HR 101 – What to do When . . . You Want to Avoid Clashes with Employees

HR 101 – What to do When . . . You Want to Avoid Clashes with Employees

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd.

Please note that this pertains to South African Labour Relations and Best Practice.

For me, prevention is always much better than a cure.

Here are a few tips that will assist in ensuring that there are a few less ‘clashes’ between employees and employers.

• Make sure that the employees that are in charge of ‘procurement’ of any kind, do not have private relationships with your suppliers.

This means that you should not have a staff member in charge of purchasing all of the stationary for the Company, who is married to someone who owns a stationery store.  This is clearly a conflict of interest and could result in illegal ‘kickbacks’ and the earning of unearned commissions.  It could also end up meaning that your Company is paying bigger fees for purchases than you should be.

• Make sure that your staff members have written permission to carry on with a business that is in competition with your own.

Now, this is just common sense don’t you think?  Staff members shouldn’t be doing anything on the side without your written consent.  Make sure that whatever it is that they are going to be doing to earn extra cash, is not in competition with you, and make sure that it is not going to interfere with their duties at the office.

• Employers cannot expect employees to perform illegal duties.

Be careful here.  If you instruct the bookkeeper not to pay SARS for any reason, you are instructing said bookkeeper to break the law!  Although the bookkeeper works for you and should be loyal to you and your company, you cannot expect the employee to break the law on your behalf.  Make sure that the instructions that you give to your employee are within the boundaries of the law.

• Employers cannot expect employees to ignore their own legal rights in order to satisfy the interests of the employer.

Again, be fair – it’s your business and you can work as much ‘overtime’ as you like, but you cannot expect your employees to work excessive overtime. It’s not good for their well being and ultimately it’s not good for your Company.  Overly tired employees make mistakes that could cost the company dearly.

• An employee who is involved with a Trade Union’s first loyalty is to the Trade Union and not the employer, particularly where the law is protecting the employees’ rights and not the employer’s interests.

As much as this is a difficult one to swallow, it is the law!  An employee, who is a Manager for example, and who is also a member of the Trade Union, cannot be expected to inform on issues that were discussed in the Trade Union meetings.  It is also illegal for the Employer to prevent someone in a managerial position from becoming a Union member.  That said, Managers who are Union members can be disciplined in certain instances.  For example, if a manager was discovered, not disciplining their subordinates because they were fellow Union members, said manager could be disciplined themselves for not performing their own functions.

This is a very difficult one to constrict though, therefore if you have a situation where you feel that a Manager is not performing their duties because of Union issues, I would suggest that you contact an accredited Labour Attorney who will advise you on the case in question.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

Blogging 101 – Responding to Comments

 Blogging 101 – Responding to Comments

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd  

Most of you who know me, know that I have an opinion about just about everything and I am not afraid to voice that opinion.  It wasn’t always like that – there was a time when I just kept quiet, sucked it up, and said nothing.  The problem with that of course is that it does damage inside, to your being.  So once I realized that and got over myself, I stated my opinion, not just to be difficult or give someone a hard time, but to get it out there – to make others think perhaps a little more and even sometimes (if I am perfectly honest) to see if I can get someone to change my mind.

That means of course, that I often leave comments on the blogs or articles that I read and I must say that I feel kind of deflated when I don’t get a response.  I understand that we are all busy, that we all have 101 things that need to be done and usually they all need to be done yesterday – but that said, it’s kind of rude don’t you think?  It’s like not saying ‘you’re welcome’ when someone says thank – you, or not saying ‘bless you’, when someone sneezes.

Think about it for a moment, by ‘enabling’ the comments section on your blog, you are actually inviting people to interact with you, to share their feelings and emotions or thoughts on what you have written and then what . . .  nothing happens, it’s like having a one-sided conversation and quite frankly, that for me is just boring.

For me, it would be the same thing as not answering questions about the topics that I train on or being ‘indifferent’ to others.  We all know that the opposite of love is not hate, but indifference and ignoring someone who has taken the time and trouble to comment on something that you have written, irrespective of whether it is good or bad -  well that is just being indifferent in my book.

Being ignored, that’s just horrid and quite frankly, I often don’t go back to that particular author.  Why should I?  Blogging for me, is not only about getting my message across, it’s also about interaction and engagement, and with interaction and engagement comes relationships and we could all do some more of those.

