What SARS Looks for in SME Records and How to Prepare
Running a small or medium business means you must keep your bookkeeping and financial records in order, especially for SARS. So, it’s important to know what SARS needs and to prepare your papers carefully. This way, you can avoid audits, fines, or delays. Here’s what to watch for and how to stay organized.
What SARS Checks in Your Bookkeeping Records
SARS checks several key documents when reviewing SME records. First, they expect valid tax invoices and proof of payments for all transactions. Payroll records must be complete and accurate, matching your EMP201 submissions. Also, monthly and annual reconciliations should be done correctly to keep your books balanced.
Moreover, SARS looks for consistency across your tax returns. Your VAT201, EMP201, and income tax submissions should all match. If there are any differences, they can raise red flags and may lead to further investigation.
Preparing Supporting Documents for Expenses
Every business expense needs proper paperwork. Always match each expense with a valid invoice and make sure it’s correctly recorded in your bookkeeping. This helps if SARS asks for proof during an audit.
Also, to stay organized, keep digital or scanned copies of receipts and invoices in safe, well-organized folders. This makes it easier to find documents and reduces the chance of losing important papers.
Reviewing Cash Flow Reports and Financial Statements
Regularly creating and checking financial reports is important for managing your money well. Income statements, balance sheets, and cash flow reports show how your business is doing. Also, watch out for sudden drops in profits or big increases in expenses that don’t make sense. These changes can catch SARS’s eye and should be fixed quickly.
How to Streamline Bookkeeping with Accounting Software
Modern accounting software helps you manage your records better and faster. For example, you can set it to pay bills or loans automatically to avoid mistakes. In addition, it matches your bank transactions with your records to save time and stop errors.
Moreover, cloud accounting is very useful. It lets you see your money anytime and work with your accountant easily. As a result, your records stay updated and ready for SARS.
