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

SOUTH AFRICA - Cape Town - 09-October- 2019 - The Financial Sector Conduct Authority (FSCA) raided Dr Iqbal Survé's offices in Cape Town this morning, in what the businessman described as a "fishing expedition" and "an intimidation tactic". Management and staff said the FSCA, accompanied by police officers, pounced on the offices of Sekunjalo Holdings and African Equity Empowerment Investment (AEEI) without prior notice and tried to confiscate laptops and computer hard drives.The FSCA team arrived at Sekunjalo's offices near the V&A Waterfront saying they were probing a case of irregularly share trading against one of Survé's companies, AYO Technology Solutions.  Photographer Ayanda Ndamane/African NewsAgency (ANA)

Business Entity Incorporation Agents (Company registration agents)

Company registration work has been a profitable small specialized market for unregistered and unregulated company registration and shelf company selling “agents” for the longest time in Company administration.

Over the last 20 years most registered Companies are predicted to have been registered by agents, this includes most of the dormant companies that the office is now trying to weed out.

A new phenomenon that has been brought forth with the new Act is the introduction of the Business Entity Incorporating Agent License, any person who does business registration work which is defined as the preparation by any person for profit, of any document for registration with the Companies Office or for attestation or execution by the Registrar.) This means any Companies office filing whatsoever including the filing of

  • Annual Returns
  • the appointment as company secretary when you are not on the board of directors
  • providing a registered office or business address
  • managing a share registry on behalf of a company
  • arranging the appointment of a nominee

This type of work is now done by the traditional Legal Practitioner, Chartered Accountant, a person registered under the Chartered Accountant and Auditors Act [27:12], or is a Chartered Secretary, must now be done by a person who is registered under the Act as a Business Entity Incorporating Agent.

An individual or a company competence will be judged based on the qualification of the individual Directors of said company, An individual who in his/her personal capacity or as the Director/Chief Accounting Officer of a Company that seeks to be licensed as a Business Entity Incorporating Agent must be either:

  •  Be a qualified Public Accountant or auditor in terms of the Public Accountant and Auditors Act [Chapter 27:12]
  • Must be a holder of a Bachelor in Business Administration degree from a recognized University OR an equivalent prescribed qualification (we are still waiting for further Regulations as to what these equivalent prescribed qualifications will be but it is an intelligent guess that it will most likely be University degrees in the Commerce related disciplines

ANY agent who is not registered under this Act as of the 13th of August 2020 (within 6 months of the effective date of the Act) is not qualified nor do they have the privilege to do any business entity registration work and any prospective licence applicant who does not hold the prescribed qualifications will not qualify to be licensed as such.



It is important for all companies to familiarize themselves with the new Companies and Other Business Entities (Chapter 24:31). The memorandum can only be altered under exceptional cases. It is vital for companies who intend to alter their memorandum to follow all procedures stipulated in the Companies Act.

Special Resolution

A special resolution may be used to alter the memorandum. A condition contained in both the memorandum and lawfully in the articles can be altered through a special resolution excluding conditions prohibited from alteration by the memorandum itself.  Moreover, a special resolution can be useful in altering the objects of the company. This is only possible when the name of the company describes the objects of the company and the objects have to be altered so that the name of the company no longer describes the objects. It is important to note that the memorandum can only be altered if the name of the company is changed accordingly in terms of section 26 (“Change of name”).

Cancellation application

Use of a cancellation application is limited to holders of not less than five per cent in nominal value of the company’s issued share capital and group of shareholders referred to in section 80 (“Group voting on amendments to memorandum”). However, the above-mentioned users should not have voted or consented in favour of the alteration.

A cancellation application has to be made within one month after the date on which the resolution altering the condition specified is made. It can be made on behalf of the persons entitled to make the application. The persons can be appointed in writing. The court can make an order in cases where the application needs amendment. The order is made so that the alteration process is done diligently.

Special Resolution-Companies exempt from using the word “Limited”

The resolution altering the company’s objects shall require notice to the Minister. If no application is made within one month, a copy of the memorandum as altered is delivered to the Registrar. However, if an application is made it will give notice of alteration to the Registrar and within one month a certified copy of the altered memorandum is delivered to the Registrar. Default in giving notice or delivering any document to the Registrar will attract a category 3 civil penalty upon the defaulting company.

In conclusion, companies will not face any challenges in altering their memoranda if they follow all procedures in the companies act. Consultancy organisations can assist companies in explaining procedures and completing the process on the organisations’ behalf.


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.



Normally, the goods taken by the Zimra border officials under the Customs Act, 1962 are deliberately taken by the Customs department. However, in some cases where the seizure is not practicable, it may become necessary to detain the goods for investigation. The provisions for putting goods under custody are contained in Section 110 of the Customs Act, 1962.

