General Business

This story comes in various versions. I’ll tell you the version relating to Wakkerstroom, a small, picturesque village 70km outside Volksrust.  A travelling salesman, who was passing through arrived at the hotel one day and asked for a room for that night. The charge was R450 and the hotelier asked for full payment up front, which the salesman accepted. Having secured his room for the night, the salesman took the rest of the day off to relax and enjoy the scenery and birdlife for which Wakkerstroom is renowned. The hotelier took the R450 to the baker. “Here’s the R450 that…

I promised you a post on JIT, a truly fascinating product of the Japanese mind! The over-riding objectives are zero inventory, zero queues ( a queue is merely inventory in the form of work in progress) and zero defect (right first time). They took these objectives and put them into a production environment with some very interesting results. I can only whet your appetite. If I succeed, read a book on JIT, it is truly fascinating and thought provoking. And by the way, most of the principles can be applied to all forms of endeavour, not just to factories (including for example, our own auditing…

I was planning to write a post on “What is money, after all?”, the point being that we don’t actually deal with cash any more, just numbers and yet many of us still let these numbers rule our lives. Then it occured to me that despite what I was about to write, I do carry a few thousand rands in cash most of the time. I need it for parking (maybe R20 would be enough for that) and topping up the petty cash at the office because we don’t want our driver to have to go and draw cash from…

So you’re thinking of starting your own business. Why may I ask? Freedom? Ha! Wealth? Ha! Ha! Passion? Now you’re talking! But if it is a passion for sewing or carving or designing or whatever it is that you do well, then sorry for you. You have to be passionate about being a business person, because it doesn’t matter what the underlying product is, you won’t succeed unless you run the business properly and that means you won’t be doing much of what the business does – you won’t have time. The beginning is all too easy. You don’t have…

Well? Why do we go to work? After all, we’ve got Teamviewer, so we can connect remotely to the entire office intranet and use all the specialised applications that are on our computers at the office. We’ve got Skype, so we can meet with people (staff, clients, suppliers, prospecttive employees) all face to face. We’ve got emails, instant messaging, SMS, MMS, Dropbox, Google Drive, and all sorts of other ways to share and communicate (I’ve just mentioned the ones that I use). I worked every day through the Christmas holidays using my computer at home simply as a vehicle to…

Quite a while back, we were three partners. We had 23 staff members. Then one partner left and we let him take a chunk of the business with him. Then the other left and we agreed that he would take a chunk of the business as well. Our turnover dropped by 45% over those two years. In the year ended December 2013, our turnover exceeded the figure before the drop. We had 7 full time staff members and 2 half time! Not long ago, I asked the partner of another accounting practice what was his turnover and staff compliment. Turnover…

Damn! What went wrong? Yes, what did go wrong? Why did the Excel formula produce an ERROR? Why didn’t the Mail Merge pick up the right data? Why didn’t that new staff member do what I asked them to do? You learn most when things go wrong. I’ve recognised this for as long as I can remember, but it took Bruce van Helderen, CEO of Loudfire to put it to me in an entirely different way – If a customer complains, start learning – not his exact words, but definitely his exact meaning. So I took Bruce’s words on board…

We all need to reward our staff for great work done. I can think of five ways to do this – 1) Genuine and sincere praise 2) Give them an increase 3) Give them an annual bonus 4) Pay them a commission 5) Give them a surprise Let’s take a look at these options. 1) Genuine and sincere praise. Who doesn’t like to be told they’re doing a great job? This is undoubtedly one of the greatest motivators, but it must be sincere. The “Worker of the month” approach falls outside this category, because it is (a) not sincere and…

For my sins, I’m the one who has to allocate debtor payments as we are sticklers for payment and it’s worth running this at partner level. But so often a debtor makes a lump payment against an account with lots of open items and without giving us a remittance advice. So which invoices did they pay? I love a challenge and I tried all sorts of techniques to determine the combination of invoices that fits the total paid, but I fell flat. Then I Googled “How can I find a subset of numbers that add up to a particular total”…

I once had an employee who had, next to her desk, an indoor plant that stood about 60cm high. One day, I went to her and said “Did you know your plant is dead?”. She first looked at me then at the plant and guess what? She was horrified. What could she do? Her beloved plant was indeed dead! It had actually been dead for well over 6 months. Every day for 6 months or more she had sat at her desk within touching distance of her dead plant and hadn’t seen it. Why? Because it had “always” been like…

Apart from the normal paragraphs that most contracts share (such as Definitions, Interpretation etc.) Shareholders’ Agreements usually have the following clauses – Loan accounts These clauses deal with shareholders’ loan accounts, when they will arise, their proportions, interest (normally a few points below prime), and repayment. Guarantees These clauses prohibit a shareholder from using his shares as collateral to secure a liability. They also deal with the circumstances and formalities relating to the establishment of any guarantees by or on behalf of the company. Directors These clauses determine the rights of each the shareholders to appoint directors, how the mecahnism…

Although the Act was signed into the statutes in 2008 and despite the fact that the final date for implementation was 1 April 2011 there was a further  delay. This is, no doubt, largely due to the state of chaos at CIPC. The Act was finally implemented on 1 May 2011. In order to read the new Act, one ideally needs two computer screens – one displaying the Companies Act 2008 and the other, the Companies Regulations 2011 which attempt to clarify the grey areas of the Act. First, let’s take a look at whether you need an audit or review – The regulations clarify the…