Business accessories in selective focus, Items for accounting, Marketing strategy, investment and saving, accounting and stock market.

Why Accounting is Crucial for any Business

Accounting is important for business owners as it helps the owners, managers, investors and other stakeholders in the business evaluate the financial performance of the business. Accounting provides vital information regarding cost and earnings, profit and loss, liabilities and assets for decision making, planning and controlling processes within a business.

The main objective of accounting is to record financial transactions in the books of accounts to identify, measure and communicate economic information. Moreover, tax reporting agencies require you to keep books at a minimum level that tracks income and expenditure.

What Is the Purpose of Accounting?

Accounting is often referred to as “Language of Business”. It is a means of communicating financial information to different users for decision making.

The main objectives of accounting are:


The primary role of accounting is to maintain a systematic, accurate and complete record of all financial transactions of a business. These records are the backbone of the accounting system. Business owners should be able to retrieve and review the transactions whenever required.


Business owners need to plan how they allocate their limited resources including labor, machinery, equipment and cash towards accomplishing the objectives of the business.

An important component of business management, budgeting and planning enable businesses to plan ahead by anticipating the needs and resources. This helps in the coordination of different segments of an organization.


Accounting assists in a range of decision-making process and help owners in developing policies to increase the efficiency of business processes. Some examples of decisions based on accounting information include the price to be charged for products and services, the resources needed to make these products and services and financing and business opportunities


Using the accounting reports, business owners can determine how well a business is performing. The financial reports are a reliable source of measuring the key performance indicators, so business owners can compare themselves against their past performance as well as against the competitors.


The financial statements generated at the end of the accounting cycle reflect the financial condition of a business at that time. It shows how much capital has been invested, how much funds the business has used, the profit and loss and the number of assets and liabilities of a business.


A common reason for business failure is the mismanagement of cash. Accounting helps in determining the liquidity of a business which refers to the cash and other liquid resources at your disposal to pay off financial commitments. The information reduces the risk of bankruptcy through detection of bottlenecks.


Accounting helps business owners prepare historic financial records as well as financial projections which can be used while applying for a loan or securing investment for the business.


By placing various checks across the organization, accounting helps in avoiding losses caused by theft, fraud, errors, damage, obsolescence and mismanagement. The internal controls safeguard the business assets and avoid long-term losses.


Law requires businesses to maintain an accurate financial record of their transactions and share the reports with the shareholders, tax authorities and regulators. The financial statements and information are also required for indirect and direct tax filing purposes.

Why Is Accounting Useful for Business Owners?

Poor financial management is one of the primary reasons for business failure especially in the first year of the business. Since businesses have a limited budget and other resources, accounting plays a crucial role in providing information that helps businesses in its growth and development.

For business owners, accounting is crucial due to the reasons below:

  • Keep a track of the cash flow. To prevent your business cash flow from running dry, you should implement policies for efficient record-keeping and a sound financial strategy.
  • To understand the concepts of fixed costs, variable costs and how to accurately cost your project, business owners can rely on cost accounting. This way you don’t end up losing money on a project you thought would be a big earner 
  • Accounting gives you a better grasp of the well-being of the business. You can do this by learning to read a balance sheet, income statement, and cash flow statement
  • Helps you detect and avoid frauds and theft by customers, employees and suppliers
  • When you understand the business finance and dealings, you are better equipped with facing audits
  • Bankers are more confident when dealing with business owners who have a handle on the business finances and actually understand financial implications

Whether you are a solopreneur or employ staff, the key to growing your business is to review your financial statements regularly and establish a detailed budget that will allow you to discover operational inefficiencies.  Saving a little bit on several expenses can add up to big results over the long run.

Why outsourcing  Accountants is Important?

Accounting necessitates huge amounts of data collection and organization of information in a way that can easily be interpreted by the management. Business owners need to keep tabs on the operating costs, changing revenues and dividends to make strategic decisions.

As a small business owner, it might be tempting to manage the business finances yourself, but financial matters can be delicate and may require a trained professional to handle them correctly. Professional accountants assist business owners in making smart fiscal decisions while adhering to the compliance requirements.