My blogs have opened my life up to the rest of the world and I now have people with who I correspond all over the world.  From the USA to Russia – from Holland to the UK, Australia to Canada – I’m sure you get the picture.  Do I get business from these people – well not directly, but I have learned a great deal and I am exposed to more than my little world and yes, indirectly I have gotten business and even a mentor or two?

Responding to comments for me is a must, it’s a way to open up a dialogue, to interact, and to grow as a person.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Leadership 101 - The Role and Responsibility of Directors – Part 11

 Leadership 101 - The Role and Responsibility of Directors – Part 11

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

Please note that this pertains to South African Legislation, the King Requirements, and Best Practice.

Ethical Leadership & Corporate Citizenship is the topic for today.

So let’s get right to it . . . What does this mean? The gist is that “Responsible Corporate Citizenship implies an ethical relationship between the Company and the Society in which it operates.”

Here are some of the key questions that Directors should be asking.

1. “Corporate citizenship, sustainability, and stakeholder inclusivity requires judgement, balance, and compromise.  Does the Board have the right composition skills and reliable data to make these types of judgement calls?”

For me personally, this means that the members of the Board must be able to differentiate between doing what is right and doing what is easy.

We live in a world where people’s own agenda, greed, and personal goals are more often than not, out before the good and well-being of the Company, its employees, and often even its own supply chain.

Yes making a profit has to be one of the main objectives of a Company or Organization, but you need to be aware of the consequences and beware of the cost.

2. “Have we assessed the moral and economic imperatives of Corporate Citizenship? Have we taken this into account when reviewing our Corporate strategy?”

This ensures that the manner in which the Company operates and that strategy that is implemented is both moral and ethical.

3. “Citizenship and sustainability risks may be obscure or indirect.  How do we identify and manage those risks as well as opportunities?”

4. “Do we have policies in place that will guide every level of the business in terms of expected behaviours and practices and with reference to our interaction with all material stakeholders?”

The saying “if you fail to plan then you plan to fail,” certainly rings true here and is very pertinent to building a successful and sustainable business.  Policies and procedures ensure that processes are properly followed.

5. “Do we measure the impact or lack thereof, of our Corporate Citizenship initiatives?”

Again in my opinion, “if you can’t measure it, you can’t manage it.” Making sure that processes and procedures are regularly updated and that they correctly used will highlight discrepancies in inconsistencies before they become damaging or huge problems.

Next time we will have a look at specifically what the requirements are around Governing Stakeholder Relationships.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Business Tips - Storing Your E-mails

 Business Tips - Storing Your E-mails

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd - January 2009.

I must admit, this is something that I have had to research on a personal level.  When you get to the stage of getting in excess of 100 mails a day it can be a daunting exercise to try and manage and/or prioritize the mails.

The research that I did came up with the following suggestions:

I keep all emails that pertain to my clients and my service providers.  I have a file for each client and/or each service provider and pretty much in the same way that I would file my paperwork, I use these files on the computer.

So for example, if I have a client ABC Consulting – I would have a folder (under clients) called ABC.  In the folder ABC, I would have subfolders such as invoices, quotes, payments, etc – but for the e-mails, I would also have subfolders for incoming mail and another for outgoing mail.  It just makes it easier if I am looking for something that I sent to the client or something that I received from the client.

The rest of the mails that pertain to anything other than clients and/or suppliers, that I want to keep go into sub-folders of my Inbox.  This means that I can search through all my messages (particularly if I am researching something) all in the same place.

I have also discovered that you can have replies that you send out, sent to a sub-folder too.  How neat is that?   You can write a rule to have messages sent to various folders on receipt or on sending the message, depending on what it is that you want to do.  Click on the Tools tab and then select Rules and Alerts.  Remember though that if you have more than one ‘rule’ that applies to incoming e-mail, the rule that was placed first is the one that takes precedence.

Keeping a handle on your e-mails will make it easier to manage all of the information overloads that most of us experience on a daily basis.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Inspiration – Keep Going

 Inspiration – Keep Going

By Nikki Viljoen of Viljoen Consulting (Pty) Ltd

It is said that you can keep going long after you think you can’t!

