“Paying yourself isn’t selfish, it’s sustainable. The goal is to strike a balance that supports your personal life without compromising the growth of your company.”  (Salim Omar, CPA and serial entrepreneur) Many founders see skipping their own salary as a noble way to fund growth. In reality, underpaying yourself often backfires. Research shows that 82% of small business failures stem from cash flow problems and unpaid founders can mask true costs, distort margins, and create hidden financial pressure – and that’s just the start of it. What’s the real cost of your time? When founders refuse to take a salary, they are effectively treating their own time as free. In the scramble to conserve cash, they tell themselves they can wait to be paid until profits improve. But unpaid labour is not free. By not recognising this cost, you skew the economics of your business. Imagine you hire a manager to take over your duties. Their salary would immediately appear as a line item. By not paying yourself, you are masking a true expense. This can mislead investors, lenders, and even yourself about whether the business model is sustainable and prevent changes that need to be made. Pricing, margins, and growth targets all look healthier than they are, setting you up for shocks later.  This is why savvy investors prefer to see founders compensated fairly. An unpaid or underpaid founder may seem admirable in the short term, but it raises questions about whether they and the company can endure the demands of growth. Burnout is real Founders who delay setting a salary usually do so because they are waiting for a day when they feel the business has “earned it.” The problem is that this line keeps moving. There’s always another milestone, another round of investment, or another expense that feels more urgent. Meanwhile the founder is likely eroding personal savings, undermining their career advancement elsewhere and causing stress and sleepless nights in their own home. A survey by Kruze Consulting of over 200 venture-backed start-ups found that business owners who underpaid themselves for too long often burned out and quit before their companies reached key milestones. By paying yourself out, and minimising the financial risks at home, you can avoid the same fate. Tax benefits Not paying yourself a salary isn’t doing the company as many favours as you expect. All expenses put through the company (including salaries) reduce your company’s tax burden, meaning that the benefit you’re providing the company by not taking a salary is significantly smaller than you think.  As a general rule, it’s advised that you take 50% or less of the business’ net profits as compensation and save the rest for reinvestment, but each company is different. As your accountants, we can help you to structure the salary you pay yourself to ensure that the greatest benefit is achieved for all concerned – thereby lessening any guilt you may feel for taking a salary before the business is “ready”.  The effect on morale One…

“Taking bold action on climate change simply makes good business sense. It's also the right thing to do for people and the planet.” (Richard Branson) Climate change impacts the fundamentals of business operations. Rising heat affects productivity, floods and storms damage infrastructure, droughts disrupt supply chains, and new regulations increase compliance costs. Many leaders still believe their sector will be spared, but no industry is truly insulated. Just as one-third of startups fail because they never properly defined their target market, businesses that fail to assess climate risks may find their models undermined by forces beyond their control. The message is clear: failing to future-proof your business, will result in extremely hard times ahead. Start with the risks you’re facing The first step is to identify which climate risks could most directly affect your operations.  These can be physical (think floods, wildfires, and extreme temperatures), or transitional, such as regulatory changes and shifts in customer expectations.  According to the latest prediction models, South Africans can expect a hotter, more erratic climate with the country warming at about twice the global average. This means more very hot days that will hurt worker productivity and equipment reliability. On top of this, the country is also experiencing heavier downpours with increased flood damage. These damaging floods, such as those seen KwaZulu-Natal in April 2022 and the Western Cape in September 2023, will result in enormous insurance and economic losses and prolonged business disruption. Despite the flooding, the country is also not in the clear when it comes to water stress. The 2015–2018 Cape Town “Day Zero” drought was devastating for car wash businesses but a boon for borehole drillers. Day Zero may have been avoided, but there will be more droughts in the future. All of these issues can lead to stock and agriculture failures, infrastructure collapse and process interruptions. A lack of water, for example, creates cleaning and hygiene issues as well as lower staff productivity. Insurers in SA have been reporting increasing weather losses and rising catastrophe claims, which will continue to feed through to higher premiums and excesses and tougher underwriting in high-risk zones. You can only build a realistic plan once you understand exactly where your exposures lie. Build a climate profile for your business Once you understand the risk categories, create a profile detailing how they intersect with your company. You need to consider your location, your sector, your suppliers and your employees. A warehouse on a floodplain carries different risks from a retail store in a heat-stressed city. Manufacturing firms may depend on inputs that are vulnerable to drought or fire, and employees may struggle in adverse weather conditions. Many exposures sit within the supply chain, where a small disruption upstream can ripple through global markets. For example, higher than usual temperatures may result in crops failing, or greater costs for HVAC and cold logistics services. Have you factored in these costs being passed on to your business?  This profile should be updated regularly, as conditions, regulations,…

“Accounting is the language of business.” (Warren Buffett) Increasingly, banks and other organisations are requiring businesses to submit up-to-date management accounts when applying for finance. This is because these compact financial reports enable business analysis even when the latest annual financial statements are not yet available. Management accounts also offer owners and managers timely, accurate and actionable financial insights that facilitate performance evaluation, smart management decisions and informed planning – all of which can transform how your business operates and grows.  What are management accounts? Management accounts are a set of summarised financial reports. They’re similar to annual financial statements but they aren’t as formal, and they’re produced much more frequently – usually monthly or quarterly.  They’re all about providing relevant financial data for informed business decision-making. As such, there’s no fixed format. Instead, management accounts should summarise and combine the financial reports you need to make smarter decisions. These financial reports might include some or all of the following. What can be included in management accounts? Income Statement (Profit & Loss) Detailed breakdown of income and expenses Measures performance over a specific period Balance Sheet Provides a snapshot of the financial position (assets, liabilities, and equity) at a specific point in time Cash Flow Statement Tracks actual cash movements Monitors what funds are available, incoming, and required for outflows Key Performance Indicators (KPIs) Quick performance assessments Trend Analysis Comparisons with previous periods and industry standards Variance Analysis Compares actual figures against budgets Other Debtors and creditors reports Payroll reports VAT and PAYE reconciliations Departmental reports for individual business unit performance   What can management accounts tell you? Performance Comparisons with previous years and industry standards Results analysed against KPIs Are strategies working? Early signs of negative trends Areas for improvement Cash Flow Early warnings of cash flow pressures Avoid cash flow problems Profitability Where is profitability strongest? Where to boost margins or reduce costs New business opportunities Operational Insights Top-performing products and customers Guide decisions about pricing, resources, and reward strategies Control Monitor overheads and stock levels Early detection of irregularities / fraud Risk management and governance Accurate, current records reduce audit fees and enable smarter tax planning Planning & Decision-Making Up-to-date financial reports that support smart strategic decisions The right set of management accounts can do more than record numbers – it can provide meaningful insights that help your business to perform better, plan ahead, and stay in control. We can tailor your management accounts  We tailor management accounts to your company’s exact reporting requirements, turning your financial data into actionable insights that can not only improve operational efficiency but also create a solid foundation for sustainable growth in your company. Think your business could benefit from a management accounts overhaul? Drop us a line! Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and…