Here are some of the key reasons to invest in an accountant for your small business:

  • Analyze the financial data and determine areas for improvement. This is crucial for the long-term health of the business
  • Prepare financial statements based on the Generally Accepted Accounting Principles (GAAP)
  • You will get customized advice based on your unique business needs
  • Using a third-party accountant ensures that you’ll receive unbiased information that is verifiable and objective
  • The accountant acts as a financial advisor and helps you with budgeting and monitoring cash flow on a steady basis. This will allow you to navigate any hurdles that occur in real time
  • It helps you during tax season as accountants can identify potential deductions and help avoid audits

Along with hiring an accountant, business owners are increasingly using online accounting software. The software syncs the accounting system with the banks and helps you understand your real-time cash position. It can also be used for viewing various accounting reports, creating expense claims and sending invoices on the go.


Our take on the Zimbabwe Mid – Term Budget Review

Fiscal interventions to try and boost the economy and encourage productivity and revenue consolidation were put in place on 16 July 2020 by Finance Minister and these are:

  1. Tax Relief Measures  

PAYE Tax-Free Threshold

Tax free threshold has been raised from ZWL $2000 to ZWL $5000 per month. The highest marginal rate is 40% for above $100 000

Tax Exemption on Risk Allowance Earned by Frontline Health Personnel

COVID-19 Risk Allowances payable to this category of employees are exempted from tax for a period of twelve (12) months commencing from 1 April 2020

Incentives for the Victoria Falls Securities Exchange (VFSE) and Investors

Government’s plan to launch the Victoria Falls Securities Exchange, with a view to attract critical offshore capital to the economy

As part of the incentive package to facilitate establishment and full operationalisation of the exchange the following incentives for the Victoria Falls Securities Exchange and investors:

• Exemption from Corporate Income Tax for the VFSE;

• Exemption from Capital Gains Withholding Tax on disposal of shares listed on the VFSE

• A lower rate of 5% on dividends payable to non-resident investors on the VFSE.

Allowable Deductions on Health Related Donations

A number of corporates have demonstrated a lot of goodwill and sacrifice by donating various goods and services to strengthen the health delivery system and social support framework.

The maximum allowable deduction on donations by corporates to the local currency equivalent of US$100 000.

Tax Exemption on University Infrastructure Projects

In order to support university infrastructure development initiatives by the Infrastructure Development Bank of Zimbabwe (IDBZ), exempt from Income Tax, specified Student Accommodation Projects

with effect from 1 January 2021. The exemption will be granted subject to fulfilling prescribed conditions.

Tax Exemption on Domestic Tourists Accommodation

The hospitality industry is one of the sectors most affected by the Covid-19 pandemic, hence it is essential for Government to take a leading role in supporting revival of the sector. Domestic tourist accommodation will be exemption from VAT with effect from 1 August 2020

2. Revenue Enhancing Measures

Payment of IMTT on Foreign Currency Transactions

Current legislation exempts the transfer of money into and from Nostro foreign currency accounts from intermediated money transfer tax. Intermediated Money Transfer Tax will be extended to cover foreign currency transactions. For the avoidance of doubt, transactions conducted by organisations accredited in terms of the Privileges and Immunities Act (Chapter 3:03) remain exempt from IMTT.

Tax Free Threshold and Maximum Tax Payable per Transaction

In line with market conditions, Intermediated Money Transfer Tax (IMTT) free threshold has been reviewed from ZWL $100 to ZWL $300 with the free threshold extended to foreign currency transactions not exceeding US$5. The maximum tax payable per transaction by corporates has been reviewed from ZW$25 000 to ZW$50 000 on transactions with values exceeding ZW$2 500 000 and maximum tax of US$ 2 000 for foreign currency transactions with a value exceeding US$ 100 000.

Value Added Tax Recording of Electronic Transactions

In order to mitigate risk on fiscal revenue, as well as enhance transparency, all VAT Registered Operators to configure Fiscal Devices to capture all transactions in the currency of trade and also produce the respective invoice in the tendered currency.

Duty Exemption on Donations of Vehicles to Government by Development Partners

Exemption from customs duty, donated single and double cab trucks, in support of Approved Projects undertaken by Government Ministries and Departments.

3. Tax Administration

 Border Post Enhancement

The surge in traffic volumes has created opportunities for smuggling of goods. In order to curtail smuggling activities, ZIMRA has been empowered to introduce Anti-Smuggling Surveillance Drones at both designated and undesignated entry points.