So many  times we have heard, and no doubt said ourselves – “I just can’t go on anymore!”  Sound familiar?  Yet somehow we always do.

From my own perspective, it is at these times that I understand that I need to ‘step back’ from the situation, remove the emotion and the drama, the perceptions, and the expectations, and look at the cold hard facts.

Often it is my perception that has become skewered by the “what” is happening around me.  Often I am just too close to the issues and have lost my focus or have become caught up in the emotions of those around me.

I am sure that I am not the only Small Business Owner out there (SMME) who loses focus from time to time and this is not a good thing for any individual.  

We constantly worry about deliverables, cash flow, stock, clients who don’t pay, or clients who can’t seem to make up their minds.  Then there are the clients who want nothing, but then at the 11th hour expect you to perform near miracles to get the work done on time.  Sourcing new clients and accommodating old ones can take the steam out of any engine, and as the people who perform all the tasks in our businesses, it is easy to forget, just for a moment you understand, that we are not superman or superwoman but in fact ordinary men and women who have decided to live extraordinary lives.

So when everything becomes overwhelming and the walls start closing in, take some time out – even if it is only half an hour.  Get out of the office or the store. Get up off your chair, switch the phone off, walk away from the computer.  Brew yourself a great cup of coffee, take a walk or even a long bubble bath, and just relax.  Re-group and then go back to the problem at hand.  

Many times, quite miraculously a solution will have appeared.  You will be surprised just how often, when you think that you just cannot go on, that something, someone intervenes and life becomes sweet and full of promise.

Remember, always have fun and never give up on your dreams!

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or www.viljoenconsulting.co.za 

HR 101 - Are your Staff Expenses or Investments?

 HR 101 - Are your Staff Expenses or Investments?

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

Please note that this pertains to South African Labour Relations and Best Practice Requirements.

Often when I listen to what is being said by SMME’s in the marketplace, I am amazed at some of the responses made to this particular question, and I wonder why it is that they employed staff in the first place.

For me, the only reason that I would employ someone is because of my need for their particular skill or talent in the workplace.  Let me clarify this for a moment.  

Here I am working an 18 hour day and suddenly more sustainable work flows into the business than I can possibly deal with (sound familiar).  So I need to employ someone who can assist me with the mundane things that take up so much of my time in the office.  Clearly, I need an assistant that has strong administration skills, who would be able to keep the office administration up to date, who could manage my diary, who would ensure that I can get enough uninterrupted time to do what I need to do in order to service the clients, while he or she gets on with what they need to get on with.  For me, this would be a junior office administration clerk, who I could, over time, train up and who could eventually progress to a mini-me.  Well, not quite a ‘mini-me’ because he or she should have attributes that complement mine as well as be able to do some of the things that I hate doing. So the bottom line is I would not employ a junior hairdresser, now would I?

Now even though I do not go through a recruitment agency or talent lab type experience, there is still a cost to the company for employing someone to assist me.  I would obviously have to take into consideration that person’s salary and related costs, like commissions, UIF, SDL, the different types of leave pay, workmen’s comp, and any other legislative requirements pertaining to the position.  

Then, of course, there is the extra office space, equipment (such as computers, etc), utilities.  Don’t forget things like medical aid, retirement schemes, training, absenteeism, and so on.

What about training and perks such as car allowances, cellphone allowance, and even travel allowances?

Suddenly I am beginning to feel overwhelmed with all of the expenses, and this is even before I have actually hired the person.

Having more than a little knowledge of the Labour Act, I would also have to start making provisions for things like legal fees, for fighting CCMA and Labour Court cases, as well as costs related to “paybacks” or compensation orders that may be granted!  Whew!  

There certainly is a lot to consider, and herein lies much of the challenge.  You see, many people when they take on a staff member, don’t think about these at all.  All they see is this huge pile of work that needs to get done and a person who will do it – but we are not working with machines or robots, we are working with living, breathing, human beings.

So now the question is again – is the money that you spend on your staff, in order to acquire and retain them, for the skills that they need to possess, in order for them to perform the tasks that you need to be performed – an expense or an investment?

Some say that the staff is an expense and that often this expense is among the biggest, if not the biggest in the annual budget.

Others see staff as an investment in their company.

