Scrapping of VAT increase, widely welcomed
The National Treasury’s announcement on the scrapping of the proposed increase in Value-Added Tax (VAT) has been widely welcomed.
- Industry News
- 24 April 2025
OPINION PIECE: I am sure that you are familiar with the old saying – “the job is not finished before the paperwork is done”. This can apply to many situations, some more humorous than others.
It is certainly very applicable to the accuracy of the financial statements for your business. “Profit and Loss” (P&L) cannot be accurately stated unless the balance sheet reconciliations have been performed AND the reconciling items analysed to ensure that they will not potentially have an effect on the P&L in the future.
Unfortunately, laborious tasks like this take time if done properly but the benefits are that you should no longer be on the receiving end of as many horrible surprises. In many instances, the financial staff perform the reconciliation and if it balances, it is a job well done. Boxes are ticked and everyone is happy.
I have seen so many instances of balanced recons not being reviewed by general management. The reconciling items are really where the rubber hits the road and, in most instances, the more reconciling items there are, the more it shows that processes are not working as they should. Reconciling items are often the result of a poor process somewhere.
Obviously, there are many instances where reconciling items are necessary, and these are mainly as a result of timing differences (bank recons, debtors and creditors recons etc). Additionally, older items are usually far riskier and should be given the necessary attention.
Long recons take time, and if reconciling items are kept to a minimum, they will take less time, which means that your financial staff can be more productive and spend time being proactive instead of reactive. Clean and accurate recons are one of the signs of a well-run and efficient business.
Be sure to make “recon reviews” a permanent item on your “to do” list.
The National Treasury’s announcement on the scrapping of the proposed increase in Value-Added Tax (VAT) has been widely welcomed.
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