Case Study: Outsourced Business Processing for Accounting, Audit, Tax, and Compliance in a South African SME

Client Overview

A growing SME in Johannesburg specializing in wholesale distribution was struggling to manage its financial and compliance requirements. The business’s in-house resources were stretched thin, leading to inefficiencies, errors, and increased risk of non-compliance with South African regulations.

Challenges

1. Accounting Errors and Delays:

   • Inaccurate financial records caused delays in monthly reporting and cash flow forecasting.

   • Lack of proper reconciliation processes led to discrepancies in financial statements.

2. Audit Preparedness Issues:

   • The business faced difficulties preparing for its annual audit, resulting in time-consuming back-and-forth with auditors and increased audit fees.

3. Tax Compliance Risks:

   • VAT submissions were frequently delayed or incorrect, attracting penalties from SARS.

   • Limited understanding of available tax incentives, such as Section 12J and employment tax incentives, meant the company missed opportunities to reduce its tax burden.

4. Regulatory Compliance:

   • The company struggled to keep up with South African labor laws, B-BBEE requirements, and Companies Act obligations, increasing the risk of non-compliance.

Solution Provided by Enterprise Empowerment Services

Our outsourced business processing (OBP) team partnered with the client to streamline their accounting, audit, tax, and compliance functions, ensuring efficiency, accuracy, and regulatory adherence.

1. Accounting Services:

   • Took over bookkeeping and financial reporting processes, implementing cloud-based accounting software for real-time updates.

   • Conducted a thorough clean-up of historical records, ensuring accurate reconciliations and correcting errors.

   • Provided monthly management accounts, giving the business owner a clear view of financial performance.

2. Audit Preparation Support:

   • Assisted in preparing detailed and organized documentation for the annual audit, reducing auditor queries and shortening the audit timeline.

   • Ensured compliance with International Financial Reporting Standards (IFRS), making the audit process smoother and more cost-effective.

3. Tax Management:

   • Managed VAT submissions, provisional tax calculations, and corporate income tax filings to ensure accuracy and timely submissions to SARS.

   • Identified and applied for tax incentives, saving the company ZAR 450,000 in the first year.

   • Provided guidance on PAYE and SDL obligations to ensure proper payroll tax compliance.

4. Compliance Services:

   • Ensured the business met all Companies Act requirements, including annual CIPC filings and updates to the Memorandum of Incorporation.

   • Provided support for B-BBEE compliance by assisting with documentation and advising on strategies to improve the company’s scorecard.

   • Developed a framework to manage employee-related compliance, such as UIF and COIDA contributions.

Results

1. Accounting Efficiency:

   • Reduced monthly accounting errors by 90%, resulting in more accurate financial reporting and better cash flow management.

   • Gave the owner real-time access to financial data, improving decision-making.

2. Streamlined Audit Process:

   • Reduced the annual audit timeline by 30%, saving the company ZAR 150,000 in audit fees and minimizing disruption to operations.

3. Tax Savings and Compliance:

   • Secured ZAR 450,000 in tax incentives through expert guidance and accurate filings.

   • Ensured 100% on-time submissions to SARS, eliminating penalties and building a strong tax compliance record.

4. Regulatory Compliance:

   • Achieved full compliance with labor laws, B-BBEE requirements, and Companies Act obligations, reducing the risk of penalties or reputational damage.

   • Improved the company’s B-BBEE rating from Level 5 to Level 3, making the business eligible for larger contracts with corporate clients.

Client Testimonial

“Outsourcing our accounting, tax, and compliance functions to Enterprise Empowerment Services has been a game-changer. Their team’s expertise and efficiency have saved us money, improved our processes, and given us peace of mind. We now have the freedom to focus on growing our business, knowing that our back-office operations are in expert hands.”
— CEO, Johannesburg Wholesale Solutions

Key Takeaways

This case highlights the power of outsourced business processing in transforming financial and compliance management. By leveraging expert support for accounting, tax, audit preparation, and regulatory compliance, the client was able to save costs, streamline operations, and focus on growing their business.

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Contact us today to learn how our outsourced business processing services can help your business thrive in South Africa.