Money and Finance http://fqureshi.com Fri, 29 Mar 2024 14:54:27 +0300 Joomla! - Open Source Content Management en-gb What do you do when the taxman knocks on your door? http://fqureshi.com/index.php/16-what-do-you-do-when-the-taxman-knocks-on-your-door.html http://fqureshi.com/index.php/16-what-do-you-do-when-the-taxman-knocks-on-your-door.html What do you do when the taxman knocks on your door?

Often, it’s too late to do anything…

When it comes to keeping your tax records with the Kenya Revenue Authority (KRA) up to date, being proactive rather than reactive is normally the difference between smooth business operations and receiving that dreaded knock on your door or tax demand notice that could be responsible for several sleepless nights.

Though you probably pay your taxes and file your returns on time, the reality is that your company’s records at KRA are never correctly or automatically updated. KRA records may reflect tax liabilities because tax payments that you have made haven’t been captured. The system will also be quick to add penalties and interest which further compounds the figure significantly.

Filing your returns is simply not enough! Your finance team needs to regularly visit KRA offices, obtain statements and reconcile them with a view to addressing discrepancies. You need to do this when time is on your side.

A real world example of the downside to not keeping your tax records updated is when you apply for a tax compliance certificate that subsequently gets declined because the system indicates that you have tax liabilities.

If you urgently need the compliance certificate, say for an important public bid that you are participating in, you will only have two options:

  1. Pay the incorrect tax due and obtain the tax compliance certificate immediately so that your company can participate in this important bid.
  2. Get your finance team and/or tax consultant to reconcile your records with the taxman and clear out the incorrect dues. This process will probably take a few weeks to complete and you might not obtain a compliance certificate in time to be involved in the bid.

Both are unattractive options because they require you to either sacrifice crucial and probably unavailable cash flow or lose the opportunity to participate in what could be a vital project for your company.

As an entrepreneur, you need to focus on achieving your goals, not fighting tax related fires.  

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webmaster@fqureshi.com (Farhan Qureshi) Money and Finance Thu, 06 Aug 2015 00:00:00 +0300
The Real Bottom Line - Profit http://fqureshi.com/index.php/19-the-real-bottom-line-profit.html http://fqureshi.com/index.php/19-the-real-bottom-line-profit.html

Most salespeople do not see beyond the invoice they have produced! When coaching sales teams we often hear:

“I just closed $20,000 worth of sales this month but my salary still remains unchanged.”

In sales, we work to produce profits, not revenues. Production and ­delivery costs are always rising while clients expect a price reduction, all the time. Any business owner will be able to tell you that huge revenues are often accompanied with huge costs (and losses).

It does not really matter how many people work in your firm, or how much the sales department sold last year. The question you have to ask yourself is: “What is our profit, after taxation?”

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webmaster@fqureshi.com (Farhan Qureshi) Money and Finance Fri, 15 May 2015 03:00:00 +0300
Cash Flow is King http://fqureshi.com/index.php/18-cash-flow-is-king.html http://fqureshi.com/index.php/18-cash-flow-is-king.html

Companies go bankrupt because of a lack of cash to meet ­critical ­obligations, not because of a lack of profits. You can run the most ­profitable firm in the market and still go out of business because you ­cannot pay salaries or rent! You have invoiced enough revenues to probably buy a brand new house, but your client will only pay you a few months from today.

This revenue is meaningless if your bank account is empty and you cannot pay your bills.

Why do very profitable companies still encounter enormous cash-flow challenges? These are some of the downfalls of a poorly managed sales team that is operating in a wrong sales mindset:

  1. INVOICES vs PAID INVOICES. Salespeople are paid on total revenues generated, not on revenues that have been paid in full from the client.
  2. IT’S NOT MY JOB. Salespeople are not responsible for collecting the money. There is someone else inside the firm who is tasked with the job of “begging” for payments.
  3. BIGGER IS BETTER THAN FASTER. Salespeople prefer to close ­bigger deals (regardless of the payment plan) since they are not going to be paid any extra commissions for fast payments!
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webmaster@fqureshi.com (Farhan Qureshi) Money and Finance Wed, 15 Apr 2015 03:00:00 +0300
Cannibalising Your Own Customer Base http://fqureshi.com/index.php/17-cannibalising-your-own-customer-base.html http://fqureshi.com/index.php/17-cannibalising-your-own-customer-base.html

In traditional environments where commission schemes are based on ­revenues, salespeople have only goal: “Selling at all costs”. When salespeople are “desperate”, they find a number of unprofessional ways to close the sale.

  1. CREDIT FACILITIES: Credit terms that are convenient to the client and detrimental to the firm being represented by the sales ­professional: “Don’t worry about the payment; we will not take you to court for ­being a little bit late.”
  2. DISCOUNTS: Discounts that disrupt the pricing strategy of the firm that is being represented by the sales professional. Such discounts ­negatively condition the perceived quality of the product and ­negatively impact on the pricing strategy of other salespeople in the organisation: “I know one of your colleagues is selling the same ­product cheaper elsewhere!”
  3. EXTRA SERVICES: Providing extra unpaid for services that cannot be repeated and thus set a precedent that makes the next sale more ­difficult to achieve: “Last time you gave me free shipping on a smaller order, why are you charging me for same-day delivery this time? This is unacceptable.”
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webmaster@fqureshi.com (Farhan Qureshi) Money and Finance Sun, 15 Mar 2015 03:00:00 +0300
One day you might sell your business http://fqureshi.com/index.php/money-and-finance/one-day-you-might-sell-your-business.html http://fqureshi.com/index.php/money-and-finance/one-day-you-might-sell-your-business.html One day you might sell your business

One day you might sell your business! Question is; can your business survive without you? If your answer is NO, then you have nothing to sell.

Our clients often approach us to look for investors to buy their businesses. After assessment, we realise they lack the systems and structures that would allow them to sell. Investors want to buy businesses that can run on their own and generate returns without them having to hold a microscope over them.

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webmaster@fqureshi.com (Farhan Qureshi) Money and Finance Sun, 15 Feb 2015 03:00:00 +0300