I don’t really think that there is a right or wrong answer in this instance as it is entirely dependent upon whether you see your staff as a ‘necessary evil’ or as an asset.  It would be dependant upon your own perception or mindset.

For me, in my personal capacity, they are both!  

For me it’s about using proactive measures, it’s about minimizing unnecessary costs and avoiding costly legal battles which would make my employees an asset.  I would do this by having the correct procedures, processes, and contracts in place and by being fair.

On the other hand, I am also a realist and I do know that things go wrong and that there are other expenses and costs that would have to go into the pot.  Un-measurable costs that are associated with issues around the need for time to prepare cases for CCMA or Labour Court, not to mention the time that is actually spent at the CCMA or Labour Court.

When you take all of this into account, it’s no wonder that so many individuals try, where possible to stay away from hiring employees.  It’s no wonder that many see hiring employees as a cost only, with very little added benefit received from them and usually an utterly horrid experience.

The bottom line is as always – what do you think?  

The point that I am trying to raise with this article is that proper investigation and research needs to be done prior to employing someone!  Don’t look at the huge pile of work that needs to be done, have a major freak out, and then hire the first person that comes along – you would be in for a huge amount of expense that you hadn’t bargained on.

Stop for a moment and really think about it – would this person be an asset to your company or would they only be an expense?

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or www.viljoenconsulting.co.za 

Blogging 101 – Being a Blogging Master

 Blogging 101  – Being a Blogging Master

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

First off, let me just say this – not everyone can be a Master (or a Mistress for that matter) – that said, we are still always the Master (yes and the Mistress) of our own destinies.

As a Master (or Mistress) what are our expectations?  What are our expectations of other Masters and Mistresses?  For me, it’s not only about the content, it’s not only about the construction of the sentence or whether the grammar is correct (although that is also very important) it’s also about how much of yourself, your emotions that you put into your writing, and how you connect with the emotional requirements of your audience.  You have to get them excited, you have to connect with their heartstrings, you have to challenge them, you have to make them reflect, you have to make them indignant, you have to shock them, you have to move them in some way!

Again for me, the biggest challenge was getting over my own fear.  You know what I mean, the ‘what if I fail’, ‘what if people don’t like me’, ‘if I succeed, what will be expected of me’?  You can’t be afraid to let yourself out of the bag (never mind the cat)!

We all have conversations with people and we connect, and engage with those people – write like that. Write like you are having an engaging conversation.  Write with compassion, with humour, with passion, and yes even with anger.

People need to believe in what you are saying and they can’t do that or connect with you if you are disconnected from yourself.  Don’t be bound by your own limitations – move past those, go through those, go around those or over them or under them – you’ll learn the best way to connect with, to link to, and to create that particular emotional connection.

If you battle to get started, it’s a good idea to perhaps write down the reasons why you are battling to get started.  Some of the most common reasons are:

- Why – because I am not sure that people will be interested in what I have to say.

- Why – because I am not in the mood to write about anything right now

- Why – it’s a really sensitive subject and I am not sure that I should be putting it out there.

- Why- it’s really difficult to write about stuff that I have never really done before, I need to do some more research.

Actually, at this point, you probably need to really think about what it is that you want to do.

Why do you want to write? Are you passionate about what you do – are you passionate about who you are, and are you passionate about what you want to share? If your answer to these is yes, then you need to tell the story.   Every article or blog that you write needs to tell a story and every story must have a value, otherwise, you are not “sharing”.

Stand up and look at yourself, really look at yourself – you know that you have what it takes, you know that you are really good at what you do.  Let go of your fear and your uncertainty.

Stand up, be yourself, be all of who you are and all of who you can be, and write that story.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Leadership 101 - The Role and Responsibility of Directors – Part 10

 Leadership 101 - The Role and Responsibility of Directors – Part 10

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

Please note that this pertains to South African Legislation, the King Requirements, and Best Practice.

Today we take an in-depth look at Audit Committees.

Now I understand that many of you who are reading this don’t have the numbers in terms of people and resources to have an “Audit Committee” as you may be a Solopreneur or only have a few employees or you feel that your Company is still too small to warrant this.

The reality, of course, is that you may not need a ‘full Audit Committee’ but let me be very clear on this . . . it is in your own best interests to understand what can go pear-shaped, how to prevent it, and then how to monitor and measure to ensure that things don’t get to that state.

I can’t even begin to tell you of the number of occasions when I’ve heard the small business owner say things like “ but I trusted the guy/girl and made them part of my family, how could they do this to me?”  Believe me, they can and they will if given half a chance!

The purpose of an independent Audit Committee is:-

“It fulfills a vital role in Corporate Governance.  It is vital to ensure the integrity of integrated reporting and internal financial controls and it identifies and manages financial risks.”

Even in a small business that does not warrant a full internal Audit Committee, it is important that someone fulfills or is responsible for this role, especially in the internal financial controls and the management of financial risks.  Please understand that it is not the responsibility of the “bookkeeper/accountant!”  It needs to be someone outside of the bookkeeper/accountant!

Here are some of the questions that Directors should be asking irrespective of the size of the Company.

1. “Does the Audit Committee have the appropriate skills to discharge its’ responsibilities, specifically the skills required to oversee integrated reporting.”

In the smaller businesses, this is about making sure that you have the necessary financial literacy to understand the numbers that are reported by the bookkeeper/accountant and to ensure that there is proper segregation of duties. Usually, the numbers (or lack thereof) will tell you that there is a problem, long before you actually are aware of it.

2. “Has a process been approved by the Board to allow the Audit Committee to consult with specialists or consultants to assist the Audit Committee with the performance of its functions?”

So if for example, you are not a specialist or you don’t have an understanding of the ‘how to’ of writing and implementing a process, do yourself a favour . . .  get a specialist in to do that for you. You would not try and service your car if you don’t understand how the engine works or is put together, so why would you write a procedure or process if you don’t know how to do it.

3. “Is there effective communication and coordination of the Board's oversight activities to ensure that the Audit Committee is informed of all significant actual or potential financial and non-financial risks?”

Communications between all the stakeholders i.e. the different divisions and/or the various Committees is a must.  This will ensure that potential financial risks are reported sooner rather than later when there is an obvious problem.

4. “Does the Internal Audit function have the appropriate skills and resources to deliver on expectations regarding the review of Internal Financial controls.”

Please don’t do what a client of mine once did and that was to appoint the tea lady and the receptionist onto the Audit Committee.  I’m sure that you can understand that they are in no way competent to manage that portfolio.  It’s not just about putting ‘bodies’ into positions to be able to say “I have an Audit Committee”, but more about putting the right people into the right space. Make sure that the people who are performing the task are capable and equipped, to fulfill the role. It is not necessary for the Committee members to be qualified Internal Auditors, but they do need to have a level of experience that would add benefit.

5. “Does a mechanism exist for resolving the difference of opinion between the Audit Committee and the Board regarding the Audit Committee’s statutory responsibilities should such differences arise?”

Don’t wait until there is a difference of opinion in the Audit Committee that cannot be resolved, to now try and find a way to find a resolution.  Be proactive and put a process in place with perhaps someone in authority who will be able to mediate and bring closure to the parties who have differences of opinion.

Next time we will have a look at specifically what the requirements are around Ethical Leadership and Corporate Citizenship.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Business Tips – So You Want To Buy A Franchise?

 Business Tips – So You Want To Buy A Franchise?

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

So many times I’ve heard people say “My dream is to open a little coffee shop/restaurant/take away/pizza place (insert your own dream/idea here) when I retire.  Sadly, more often than not they sink their hard-earned life savings into a Franchise something, only to discover somewhere down the road, that it is not what they expected or even worse, the business is not able to sustain them and they end up losing everything.

Research people!  Research!

You really need to know exactly what it is that you are getting yourself into.  You need to understand, in graphic detail exactly what the business entails, especially if you have never worked in that particular arena before (cooking dinner for family and friends once a week is very different to running a kitchen in a busy fast food outlet).  

Here are some of the issues that you need to look at, familiarize yourself with, and indeed, understand at some level.

1. As I mentioned before – research is vital and just to be clear on this, the research that needs to be done needs to be done by you!  You are the one that needs to understand all the pros and cons.  You are the one who needs to be interested in the whole process – therefore you are the one that needs to develop as much firsthand knowledge as possible.  Attend as many franchise expos as possible, surf the internet, find something that matches your passion and once you have decided which franchise you are interested in, you can move to the next step.

2. Now the real research begins!  Firstly, look at the industry that your choice of a franchise is in.  Find out all the information that is available for that particular industry.  Have a look at all the other franchises that are in the same sector.  What makes the franchise that you have chosen ‘stand out’?  Is the sector a growing one (this means that you have to look at lots of statistics and even know how to read them properly)?  Have a look at all of the trade magazines (or on the internet), what do they say about the industry, the sector, the competition, and the franchise that you have chosen?

3. Next you need to look at the brand of the franchise that you have chosen.  What makes it unique?  Why would customers/clients use this brand and not something similar around the corner?  Look at the physical branding – things like signage, logos, staff uniforms, shop fittings – does the branding run through all the stores so that they all look and have the same ‘feel’, or are some of the stores different, and if so why? In other words, is the brand, colours, logos easily identifiable and recognizable?

4. The next thing to research thoroughly is the actual franchise organization.  What are the rights and obligations of the franchisor, and what are the rights and obligations of the franchisee?  What are your expectations and will they be met?  What are the expectations of the franchisor and will you be able to meet them.  What is the support structure in terms of procedures, policies, templates, IT, staff training, product training, and so on?  Will the franchisor give you all the investment and financial information that you need?  Will the franchisor give you their ‘disclosure documents’?  Are their disclosure documents updated annually as prescribed by the FASA (Franchise Association of South Africa)?  Make sure that you not only read but also understand all of these documents.  Ask questions.  Get your lawyer and/or accountant to also look at the documents and ask questions.  Make sure that the answers that you get satisfy the question that was asked and don’t be afraid to ask more questions.

5. If, after all of this you still want to purchase the franchise talk to the professionals, take the documents to a franchise consultant or a business broker (preferably one that works in the franchise arena) and get their opinion.  Get them to look at the questions you asked and the answers you got. Make sure that they are comfortable with every single point in the contract.  Let them explain it all to you again, point by point, and in a language that you understand.

Until next time

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Inspiration – It Might Have Been

 Inspiration – It Might Have Been

By Nikki Viljoen of Viljoen Consulting (Pty) Ltd

John Greenleaf Whittier is the man who wrote today’s quote which goes “For all sad words of tongue & Pen, the saddest are these ‘It might have been’”.

I am often asked if I had to die right now if I had any regrets.  On the face of it, it’s a really simple question but look beneath the surface and it becomes a whole lot more.

For many, there is little more than the drudgery of life.  Putting one step in front of the other with no thought to anything other than remaining barely alive.

For many, there is nothing more than the hope of finding a few hours of work in order to put food on the table.

For others, there is nothing more than the hope that your favorite intersection has not been taken by someone else, and you are forced to beg elsewhere in the heat of the sun, or the cold of winter, through the storms and winds.  Forced to look at people who either show sympathy by giving you a few coins or disgust at the fact that you are begging or many who don’t even see you as human – to them you are invisible.

For many, who merely exist from day to day, there aren’t even any dreams of what could be or what might be, all they have to look forward to tomorrow is exactly what they had today – nothing!

I wonder what they would say if they were asked if they had any regrets?  I wonder if their very lives are something that they regret?

What about those who have been physically and mentally damaged by violence, by crime, by life – would they even understand what regret is, or are they locked into a world so very far from ours?

So, to get back to the original question – do I have regrets, I don’t think so.  There are many things that I have done, that in hindsight, I would have probably done very differently.  But actual regrets – no – I think everything that was meant to happen, has happened at exactly the right time and space that it was supposed to have happened.  Any sooner and I would not have been able to cope and any later and I would have been off in another direction.

So, you see – I am one of the lucky ones.  I can dream, I have hope and although I may have been slightly ‘damaged’ along the way, by life – I am still essentially just exactly who I am meant to be.

Will I change – of course, I will!  I will continue to grow, I will continue to dream and I will continue to move forward – just as I always have.

What about you – any regrets?

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or www.viljoenconsulting.co.za 

HR 101 – What to do When . . . You Have a Witness!

 HR 101 – What to do When . . . You Have a Witness!

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd.

Please note that this pertains to South African Labour Law and Best Practice requirements.

Having a witness, when dealing with a disciplinary, an arbitration, a CCMA hearing or even a court hearing is often the difference between winning and losing!  Doing it all by yourself is often very difficult, but if you have someone who can back you up and vouch for your story, this is usually a winning factor!

