Index
The true definition of accounting is "... the process of recording financial transactions pertaining to a business. The accounting process includes summarizing, analyzing, and reporting these transactions to oversight agencies, regulators, and tax collection entities. The financial statements used in accounting are a concise summary of financial transactions over an accounting period, summarizing a company's operations, financial position, and cash flows. "
After your business' daily transactions have been efficiently captured by our bookkeepers, our team of Certified Financial Accountants would then be tasked to perpare for financial year end.
This is where the final touches are performed to create a wealth of financial information which will then be submitted to SARS for taxation.
A trial balance represents the totals of all income and expenses accrued for the year. Your accountant would need to analyse these totals and ensure that certain adjustments are made to fully represent the business' financial health.
Depreciation on assets, sale of assets, purchases of new assets, stock variances, prepayments, accrued income, and certain other allowances would have to be taken into account to determine a true net profit for the year.
Annual financial statements are financial reports based on a 12-month consecutive time period. The most common set of financials are based on the calendar year, but they can also be based on a company’s fiscal year.
A cumulative international reporting standard of all financial transactions must be prepared and presented for approval by the business owner, for submission to SARS.
Financial statements are a legal requirement for freelancers, contractors, sole proprietors and all businesses in South Africa and are presented to SARS for taxation.
The balance sheet lists a recap of the company’s assets, liabilities, and equity that existed at the end of the year. This report is a snapshot of the financial position of the company on a single date in time.
The income statement reports the income and expenses of the company during a period of time. Since the time frame covered by the income statement is larger than the time frame covered by the balance sheet, the income statement is considered to be more reliable or at least a more complete view of the company activities.
The rate of income tax payable is dependent solely on your business structure. Both provisional tax and annual income taxes are based on this structure. Our team of skilled tax professionals have the know-how to ensure that your tax liability is not inflated by any means.
SARS, being a rigid and inflexible institution, demands that transactional records are maintained and stored for up to 5 years. Taxation rules are stringent, and taxes are imposed on net profit, depending on what category your trade falls under, for example:-
- Sole Trader
- Micro Business
- Small Business
- Corporation