Excise Duty on Fuel

In order to create a balance between optimal revenue collection and affordability of fuel, there is now an Automatic Excise Duty Adjustment Mechanism that reviews excise duty on a monthly basis to levels determined through a designated formula, with effect from 1 August 2020.

4. Customs Duty Exemption on Top Dressing Fertiliser

Top dressing fertilisers of 120 000 metric tonnes on accredited dealers for the 2020-21 summer cropping season will be exempted


Importance of Management Accounting Reports

A management accounting report emphasizes on inside information received through financial accounting. Managerial accounting reports are used for planning, regulating, decision making and measuring performance. Below are some of the detailed points as to why these reports are important;

1. Provides Information – the purpose of preparing a report is to provide information to various level of management and stakeholders. The term management includes supervisors, chairman, general manager, department manager and by preparing a management report these people will have an overall trend of the business, the cash flows and fund flaws.

2. Helps In selection – most relevant and crucial information is found in the management report hence management can choose which profitable option to focus on from the alternative options stated in the report.

3. Role In Control System– management reports are used as a control tool because management can see whether employees are working towards the targets and standards. The report will be prepared in such a way that actual information and budgeted information will be compared to see variances. If there are any unfavorable variances, reasons are find out what would be the cause and corrective action or measures are put in place to rectify the situation.

4. Helpful in achieving the overall Objectives– report motivates the executives and employees to take necessary steps to increase earnings of the organization significantly, in this way the management I achieving the maximum profit with the help of reporting systems.

5. Launching a new product– when a business wants to launch a product, management reports are important because it can support every stage from the initial stage to the execution stage by giving a detailed breakdown of production capabilities and an accurate picture of the market as a whole. This is crucial for working out how much you will charge for the new product. Management reports can be used to review existing reports and the unprofitable ones and deciding on the next move.

6. Utilizing Data– Managerial accounting information provides a data-driven look at how to grow a small business. Budgeting, financial statement projections and balanced scorecards are just a few examples of how managerial accounting information is used to provide information to help management guide the future of a company. By focusing on this data, managers can make decisions that aim for continuous improvement and are justifiable based on intelligent analysis of the company data, as exposed to gut feelings


Advantages of Outsourcing Bookkeeping

Bookkeeping can simply be described as the systematic way of recording business transactions in the books of accounts. Outsourcing refers to hiring another company or individual to perform tasks that were previously done by a company’s employees. Outsourcing Bookkeeping now refers to a service which provides a full accounting department experience for small business entities at a lower cost. There are advantages of outsourcing bookkeeping and these are explained below:

More time to provide value to clients

Bookkeeping takes up a lot of time from capturing transactions, processing them, filing them and if all this time could be used to bettering the company and improving services provided to customers or clients, this will not only maintain happy clients but also get referrals to more clients.

Increased efficiency and focus

When a company outsources bookkeeping it means it is using its time, resources and energy in an appropriate manner. Instead of putting so much focus on bookkeeping, there are other areas that are always at stake and need focus. A company can use this opportunity to achieve its overall goals such as company growth, high market share and strategizing on how to be the best in the industry.

Access to a highly trained bookkeeper

Having highly trained bookkeepers means having access to professionals who have the knowledge and skills in that specific area and will definitely make sure the books are as best as they could be to portray a good image for the business and for themselves. If bookkeepers offer a good service, more client referrals coming their way and it also means as a business owner you will have more time to focus on what you are good at.

Saves Money

Outsourcing bookkeeping saves money in the sense that you don’t have to employ an in-house bookkeeper full time, you pay for the services that you need and that’s it.Hence there will not be employee costs overheads, payroll taxes, and training costs, this becomes very vital when improving your profit margin. Furthermore having an in-house bookkeeper could lead to conflict of interest.

Team staff versus Individual

When you outsource your bookkeeping, you are placing your books in the hands of individuals who thrive on teamwork. Individuals who put their minds together in problem solving, individuals crosschecking each other’s work for accuracy purposes unlike an in-house bookkeeper who might take ages to detect an error to ensure you receive good quality services.