Let’s bring in my favorite pair – Mike the employer and George the employee.

Mike and George have had their usual tiff and now they are at the CCMA for an arbitration hearing.  Mike has sent his representative (which in this case would be himself), but he has not sent Sue, who can corroborate his story.  Mike is going to find it extremely difficult to win the case because the testimony of the witnesses (both for the employer and for the employee) forms an important part of the procedure at any arbitration hearing.

The arbitrator (let’s call him Charles) has to start the proceedings, by explaining the arbitration process and the rules – these are (but not limited to):

• That opening statements have to be made by both parties (both Mike and George) to outline what it is that they intend to prove.

• Charles may decide to have Mike present his case first.  This would mean that Mike, at this point should have all of his witnesses come in one at a time to give their testimony.  It is also at this time, that Mike would present any documents or other evidence that he may have to prove that George did whatever it is that he says that George did.

• Each time that Mike or his witnesses give testimony, George is entitled to cross-examine Mike or his witness.

• Charles also has the right to ask either Mike or his witness any questions but only pertaining to clarity – in other words, if Charles is not sure of what Mike is saying, he can ask to have that particular point explained in more detail.  So for example, if Mike’s witness Sue says – “George did not follow procedures” – Charles could ask what those procedures entailed, so as to get a better understanding of the situation.

• Mike also has the right to question his own witness, but only on issues that were brought up in the cross-examination of the witness. So for example, if Mike’s witness Sue stated that George was late for work – Mike could ask her exactly how late George was for work.

• Once all of Mike’s witnesses have been heard, been cross- examined and questioned by both Charles and Mike, and Mike has presented all of his documentary evidence, visual or auditory evidence, then George has his chance to present his case – in exactly the same manner.

Once both sides of the story have been told, in graphic detail, the following will take place.

• Charles will hear closing statements – this is when both sides (just like in a court of law) make a final plea as to why they should be awarded or win the case.

• Charles then needs to take himself off to his office, go through all the evidence again, so that he is sure that he understands everything, and then make the award.  In other words, at this point, he will decide who has won the case.

The evidence that Charles needs to mull over and assess before he makes his decision usually falls into 3 distinct categories.  They are, but not limited to:

• Documents

• Items such as, videotapes or clips, stolen goods, photos, and other such items that would be relevant to the case

• Witness testimony.

Witness testimony is always the most crucial.  For example, if Mike says that George told Sue that he was not coming to work because he wanted to stay at home and watch the soccer on TV, it stands to reason that Sue should be there to confirm and say exactly what it was that George told her.  

So having your witnesses there means that they can corroborate each piece of evidence thereby giving it more weight.

Make sure that when you attend any of the above hearings or arbitration that you have all your evidence in order and everyone present who can back everything up.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or www.viljoenconsulting.co.za 

Blogging 101 – Great Articles equal Great Experiences

 Blogging 101 – Great Articles equal Great Experiences

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

One of the quickest ways to get me to unsubscribe, fire you as a service provider or indeed walk into your competitor's lair, is to irritate me.

You see, for me, it is not just about what the offering is, it’s not just about the product or even the service – for me, it’s about the whole experience.  It’s about how that whole experience makes me feel (and I don’t necessarily mean in a warm and fuzzy or touchy feelie kind of way).  Does it make me want to return, does it make me want to share (in a good way or even when I’m spitting mad), does it make me smile or laugh, does it make me want to change something?

Reading for me, be it articles or magazines or books, have the same kind of effect.  Is it written in a simple manner that is easy to read and understand?  Does it bring forth images that make me smile or laugh or even cry and squirm or shake with anger?  Not every ‘good’ experience is sweetly pleasurable – some sadden and make me think and then act, some challenge and some . . . . well, they just irritate!

They irritate because they are too technical or they use words that necessitate me being permanently attached to the dictionary or they are so devoid of any type of truth or figment of reality that I am blinded by a red mist of anger and indignation at the fact that someone would even think that I would be caught up in their absolute nonsense!

Like many, I do not like to be steeped in and surrounded by negativity and if I am reading something that constantly brings this emotion to the forefront, I will stop and move onto the next article.

