Results 1 to 7 of 7

Thread: Where to start?

  1. #1
    Junior Member
    Join Date
    Sep 2018
    Location
    Centurion
    Posts
    17
    Thanks
    2
    Thanked 1 Time in 1 Post

    Unhappy Where to start?

    Hey everyone.. first time poster

    I've just agreed to help a friend's mother's business with her books and have now come to the realisation that nothing has ever been done for bookkeeping. She started the business about 30 years ago and just never bothered keeping any sort of record... of anything.. After getting over the initial shock, I've asked her about SARS and how she has been paying tax and I just can't get a clear answer out of her.

    I've discussed the ramifications of this with my friend, seeing that the plan is for her to take over the business from her mom. She is fully onboard that everything needs to be done correctly and we need to make sure that all the proper registrations (Income tax?, annual returns for CIPC?, the list goes on) are in place and in order.

    But all this is fairly basic stuff and even though it's a mountain of work to work through, not that hard or complicated. This all brings me to my real question:

    Concerning the bookkeeping:
    1. Which year do I start with getting everything on an accounting system? I prefer Pastel, so I'll be using that.
    2. What do I do with opening balances?
    3. Is it easier to start capturing on a month by month basis (starting on whatever question 1 was answered)?
    4. How far back do I attempt to go regarding the bookkeeping?

    I'd appreciate any guidance.

    Thank you

  2. Thanks given for this post:

    Olivia Noah (20-Sep-18)

  3. #2
    New Member
    Join Date
    Sep 2018
    Location
    united state
    Posts
    3
    Thanks
    2
    Thanked 0 Times in 0 Posts
    Accounts are straightforward to balance off if they consist of only one type of entry such as debit entries or credit entries. In this case, all the account entries are simply added up to get the balance on the account. For example, a bank account has three debit entries of £50 each, then the balance on the account is a debit balance of £150.

  4. #3
    Junior Member
    Join Date
    Sep 2018
    Location
    Centurion
    Posts
    17
    Thanks
    2
    Thanked 1 Time in 1 Post
    Quote Originally Posted by Olivia Noah View Post
    Accounts are straightforward to balance off if they consist of only one type of entry such as debit entries or credit entries. In this case, all the account entries are simply added up to get the balance on the account. For example, a bank account has three debit entries of £50 each, then the balance on the account is a debit balance of £150.
    Maybe the heat is affecting me, but I'm not sure how this answers any of my 4 questions?

  5. #4
    Gold Member
    Join Date
    Feb 2016
    Location
    Johannesburg
    Posts
    713
    Thanks
    74
    Thanked 199 Times in 178 Posts
    Is the business incorporated?

    If not then your friend can simply start afresh. A sole proprietor is an extension of the natural person.

    If it was incorporated and annual returns were never done (I am making that assumption because the stated turnover is supposed to be as per "the latest financial statements") then it would have been deregistered by now. If that is the case register a new company and start afresh.
    Last edited by Andromeda; 20-Sep-18 at 07:38 PM.

  6. Thanks given for this post:

    acheronia (21-Sep-18)

  7. #5
    Junior Member
    Join Date
    Sep 2018
    Location
    Centurion
    Posts
    17
    Thanks
    2
    Thanked 1 Time in 1 Post
    Thank you, Andromeda. I think we were so caught up in the details, we didn't see the obvious.

    I'll have a chat with her and bounce it off her.

  8. #6
    New Member
    Join Date
    Sep 2018
    Location
    KwaZulu-Natal
    Posts
    3
    Thanks
    0
    Thanked 1 Time in 1 Post
    Quote Originally Posted by acheronia View Post
    Thank you, Andromeda. I think we were so caught up in the details, we didn't see the obvious.

    I'll have a chat with her and bounce it off her.
    The best way to deal with this situation is to pick a start date, usually 1 March of the current year, which is the start of the tax year. Then make a list of assets: cash at bank, inventory on hand, assets (furniture, fittings, plan & machinery, motor vehicles etc) used in the business: liabilities: overdraft, loans, leases etc. Once you have balance sheet items, then move to monthly receipts and payments, which should be easy to pick up from bank statements. There will also be petty cash payments and expense claims (incurred in private expenses to be reclaimed from the business). This is the approach used by many auditing firms where there are few records. On the recording side, consider using Wave and Zoho Books, which are free online software, but are very powerful for small business. On the tax side, SARS usually accept estimates of Profit and Loss in the interest of ensuring compliance in the absence of accounting records, but I would suggest that you seek guidance from a Tax Practitioner. Hope this helps. Contact me if you need more help.

  9. #7
    Junior Member
    Join Date
    Sep 2018
    Location
    Centurion
    Posts
    17
    Thanks
    2
    Thanked 1 Time in 1 Post
    Quote Originally Posted by jodyhollis View Post
    The best way to deal with this situation is to pick a start date, usually 1 March of the current year, which is the start of the tax year. Then make a list of assets: cash at bank, inventory on hand, assets (furniture, fittings, plan & machinery, motor vehicles etc) used in the business: liabilities: overdraft, loans, leases etc. Once you have balance sheet items, then move to monthly receipts and payments, which should be easy to pick up from bank statements. There will also be petty cash payments and expense claims (incurred in private expenses to be reclaimed from the business). This is the approach used by many auditing firms where there are few records. On the recording side, consider using Wave and Zoho Books, which are free online software, but are very powerful for small business. On the tax side, SARS usually accept estimates of Profit and Loss in the interest of ensuring compliance in the absence of accounting records, but I would suggest that you seek guidance from a Tax Practitioner. Hope this helps. Contact me if you need more help.
    Thank you very much for the clear and concise guidelines. If it turns out the business was in fact registered, then I will follow this direction.

Similar Threads

  1. [Question] How to start a career?
    By Sandeep Chougule in forum General Business Forum
    Replies: 6
    Last Post: 05-Sep-16, 10:55 PM
  2. start up
    By enos in forum General Business Forum
    Replies: 4
    Last Post: 12-Aug-15, 06:50 AM
  3. where do I start?
    By raven147 in forum General Business Forum
    Replies: 4
    Last Post: 02-Apr-09, 10:16 AM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •