Archive for category Risks

Sars’ revenue collection increases by 6.3% y/y, but misses Treasury target – This Could Only Mean One Thing for Tax Payers

April 4, 2018 0 Comments, on Articles, Business news, Notice Board, Risks, Tax news, by
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Source: http://www.engineeringnews.co.za/article/sars-revenue-collection-increases-by-63-yy-but-misses-treasury-target-2018-04-03

The South African Revenue Service (Sars) collected R1.216-trillion for the 2017/18 financial year, representing growth of R72.4-billion, or 6.3%, year-on-year.

This was, however, lower than the R1.217-trillion target set by the National Treasury during the 2018 Budget speech.

The main sources of revenue that contributed were personal income tax, value-added tax (VAT) and company income tax.

Finance Minister Nhlanhla Nene on Tuesday said the 2017/18 financial year had been characterised by distinct and clearly delineated growth patterns.

Until December 2017, revenue in aggregate grew by 6.2% year-on-year.

For the period from December 2017 to February 2018, revenue growth accelerated to between 9.5% and 15.5%, strengthening aggregated year-on-year growth to about 7.3%.

Nene attributed this to an improvement in business confidence to levels last seen in 2015, resulting in an improved profit outlook and provisional payments.

From the above article it is clear that SARS is struggling and in my opinion will push, going forward, more stringent compliance audits to try to mitigate shortfalls in collections.

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POTENTIAL RISKS WHEN BUYING A BUSINESS – BUSINESS DEVELOPMENT

September 25, 2011 0 Comments, on Articles, Risks, by
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POTENTIAL RISKS WHEN BUYING A BUSINESS – BUSINESS DEVELOPMENT
Having identified some of the potential benefits, let’s take a closer look at some of the risks associated with buying a business.

LOCATION: The business could be located in the wrong premises, and new premises might be required to ensure ongoing success.
LEASE: The rental may not be market related and escalation per annum too high. The lease could also contain very negative terms & conditions.
PROBLEMS AND LEGACY ISSUES: You may be taking over major problems that the previous owner has created and/or has not told you about. E.g. a key customer leaving!
 
When looking for potential business there are a number of ways you can source prospects. You could:
  • Look in newspapers under the businesses for sale column,
  • Place an advertisement in the newspaper,
  • Search on the internet,
  • Contact a business broker,
  • Contact other agents,
  • Speak to family and friends (for their contacts) or
  • Directly canvass businesses that appeal to you.
 Don’t buy what the broker wants to sell you just for the sake of buying a business. Look for and get the business you want and deserve. It probably won’t be 100% of what you want, but then why would you buy a business that you do not feel you can grow and develop?

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ENTERPRISE RISK MANAGEMENT

September 25, 2011 86 Comments, on Articles, Risks, by
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ENTERPRISE RISK MANAGEMENT
“Floods, Security, Breaches, Loss of Major Suppliers/ Customers and Power Cuts are all events capable of crippling a business and yet many companies are far from being prepared”.

Running a business can be risky – so what can businesses do prepare for the worst? “It all starts with getting a fundamental understanding of what risks a company faces.”
 
During the risk identification process, the hazards that a company faces frequently turn out to be different from the ones management expects. Companies often overlook what’s on their doorsteps. Over looking issues such as:
1) Crisis management;
2) Crisis communication.
3) Supplier going to bankrupt
4) Crime related losses
5) Employee embezzlement and pilferage
6) Malicious damage
7) Flooding and; other,
8.) Natural occurrences
 
Risk management is more than just identifying risk, but taking this further to managing and mitigating these risks. Companies ought to take necessary steps to protect themselves.
 
5 Key Tips to avert a crisis
 
1) Consider insurance cover; e.g. trade credit insurance, business content insurance;
2) Have an effective crisis communication plan;
3) Ensure that risks are not only identified but also managed and mitigated;
4) Tailor crisis response to minimize the impact on people, the environment, assets and reputation, and;
5) Conduct bi-annual crisis management training sessions.
– Mwendabai –
(011 – 312 3149/ mkalaluka@iabcgroup.co.za)

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Importance of Sound and Effective Business and Financial Controls – Enterprise Risk Management

September 25, 2011 9 Comments, on Articles, Risks, by
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In these times of the so called economic meltdown, certain realities hit the businesses:

· Companies experience low/ reduced Sales
· Companies experience low/ reduced growth
· Companies experience deteriorating cash flows
 
With all the above hitting you, you don’t want an increase in Fraud added onto it. Hence like never before ensuring sound financial and business controls is key and fundamental.
 
Further, retrenchments have also become a buzzword in the work place. This too if not managed handled effectively an equitably, can also increase the risk of fraud. According to research, white collar crime is real and on the increase.
 
The National Bargaining Council (“NBC”) stated, in 2005, that chances of a company doing business in SA being defrauded, was 2 X that of their counterparts in the rest of the world and that approx 83% of companies reported white collar crime of some form or another.
 
According to the most recent official crime statistics (June 2008), the number of reported cases of commercial crimes rose by an alarming 21%. It’s not just the case of discovered fraud as a direct consequence of downturn. However with effected and looming retrenchments of spouses’ etc, employees are bound to be tempted to extend their fingers where they shouldn’t really be reaching.
 
The fault can’t be squarely placed on the employees; it’s an issue of controls within the company. Employees spot weaknesses in internal controls of the organisations where they work, over time and often get tempted to exploit them before reporting them to management. Sadly, it’s often the trusted employees who go ahead and commit fraud.
 
The onus is on management to prevent this from happening:
· Companies should think about more than just payroll and costs when embarking on retrenchments;
· It’s about safe keeping of assets and ensuring these are not abused. fraud does not just mean employees stealing money;
· Management always have to look at what structures have been put in place to prevent fraud.
 
For small companies that may not afford forensic audits:
1. Make sure there is sufficient segregation of duties;
2. Watch out for any signs of irregularities;
3. Keep your ear to the ground, often other employees know about the fraud scams.
 
IABC does offer affordable internal audits. – Mwendabai – 011 – 312 3149

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