Scalability Options 

Outsourcing can help you expand or cutback because whether you are looking to grow your business or cut down expenses, having the best bookkeepers to provide  you with different plans and options will help you achieve your goals, it also provides flexibility which in-house cant,


Basic Functions of Accounting Systems

An accounting System – is a set of records and the procedures and equipment used to perform the accounting functions. Manual systems consist of journals and ledgers on paper. Computerized accounting systems consist of accounting software, computer files, computers, and related peripheral equipment such as printers.

Basic Functions

Interpret and record business transactions.

The records that are kept for the individual asset, liability, equity, revenue, expense, and dividend components are known as accounts Every time an organisation conducts a business transaction, the status of the account changes. Bookkeeping process keeps track of these changes in various ledgers and journals. The financial statements are then prepared using this information.

Classify similar transactions into useful reports.

Statement of financial position has 3 sections

Assets – the things of value that the company owns.

Liabilities – obligations to pay or provide goods or services at some later date.

Equity – the amount of net assets (assets – liabilities) owing to the owners of the business.The income statement – communicates the inflow of revenue, and the outflow of expenses over a given period of time.

The Cash Flow Statement – records inflows and outflows of cash during a period of time, and is divided into cash flow from operations, financing, and investing activities. 

Summarize and communicate information to decision makers. 

An accounting system is capable of generating summarized and comprehensive statistical reports that provide management or interested parties with a clear set of data to aid in the decision-making process.

An accounting system can also manage

Expenses – An automatic accounting system allows quick entry, categorisation and automatic balance of expenses.

Invoices – Some accounting systems allow for instant invoice creation with the ability to customize and automatically keep track of paid invoices and income.

Funding – All the business liabilities, whether accounts payable, bank loans taken to support the business, or mortgages, etc. An accounting system keeps track of these liabilities as payable values and automatically updates the balances as soon a payment is made and accounts are settled.


The difference between management reports and financial reports

Financial and management reports are the fundamental to the success and going concern of a business. For large businesses, various departments have to contribute for these reports to give a true picture of the organizational operations. 

However, for small businesses one person might be able to handle the reporting of an organization. While some may think reporting is just about calculating numbers, management reports and financial reports contain a number of differences in content and the generation process. Before hiring a specialist, it is important to understand the differences in the two types of reporting.

Financial reporting refers to the process of providing financial information to company stakeholders in order to influence business goals. The process includes three important components which are the cash flow, the profitability and the value of assets (current and non-current). The finance person tasked with preparing these reports must have an understanding of the variety of statements and the accounting standards required.

The several different types of financial management and reporting are Statement of profit or loss and comprehensive income, Statement of financial position, Accounts that are to be paid (Creditors), Accounts from where funds are coming and Statement of transactions (Debtors). Financial reporting has to be done accurately by a sharp and diligent professional.

On the contrary, management reporting is key to assess a company’s operation and performance. Management accountants send monthly management reports to the CEO.

These inform stakeholders who in turn can better make decisions about the company’s profit points, performance, and tactical steps to benefit the company as a whole. The monthly reports that are sent to the management outline the company’s overall performance in the fiscal year. It is important that management reporting is done by a critical thinker to produce the best results.

Financial reporting includes external reports that require certain standards and guidelines to be followed. They demonstrate the company’s overall performance. Moreover, they facilitate easier comparison between successive financial years.

In contrast, management reporting includes internal reports, including information regarding banks, investors and CEOs. Flexible guidelines. Management reports demonstrate the company’s reports for segments. The way they help business forecasts the company’s future cannot go unmentioned.

In conclusion, it is important to note that management and financial reports are different. However, both are concerned with making a business viable. In order for a business to remain competitive sound financial and management reports are top priority.


QuickBooks Online is the Leading Cloud Accounting Software in the world with over 5,6 Million subscribers.

Cloud Accounting is the future of Accounting “ In UK he UK, 18% of firms have over 98% of their clients in the cloud, while worldwide, almost a third (31%) have more than 80% of their clientele online “ In the UK, it’s predicted that 78% of small businesses will rely solely on cloud accounting software by 2020

Why Cloud Accounting

In recent years, cloud technology has revolutionized our day-to-day lives. We post our family photos to Facebook, we pay our household bills through online banking and we use our smartphones to check our email on the move.

