We have drafted 5 questions to ask your accountant so you know what is required from you and what you can expect from them.
1) How much do you charge and how do these suit my needs and pocket?
Fees are worked out according to your specific needs. There is no “one package for all clients”. We do not charge you for work not performed. We can charge either on a retainer (monthly) basis or on an ad hoc basis. The retainer included multiple services and will remain the same throughout the length of you being a client. This will ensure no surprise bills. The ad hoc basis is ‘as and when’ you need us. A tax return or some support etc.
2) I have some processes in place already. How do we fit that into your services?
We seldom replace processes/procedures. Don’t fix something that is not broken. We will fit into your processes wherever possible. We may alter them slightly but purely because it will make your business run smoother. You know your business better than we do and we do not run your business. A few tweaks here and there may be necessary, but no huge overhaul will occur.
3) When are VAT returns and payments due, and what expected from us to submit accurately and on time?
VAT returns are for a 2-month period and are payable in the month following this period. Example: January and February VAT return is paid in March. All that is required is the accurate processing of your accounts. The accounting system will work the VAT reports out for you and we can submit using these. We will run through it and ensure it is correct and, if necessary, consult you and adjust it accordingly.
Tax is possibly the most important topics in the 5 questions to ask your accountant. It is not always a nice topic but it is essential that you get it clear in your mind.
4) How is provisional tax calculated and when is it due?
Provisional tax is calculated twice a year. The 1st return is for the period March to August. The 2nd is for the full financial year till February. The amount is payable in those months ie: twice a year. Provisional tax is calculated on the profit for the period (if any). The 1st return is calculated by forecasting the current profit and doubled for the full year. The amount is then halved, and tax is payable on that amount. This amount must be accurate within 10% of what happens. The 2nd return is based on the whole period and must be within 5% of the actual figures.
Some estimation must be done, hence the accuracy percentage allowable. IF there no profit, no tax is payable
5) When and how much tax do I have to pay?
Income tax is levied on nett profit. It is levied at 27% on this figure. The provisional tax you have already paid in the year is taken off the amount of tax you are due to pay. It is payable when you submit your company tax return. Example: you made a profit of R100 000. You submitted both provisional tax return and they totalled R95 000. You will have to pay in the difference.
These are just 5 questions to ask your accountant. There will be more and we encourage you to ask as many as you need to be so that you are 100% with what is going on in your business accounts.
* The answers are from BC Accounting Services’ policies and procedures and may differ between accounting firms.