General Business

The cheapest way is to form the company yourself as the only cost is the R175 fees payable to CIPC. The problem with that is that you still have to produce the share certificates, share register, obtain a tax clearance if needed and a B-BBEE affidavit if needed. It’s our 50th Anniversary so, for fun, we’ve dropped our fee to R475 which includes the CIPC fee, so we get R300. And you get the share certificates, share register, a tax clearance and a B-BBEE affidavit. Other service providers are currently charging about R2 000, which is our normal fee. But…

Despite my having written an article stating that you cannot change an NPO into a normal company, somebody booked a meeting to discuss how she could do exactly that. She was a “no show”, so I never found out what it was all about. But it almost certainly meant that she did not understand the difference between the two types of company. There’s just one difference – an NPC cannot distribute dividends to its shareholders either in cash or in kind. Now, how many private companies declare dividends? I’ve known about 10 in all of my 36 years with…

I have had some informative experiences recently regarding the price sensitivity of our products. It’s our 50th anniversary, so, I used that as an excuse to drop our price for company registrations to R175. Just enough to cover the CIPC fees. The reason that I did this was a realisation that we make our money from servicing companies with registrations, bookkeeping, payroll, returns, B-BEE affidavits and a host of other services. So why not just give them away and that way we increase our potential client base for our other services. We were inundated. I had to stop the special…

Have you noticed that SARS claim to be only 25 years old? It’s on their website when you log in. And here’s Harbour and Associates celebrating 50 years – And still many people don’t know that we are accountants! So let’s put the record straight. Here’s what we do – Financial statements with or without review Formation of trusts Formation of companies Personal and company tax Bookkeeping Payroll VAT B-BBEE affidavits Company secretarial Registrations Wills Business plans But, most of all, what we do is stand by you. I’ve been meeting people at no charge for something like 10…

We recently formed a company for someone. He wanted the name Bidvest S…….. (Pty) Ltd. I can’t say what the S…….. was but it described the kind of business that he was in. The computer at CIPC would not see a conflict because there are so many Bidvests (52 at the last count) that it would interpret that as meaning that no-one had exclusive title to the word. The name was approved by CIPC and we went ahead and completed the company registration. Shortly after that he was complaining to us that the name Bidvest was a Trademark and they…

Last week I talked about a client who is building his company on bad business instead of good business and I briefly mentioned some performance ratios that he needed to achieve in order to get things on the right path. So, if I know nothing about his particular industry, how can I tell him what he should and should not be doing? The answer is in the ratios. There are very few different types of business. Let’s take a look. Service companies. Their costs are almost entirely salaries and rental. Manufacturers. Their material costs are the highest of their costs,…

We recently completed a year’s accounts for one of our bookkeeping clients. This time around, I noticed that his turnover had shot up from R1m to R4m. Seemed like things were going well. Until I looked closer. His net profit dropped from R53K to R47K, so he was doing four times the amount of work for less profit. On R4m turnover, he should be making at least 8% profit which is R320K, but he was making about 1%. His Gross Profit (the difference between sales and purchases) was 20% of turnover for both years, which is about a half of…

If you manage your debtors, you are already a long way to a successful business. Here are a few examples of what people do right and wrong. Right. Don’t do a thing until you’ve been paid. That’s the way our practice operates, so we have zero debtors. Almost right. Insist on a 50% deposit and the balance immediately prior to installation. Almost right. “This is a cash practice. Please pay on the way out.” Note – “In” rather than “Out” would be perfect. Hardly right. Insist on a 50% deposit and the balance immediately upon installation. Wrong. “I’ll send you…

In January, we decided that we would no longer charge our services to register new companies. All that would be required was payment of the R175 CIPC fee. I was fascinated to find that practically nobody took up our offer! When it came to the on-line credit card payment for the R175, perhaps they thought it was a scam and terminated the transaction. We phoned them all and their reasons were vague. I was tempted to do the job for absolutely nothing, but decided to approach it differently first. I figured that if we make it look like a…

Many years ago, I searched long and hard for a production control package that could replace the progressively more complicated Excel workbook that we were using in the practice. I could find nothing that fit the bill. Then I hit on CRM (Customer Relationship Manager). CRM is designed to help you manage your relationship with each of your customers. It keeps track of customer details, leads, sales, tasks, service dates and also sends automatic emails to keep the customer informed of upcoming events, such as scheduled services. Could I, perhaps, bend one of these packages into what I needed? What…

So, you are the sole shareholder and director of a company. The company’s creditors issue summons against the company with you as a co-respondent. What is your position? Quite simply, as the shareholder you cannot be held liable for the debts of the company. That’s what the word Limited means in (Pty) Ltd. Your risk is limited to the possibility of losing your investment in the company, the share capital. There’s a proviso. If you received a dividend when the company’s liabilities exceeded its assets (in other words, the retained income was negative on the balance sheet), then that dividend…