Accounting and Financial Skills Workshop for Entrepreneurs
UKZN hosted its first Accounting and Financial Skills Workshop for Entrepreneurs on the Westville campus last week.
Speaking at the event, Acting Executive Director: Human Resources, Mr Kishore Gobardan, said empowering people using entrepreneurship and innovation was a key focus of the University’s new Strategic Plan. ‘We’d like to shift the idea from being job seekers to job creators to move the country forward,’ said Gobardan.
Chartered Accountant and UKZN lecturer Dr Rajendra Rajaram examined budgeting for entrepreneurs. Rajaram, who is involved in business rescue and turnaround, underscored the importance of acting on a budget and not just preparing one. ‘Make useful economic decisions based on the preparation of a budget,’ he said.
He suggested that budgets be reviewed periodically – ‘it’s not something that’s meant to be cast in stone and filed away,’ said Rajaram, citing an example of a textile importer who reviews his company’s budget frequently due to the volatility of the rand/dollar exchange rate.
He reminded entrepreneurs that the main reason for getting into business was to generate a profit. ‘If your business is not profitable, your business is not sustainable and it’s going to close down,’ he said.
Ms Salma Vanker discussed record keeping for small businesses and emphasised accountability and transparency when preparing annual financial statements.
Vanker said literature shows that ‘80 % of small business failure is as a result of poor record keeping.’
She said when preparing tax returns, entrepreneurs should keep records of assets, liabilities and income and expenditure, with supporting documentation, for five years.
She recommended practical solutions to maintain records on free online cloud storage and listed Google Drive, Dropbox, Samsung S-Drive and Apple’s iStorage to keep documents in a safe space.
Vanker suggested using Tiny Scanner, a free app that allows the user to take a picture of a document and translate it into a PDF, which can then be stored online. She also suggested suppliers email invoices as they can be downloaded and easily stored.
She proposed using First National Bank’s free banking solutions or Microsoft Excel to keep good records.
Auditor and lecturer, Ms Hlengiwe Ndlela, spoke on internal controls and business ethics. ‘Internal controls are the foundation for your business - if they are strong, you can trust your employees to do what they are supposed to, because it’s defined.’
Ndlela recommended doing cash counts at the end of each day as a control activity to help prevent theft in a business. She advised monitoring to ensure internal controls were properly implemented.
She cited the King IV Report on Corporate Governance and encouraged ethical culture, good performance and legitimacy. She advocated developing a code of ethics to ensure that businesses run ethically. Business ethics are ‘something that you choose to do – it’s not a mistake’.
Mr Siva Govender, a tax specialist and lecturer at UKZN, examined tax planning in small to medium enterprises.
Govender delved into the different types of business entities and their tax impact, including Small Business Corporations (SBC) and Sole Proprietors. He emphasised that when a business closed down or when the entrepreneur died, tax obligations still applied.
He cautioned against tax evasion, which could result in imprisonment and/or fines. ‘I love deductions, we all love deductions, but they must be legal,’ he said.
Certified financial planner and UKZN alumnus, Dr Prince Sarpong, took an in-depth look at retirement planning. He encouraged planning early for retirement and diversifying investments. ‘No risks, no rewards,’ he said, but ‘don’t put all your eggs in one basket’. He warned that if it seemed too good to be true, it probably was!
He advised saving immediately, automating savings, using the right retirement vehicle and protecting assets. ‘You are your first major asset,’ he said.
UKZN’s Professor Mabutho Sibanda cautioned against borrowing short term to invest long-term. Dean and Head of the School of Accounting, Economics and Finance, Sibanda emphasised the importance of a “savings culture” instead of borrowing and consuming. ‘We are somehow mortgaging ourselves – we are becoming slaves,’ he said.
Human Resources’s Ms Busi Ramabodu echoed the sentiments of all those who found the workshop informative and useful. ‘I’m certain that after today, your business will be better,’ she said. She thanked everyone who made the workshop a success and promised UKZN would host similar events in the future.
The workshop was hosted by Human Resources and the School of Accounting, Economics and Finance, with support from Corporate Relations.
Words: Raylene Captain-Hasthibeer
Photographs: Albert Hirasen