Tag: financial management

Four in five small businesses want to become more knowledgeable about financial management, but two thirds lack the support they need. New research reveals that South African small businesses are making mistakes costing them an average of R91,311 per year due to a lack of financial knowledge.

The Global Entrepreneurship Monitor (GEM) found that South Africa has one of the highest business start-up failure rates in the world. In the GEM National Entrepreneurship Context Index (the NECI Index), South Africa ranks 49th out of 54 countries, ahead of only Croatia, Guatemala, Paraguay, Puerto Rico, and Iran. Often, people think that the number one thing an entrepreneur needs is a winning idea.

Payroll solutions in South Africa must be modernised to benefit from the likes of cloud computing, robotic process automation (RPA), and artificial intelligence. If companies are to effectively contend with evolving payroll legislation in the country, they need to embrace these technologies and transform into digitally driven organisations.

It’s been over a year since the pandemic-induced stock market meltdown and since South Africa entered hard lockdown. It is time to look back and examine what this period has taught us as an industry.

Digital technologies have not only altered the way in which financial services and operations are delivered, but also caused a culture shift in Finance. The role of finance executives and professionals has changed from bean counter, to information broker and more, causing people to relate in new ways according to their expanded roles.

The captain of Ship SA, President Cyril Ramaphosa, can surely see the iceberg that we are heading for and one can almost hear the call go out for us to 'brace for impact'. The iceberg is an economy that is in crisis – an unemployment rate of 42% (using the expanded definition), GDP growth projections down by 7.8%, tax revenue projections at R304 billion less than originally budgeted for, a budget deficit of R709 billion for 2020/21, a current debt to GPD level of 81.8% and debt service costs (interest) currently amounting to 21c in every tax Rand collected.

Managing and growing a business is no easy feat, this task becomes even more difficult when you factor in recessions, economic downgrades and pandemics. But the hurdles entrepreneurs and their businesses are currently facing can also be an opportunity to pivot their companies and brands.

The COVID-19 crisis is having a profound impact on South Africa’s economy with the GDP forecast to contract by as much as 7.1% in 2020, to an all-time low of roughly -8.5%. A wide range of industries came to an abrupt halt during the national lockdown, with businesses across the board struggling to stay afloat – mass job cuts, and for many others, pay cuts, loom.

We have noted with concern the Auditor General’s report of the audit outcomes for local government, which showed that only 8% of municipalities received clean audits for the 2018/19 financial year, despite R1.26 billion being spent on financial reporting consultants.

While the power of face-to-face, physical sessions remains indisputable, COVID-19 has called for a ‘new normal’ where Zoom meetings and WhatsApp calls are the order of the day. All sectors of society have been impacted, including intermediaries who have had to quickly digitally mobilise to be there for their clients in a time when they’re needed most.