Turnover (Revenue)

The total amount your business earns from sales or services before any costs are deducted.

📌 Tip: SARS uses turnover to determine VAT registration thresholds.

Creditors (Accounts Payable)

Money your business owes to suppliers that you haven’t paid yet.

📌 Tip: Regularly review to ensure you’re not building up risky debt.

Cash Flow

The movement of money in and out of your business — not the same as profit.

📌 Tip: Many profitable businesses fail due to poor cash flow management.

Reconciliation

The process of matching your financial records to bank statements or supplier invoices to ensure everything is accurate.

📌 Tip: Reconciliations catch errors early and protect you from SARS queries.

VAT (Value-Added Tax)

A 15% tax you collect on sales and claim back on certain business expenses.

📌 Tip: VAT errors are one of the fastest ways to attract SARS penalties.

Provisional Tax

An advance payment of tax based on estimated income for companies and some individuals.

📌 Tip: Pay twice a year to avoid penalties at year-end.

Debtors (Accounts Receivable)

Money customers owe you that hasn’t been paid yet.

📌 Tip: High debtor balances can choke your cash flow if clients pay late.

EMP201 & EMP501

EMP201: Monthly PAYE, UIF, and SDL submission.
EMP501: Bi-annual reconciliation of all employee taxes.

📌 Tip: SARS expects these on time — every time.

Tax Clearance Certificate

Tax Clearance Certificate

Audit Trail

The paper or digital trail that shows where every transaction came from — important during SARS audits.

📌 Tip: Cloud accounting systems like Xero make audit trails easier to maintain.

Financial Year-End

The 12-month period your company uses for financial reporting and tax purposes.

📌 Tip: Keep your year-end consistent for easier tax submissions and audits.

SARS Verification

When SARS requests supporting documents to check the accuracy of your returns.

📌 Tip: Verifications aren’t always audits, but they can escalate if handled poorly.

Net Profit

What’s left after all expenses (salaries, rent, tax, etc.) are deducted from your revenue. Also called “the bottom line.”

📌 Tip: This is your real profit, not just sales figures.

Cost of Sales

The direct costs involved in delivering your product or service (raw materials, labour, etc.).

📌 Tip: High cost of sales can eat into your profit quickly if not controlled.

Balance Sheet

A snapshot of what your business owns (assets), what it owes (liabilities), and what’s left (equity) at a specific point in time.

📌 Tip: This shows your business’s financial strength.

Gross Profit

Your revenue minus the direct costs of producing your goods or services (Cost of Sales).

📌 Tip: This shows how efficiently you’re producing what you sell.