The goods are detained for various reasons and at the instance of various agencies of the Department, such as the Directorate of Revenue Intelligence, the Directorate of Central Excise Intelligence, Narcotics Control Bureau and Directorate of Enforcement and even other agencies, like the Central Bureau of Investigation. Once an order for detention of goods is served to the owner of the goods, he cannot remove, part with, or otherwise, deal with the goods except with the prior permission of the proper officer of the Customs.

During the investigation and subsequent adjudication proceedings, if the contravention of provisions of the Customs Act, 1962 and other allied laws is established, the action is taken against the importers/ offending goods as provided in the law. Guidelines for expeditious Customs clearance/provisional release: To avoid delays in the release and minimize hardship to the trade if goods remain detained pending an investigation into any dispute in relation to assessment, customs number must have been activated.

Import/export goods are not to be detained unless prohibited as per the FTP and/ or under other allied laws. However, goods that may be prohibited for importing/exporting will depend on the following conditions;

  • Imports not complying with the specifications/conditions/requirements of various Orders/Acts (e.g. Livestock Importation Act, 1898, Prevention of Food Adulteration Act, 1954, etc.)
  • Where gross fraudulent practices are noticed and release of the goods may seriously jeopardize further investigations as also interests of the revenue. Further, any individual suspected to be prohibited in terms of quantity, value, and description will be seized for being liable to confiscation under the Customs. The Departmental officers will be held accountable for cases where detention of goods has been ordered on insufficient and weak grounds resulting in the unconditional release of detained goods in the adjudication stage itself, where importers have to suffer avoidable demurrage charges/loss by pilferage.

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 Process to Add or Remove a Director from a Company in Zimbabwe

This is a brief article that will look at the process of adding or removing a Director from a Zimbabwean company.

The director can be changed or removed for a number of reasons but the resignation should be under the terms of Companies Act 24:03

Below are a number of provisions that can result in change of directorship:

· Failing to cooperate with fellow shareholders and other company members

· Director is deemed physically incapable of handling the company work due to certain reason.

· Bankruptcy order is made against the director

· Failing to maintain accounts

· Failing to deliver proper tax returns

Some more highlights on changing director:

· As per the Company’s Act, a private limited should have a minimum of 2 directors & Private Business Corporation should have a minimum of one.

·A director of a company must be above the age of 18 and must have identification number. The person can be Zimbabwean or Foreign national

· The decision to appoint or remove a director should be done by the board of directors.  

· Special notice will be filed to remove or appointment of new director under section of the Companies Act

· A receipt and the copy of resolution to remove the director shall immediately send to the concerned director.

· The director can request for reasonable opportunity to be heard in the special notice meeting.

· The outgoing director can make representation in writing against the removal and request to notify it to the company’s members. The same copy shall be sent to every member of the company.

In conclusion, companies set certain clauses for the removal or change of director position. However, company should go according to the companies act set.


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. 

Zimbabwe 2020 Budget Highlights. Prof Mthuli Ncube

Zimbabwe 2020 Budget Highlights: Things that may affect your business

Last week on Thursday, the 21st of November 2019, Zimbabwe’s Finance Minister, Professor Mthuli Ncube released the budget statement for the year 2020. The budget statement covered all of Zimbabwe’s key sectors in detail and their expected allocations for the year 2020. To keep you abreast with this development, here are some of the Zimbabwe 2020 Budget Highlights we noted from Professor Mthuli Ncube’s Presentation. 

1. (Zimbabwe 2020 Budget Highlight #1) Motoring Benefits

Motoring Benefits were reviewed  in relation to engine capacity starting from a minimum 0-1500cc which was proposed to ZWL$54,000.00 and a maximum above 3000cc which was proposed to ZWL$144,000.00

2. Foreign Loans

Interest expense on foreign loans be allowable as a deductible expenses to the extent that the foreign currency exchange rate on loans is determined through the inter-bank market rate with effect from 1 January 2020.

3. Excise Duty

A revision in Excise Duty on Tobacco with effect from 1 December 2019 was proposed, from ZWL$50.00 to ZWL$100.00 per 1000 cigarettes.

4. Immigration

Immigrants  Rebate which was initially put for returning students who imported cars has been reviewed to a maximum of US$5,000.00, with effect from 1 January 2020.

5. Employment

A youth employment tax credit has been introduced in order to support job creation. The tax credit amounts to ZWL$500 per month per employee. However , this tax credit has the following conditions;

  • It has a limit of ZWL60,000.00 per year of assessment, the company should be registered for personal lncome tax and compliant for the preceding tax period 
  • Tax credit will only  claimed after the additional employee has served 12 consecutive months, excluding trainees, interns and apprentice
  • Minimum wage payable to the new employees is ZWL$2,000.00 and it does not apply to supervisory grades as well as corporates with turnover exceeding US$1 million
  • The employees must be below the age of 30 at time of employment , with effect 1 January 2020

6. Salaries and Deductions

The tax-free salary threshold has been increased from ZWL$700 to ZWL$2,000 with effect from 1 January 2020. Taxable income will begin from a gross pay of ZWL$2,000.01 with a highest of ZWL50,000.00 which will be pegged at 40% tax.

