch An African Fintech Start-up

The future of fintech in SA

South Africa is fertile ground for fintech. A lack of legacy infrastructure – particularly in outer lying areas – has created a large underbanked rural population hungry for financial services. What’s more, a growing urban middle class is demanding more sophisticated solutions to outdated forms of payment processing.

Fortunately, these demands are not falling on deaf ears. The local tech community is part of a dynamic development ecosystem that is working hard to innovate tools that provide greater financial access. With a clear gap in the market and an eager target audience, the future for fintech developers and users in SA is looking stronger than ever before.

Regardless of what your business offers, where it is based, it’s size or age, it’s time to join the fintech revolution. By embracing relevant solutions, your business will become more agile, efficient, responsive and ultimately, more successful.

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How to Guides

Loan Scams: How To Protect Yourself From Loan Scams

My thoughts are that only if there is a grassroots movement by people affected by these scams to get rid of these unscrupulous marketers, will there be any chance of change.

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The current economic situation we’re experiencing in South Africa has created a strong appetite for credit. Often consumers need to borrow money out of desperation just to help them survive. It is here where scam artists and unscrupulous marketers prey on the public, signing them up for services they do not need, with monthly debit orders adding to their woes.

It’s a tactic that we’re seeing more of these days: A company advertises that they can help you secure a loan, even if you’re blacklisted. They charge you for this ‘service’ and at the same time sign you up for a bundle of monthly paid-for add-ons, hidden away in the Terms and Conditions (T&Cs).

They are doing this despite the fact that it is illegal to advertise loans to those who are blacklisted (according to the National Credit Act), and that a company cannot charge to facilitate a loan (according to National Credit Regulator [NCR]). To make matters worse, in 99% of cases, the applicant is turned down, and now has to continue paying for services that they were unaware of signing up for in the first place.

Related: The Definitive List Of South African Business Incubators For Start-Ups

This is criminal behaviour, but for some reason it does not get acted on by relevant authorities (such as the NCR) which should be protecting consumers. With an estimated one million South Africans being preyed upon like this annually, those who are tasked with watching over the consumer should not shake this responsibility. That’s not to say the marketing industry is blameless – far from it, but without a regulatory body, there’s very little to be done to act on these rogue companies. Even Google benefits from these loan scammers – just type in “bad credit loans” and see how many ads pop into the paid search results.

My advice would be for consumers to be vigilant in managing their financial affairs, especially when it comes to “too good to be believed” offers. Here are some pointers to help consumers protect themselves:

  • Never give your bank details to an unknown brand or marketing company that is not your own bank or insurance company.
  • ALWAYS read the Terms and Conditions before signing up for anything. Most of these scams work because the extras you sign up for are buried in the T&Cs, making them part of the contract.
  • Never agree to pay someone to find you a loan. The service provider is conducting an illegal act, since they cannot charge consumers for loan finding services according to the NCR.
  • As difficult as it can be, do not apply for loans if you are blacklisted as there is little chance you will qualify. These scams are run by people who feed off/take advantage of people’s desperation, so rather speak to your bank to get advice about your situation.
  • Sites such as Hellopeter are a great resource to check if companies are offering fraudulent services. It will only take a few minutes, but could save you years of problems.

As for what to do if you have fallen victim to these scams, complain in writing to the Credit Ombudsman (ombud@creditombud.org.za) as soon as possible. At this stage, we’ve lost faith in the NCR or the Consumer Protection Act stopping these types of scams. Rather get in touch with Carte Blanche, your local or national newspaper, and note it on Twitter and Facebook. My thoughts are that only if there is a grassroots movement by people affected by these scams to get rid of these unscrupulous marketers, will there be any chance of change.

Related: Seed Capital Funding For South African Start-Up Businesses

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How to Guides

6 Hacks For Getting Clients To Pay You Faster

Almost everybody pays eventually but almost nobody pays sooner than they have to. That’s a problem.

John Rampton

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Getting your clients to pay you on time is a real hassle. After a sale, it is easy to think you did your job and just relax. Nothing is set in stone until the payment is final.

Not getting your payment on time can be detrimental to your company. This is especially so if you need or were expecting that money to come within a certain timeframe. It is frustrating, and there is a fine line because often you are working with people who could be recurring, valuable customers.

Therefore, it is critical to you find ways to get paid on time. Here are seven hacks to avoid the hassle and get paid faster:

1. Set payment expectations early and give gentle reminders

From the onset, ensure that your clients know what their cost and payment schedule look like. You do not want to give them any reason for confusion or an excuse not to pay on time. Make it crystal clear when they need to pay by and how much they will need to pay. It will properly set their expectations to avoid surprises.

Related: 4 Types Of Clients Your Growing Business Can’t Afford To Work With

Offering gentle reminders about an upcoming payment can continue to keep their expectations in check. They might not be prepared to pay if they signed their contract three months ago and forgot that their payment date was tomorrow. Instead, put the pieces in place to ensure, with total certainty, that they know how much they will owe and when they will owe it.

Poor communication also sets a poor standard with your clients. It will give them the message that they can receive your services without having to pay on time. It is hard to change this precedent. Therefore, being consistent and straightforward from the very beginning will help you keep these payments coming.

2. Follow up

Do not hesitate to follow up after sending the invoice. Your clients are busy. They likely overlooked a payment if they did not make it. You can send friendly reminders to pay after a few days have gone by. No one minds a gentle follow-up as it demonstrates your ability to act professionally. I built my calendar app for this very reason. Follow up frequently till they pay.

Streamline the payment process as much as possible. There are some awesome tools to help collect payments today. The less time it takes your customers to make the payment, the faster you will get paid and the less hassle you will deal with. It is worth the upfront investment to set up the right systems in order to get faster results.

When possible, take the payment upfront, too. This way there will not even be an issue of getting them to pay. Today, people are more comfortable paying for a service before they see its full value in. Take advantage of that.

3. Offer small incentives for quick payment

Offering incentives for quick payments will speed up the process and build customer loyalty. Customers know they are going to have to pay at some point. If they know that making the payment immediately will give them an additional benefit, then they will often do so.

You can even form these incentives around your product or services. It could be sending company stickers, access to an additional feature, or a free week of service. This will reward them for paying on time and give them further reason to continue coming back.

4. Send the invoice to the right person

At larger companies, it is crucial that you send the invoice to the right person. When your clients are originally agreeing to pay, make sure they know how that payment will take place. It takes two minutes to discuss who will be making the payment, and it will save you significant stress on the back end.

Related: Great Places To Take Your Clients When Networking

5. Establish personal connections with clients

You might not always have the bandwidth to do this, but getting to know your clients will give you a much easier route to payment collection. In the case that someone has not paid, you will feel more comfortable asking them. It is easier to send a quick reminder to someone that you know than it is when you feel like you have to be more formal. Personal connections with your clients will ensure you get your money faster.

6. Think about the little things

There are a variety of small factors that add up to improve the speed in which you receive payments. Think about the time of day that you are sending the invoices out, the styling of the invoices and the actual content within them.

Related: How to Get Clients When You Hate Asking for Business

You can streamline the process with a clean and concise invoice. Make it visually appealing and include descriptions of what they are paying for. The process will slow down if you make mistakes. Instead, take the extra time to make sure that everything looks as it should.

This article was originally posted here on Entrepreneur.com.

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