So, if we are utilizing the cloud in our everyday lives, why are we not doing the same in our business lives? Cloud-based accounting software now offers all the functionality and reliability of your tried and trusted desktop accounting system, but with the advantages of cloud accounting.

Here are some of the advantages of using cloud accounting over desktop versions.

Mobile access at any time

Access your data anywhere at any time 24/7 so long you have internet access, unlike desktop application where your data and your accounts are all sat on a local drive and that limits the access you can have to your financial information.

You can also access your data on Mobile and Tablets which help can translate into a more flexible lifestyle while running your business. You can have certainty over the financials and banking even when you are not physically present in your business.

A cost and time-effective solution

Working online reduces your IT costs and saves you time by keeping you constantly connected to the business. Desktop-based systems require an investment in IT hardware, server, and maintenance of the hardware whilst online accounting is carried out entirely from the cloud.

There is no costly IT infrastructure for you to maintain, and you can access the software whether you are in the office or out at a customer meeting.

Watertight security and no time-consuming back-ups

When you are cloud-based, your accounts and records are all saved and backed up with military levels of encryption. With desktop accounting, you have to back up data each and every day and make updates every time the provider provides new updates.

On a cloud platform, back-ups and software updates become a thing of the past. You’re always logged in to the most up-to-date version of the software, with all the latest functions which save time and money with tedious backup.

Cloud accounting is more secure than the desktop version where the file is set in Sever or laptop hard drive all information is encrypted and save in cloud servers.

Share and collaborate with ease

Working with colleagues, and sharing data with your advisers, is an extremely straightforward process when you’re based in the cloud. Using the old, desktop approach, you had limited access to your accounts – and that made collaboration with colleagues and advisers difficult.

If your accountant needed specific numbers, they would need to be emailed back and forth, or saved to a USB memory stick and couriered directly to their office.

Reduces paperwork and is more sustainable

Using cloud accounting can deliver the dream of having a paperless office. With an online accounting  system, you can significantly reduce your reliance on paperwork.

Invoices can be emailed out directly to clients, removing the costs of printing and postage – and speeding up the payment process. Incoming bills and receipts can be scanned and saved directly with the associated transactions in your accounting software because your documents are all digitized and stored in the cloud also known as e filling.

Also, you banks transaction can automatically add into QuickBooks, Please note this function does not integrate with Zimbabwean banks, However, you can upload your CSV file bank statement into QuickBooks then, categorize or reconcile the transaction and then posts into QuickBooks


The importance of submitting annual returns

All private limited companies by law have to file annual returns once every year within the required time frame as regulated by the Companies Act.

By filing the annual returns with the Registrar of Companies, the company confirms whether they are still in business or trading, or if it will be in business in the near future. An annual return is a statutory return in terms of the Companies Act and is a summary of the most relevant information pertaining to a company. 

The prescribed filing fees for annual returns are legislated, and as such cannot be waived by the Registrar of companies. When a company fails to submit its annual returns for a long time, the Registrar of Companies will assume the company is no longer trading and may start the deregistration of the company. 

Once a company has been deregistered, the Registrar of companies removes the company from its active records. Legally, the company will now cease to exist and the company name will become available to the general public for registration. 

Once the company is in the deregistration process due to the non-payment of annual returns, it is possible for the deregistration process to be cancelled if all outstanding annual returns are paid up to date.

If however the company is in final deregistration, then the company can apply for reinstatement upon filing of the required documentation. If the application is successful and all reinstatement criteria are met, the Registrar of Companies will change the status of the company to “in reinstatement process”, at a prescribed fee.

To keep your company in good standing with the Registrar of Companies and to avoid any penalties, possible deregistration, or the aggravation of trying to reinstate the company, every company is advised to lodge their annual returns timeously within the stipulated timeframe.

Avoiding Penalties

Ways to avoid incurring penalty fees include:

  1. Being aware of your company’s Annual Return Date
  2. Ensuring that your company’s financial statements are prepared well (Know your authorised & issued share capital)
  3. Seeking assistance from a company secretarial firm such as M&J Consultancy so the annual return is taken care of and reminders are sent to the company

To conclude, filing your Annual Returns is of the utmost importance. If you are not sure of the whole process, then get in touch with us for a detailed guide and walkthrough.