Tax-free Bonus has been increased from ZWL$1000 to ZWL$5000 with effect from 1 November 2019.

Taxation of retrenchment packages has also been reviewed from ZWL$10,000.00 to ZWL$50,000.00 or one third of the package, maximum of up to ZWL$80,000.00 with effect 1 January 2020.

7. (Zimbabwe 2020 Budget Highlights #7) Taxation

This is one of the most important of Zimbabwe 2020 Budget Highlights.

The Intermediated Money Transfer Tax (IMTT) , tax-free threshold has been increased from ZWL$20.00 to ZWL$100.00 and the maximum  tax payable per transaction by corporate’s from ZWL$15,000.00 to ZWL$25,000 on transactions with values exceeding ZWL$1 ,250 000.00 with effect from 1 January 2020.

The corporate income tax rate with effect from 1 January 2020 will decrease from 25% to 24%.  The Commissioner General has recognized the current macroeconomic environment and will continue  to excise discretion to waive interests on taxpayers with a good track record and compliance , among other considerations if the 10% Statutory Margin of error has been surpassed.

The Value Added Tax (VAT) percentage has decreased from 15% to 14.5% with effect from 1 January 2020.

In relation to VAT input tax, it was proposed that imported services in the definition of input tax will be allowed to be claimed by registered operators.

The VAT registration threshold has been increased from ZWL$60,000.00 to ZWL $1 million with effect from 1 January 2020.

(Zimbabwe 2020 Budget Highlights) Conclusion

As noted, these are some of the key highlights around the 2020 budget that may directly affect your business. You can share the other highlights with us and we can have a conversion on it. 

In addition to this article covering Zimbabwe 2020 Budget Highlights, you can get a full copy of the National Budget on the Ministry’s website.


Trusts 101: The basics of Trusts

A trust is a fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary.

A family trust is therefore a relationship involving:

  1. A founder/trustor – who creates the trust and decides what goes into the trust deed
  2. Trustees, who hold title to the trust assets in their own names and deal with them as instructed in the trust deed
  3. The beneficiaries, who receive the benefits from the trust.

Beneficiaries may include:

  1. discretionary beneficiaries, who may receive a benefit at the discretion of the trustees;
  2. final beneficiaries, who are entitled to whatever funds are still left in the trust when it is wound up; and
  3. primary beneficiaries, who are discretionary beneficiaries given some sort of priority ahead of other beneficiaries.

Benefits of Family Trusts

The following are some of the advantages of setting up a family trust:

Asset Protection

Assets held in trust are usually protected from creditors of the beneficiaries, or the trustees personally. A usual situation in Zimbabwe is where the parents have personal liabilities (often related to their business interests), and wish to protect their family home from such liabilities in the event they are unable to meet them. In most circumstances a trust protects those assets from personal liabilities.

Protection Against Property Claims

If you give personal assets to your children during your life or in your will, those assets may, in certain circumstances, become available to their partners under the Property Act. However, if your assets are owned by a trust, or are given to your trust on death, your children can continue to receive the benefit of those assets but the assets do not form part of their personal property, and therefore cannot be subject to claims by your children’s partners.

Protecting Property from/for Beneficiaries – You may be reluctant to simply give your assets to your children during your life or on death if you have concerns about their ability to manage their financial affairs. If you give your assets to a family trust, then the trust can provide a vulnerable child with income and/or capital to meet their cash requirements as they arise. This can protect the long-term value of your family’s assets.

Protecting Assets for Future Generations from Potential Tax Law Changes

Family trusts may provide protection against various forms of wealth tax that may be introduced in the future, such as death duties or inheritance tax.

Reducing or Preventing Claims Against your Estate – The Courts can effectively rewrite your Will under the Family Law if it considers that members of your family have been disadvantaged by its provisions. However, the Court cannot rewrite your trust for Family Protection purposes.

General Flexibility to Deal with Law Changes – Modern trust deeds normally allow limited rights of variations to deal with changes in the law.

Confidentiality – Family trusts are not publicly registered and therefore can be kept confidential.

Other benefits

  • During a divorce, a trust can be used to provide for continued maintenance of the children
  • Protect surviving spouses and/or beneficiary (ies) against bad influences/investments.
  • Can be used to benefit special interests such as charities or educational bursaries, even after death, for an indefinite amount of time.

Disadvantages of Family Trusts

The following are possible disadvantages of having a family trust:

Loss of Ownership of Assets

If you transfer your personal assets to a trust, then the trustees of that trust will control the assets. Although you can retain some control by holding the power to appoint and/or remove trustees, or even by being a trustee yourself, it is important to remember that assets you transfer to the trust are no longer your own. If you continue to treat the assets as your own, any trust could be open to challenge as a sham.

You could possible choose the wrong trustees

You could expect problems if the trustees are fighting heirs/inheritors for control. This shows how important it is to have at least one independent trustee