As a creature of habit, I usually return time and time again to the same sites.  When I find an article that I enjoy on a site, I will usually ‘follow’ it to see what else comes up.  That said, however, I can just as easily ‘unfollow’, which is something that I will do from time to time if I become disgruntled and irritated with the author or their content.

The reality is that I am not any different from anyone else out there in terms of how I deal with my own set of particular likes and dislikes.  The reality is that there are truckloads and more, of information out there – useful stuff, enjoyable stuff, and of course a load of nonsense too.  It’s freely available to anyone and everyone.  The only thing between someone reading your articles or not is the choice that they make about the experience that they are having.

So, if you want your readers to keep coming back, time and time again, you have to make sure that you do not irritate and annoy them.  Make sure that every article equates to a memorable experience.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za or www.viljoenconsulting.co.za 

Leadership 101 - The Role and Responsibility of Directors – Part 9

 Leadership 101 - The Role and Responsibility of Directors – Part 9

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

Please note that this pertains to South African Legislation, the King Requirements, and Best Practice.

What we are tackling today and looking at it the Internal Financial Controls.

Before I get into the detail on what the requirements are, let me just say here, that there is a mantra that I try to live by and that is “If cash is King, then clarity must be Queen!”

All of your controls, irrespective of whether they are financial or not must be extremely clear on “how the process is run and what it measures,” and certainly this must apply to all of the financial controls.  There must be no room for interpretation or speculation.

Controls that have no purpose or that cannot properly be measured cannot be properly managed and this will most probably lead to the mismanagement of funds, or even worse, theft or fraud.  So please make sure that they are simple and very clear and that they actually serve a purpose. Having a procedure for the sake of having a procedure is a waste of everybody’s time.

Now, back to the requirements.

In order for South African companies to be able to trade globally, we have to be aligned with the global “Best Practice Principles”.  These requirements have been attended to in the Kings I, II, III, and now IV (and will most probably be featured in all the subsequent amendments that are made down the line), so it is of paramount importance that you, at the very least, have read all four, if not understood and digested them all.

The following is therefore required:-

- An integrated report, which includes a statement from the Board on the effectiveness of the Internal Control.  Remember that if the controls cannot be measured they cannot prove their effectiveness.  In my experience, this is where I have to first ask . . “Are there Internal Controls?” and then the next question if the answer is “Yes,” will be “Are these Internal Controls documented?” The next question then, of course, is “Are the documented Internal Controls tested from time to time to ensure compliance?” If the answer to any of these questions is a “No”, please understand you are heading for a world of pain!

- Also included in the integrated report there should be a statement from the Audit Committee on the effectiveness of the Internal Financial Controls.  Of course, in order to be able to quantify this, the report needs to be supported by a formally documented annual review which must include a review, which must further include a review of the framework of the Company’s Internal Financial Control.  This would also need to have been suitably listed.

- Any weaknesses in the Internal Financial Controls, that are considered to be material or that have resulted in an actual financial loss or a reputational loss due to other material losses, or fraud, must be, reported to both the Board and the Stakeholders.  In my opinion, it is a good idea to list what is “acceptable” and what is deemed “unacceptable” as this will remove the ‘emotion’ from the decision when you are faced with it.

- Although the Audit Committee is responsible for the determination of nature and the extent of the formal review of the documented Internal Financial Controls, an external attestation is required on the Audit Committee’s statement on the Internal Financial Control.

So exactly what are the questions that the Directors should be asking?

1. Is there some sort of control framework that governs the financial reporting in the organization, such as (but not limited to) COSO  (Committee of Sponsoring Organizations is the one that is used most often)?

2. Have all the probable risks to “fair” presentation in the Financial Statement results and disclosures been identified and documented?

3. Are there controls in place to ensure that these risks are taken into account, in order to both prevent or discover anomalies in the Financial Statements and then to ensure that they are disclosed in the results.

4. Are the anomalies that were identified by the controls, now also evidenced in the report. Remember that we are aiming for “Full Transparency” here, both the directors and the stake Holders MUST be aware of what is happening in the Company in terms of finance and how it will affect the company!

5. Were the controls identified in 4 above, properly documented in the results and reported to the Internal Audit Committee at the time that they were identified, and were they reported accurately?  This will show transparency.

6. Has the Internal Audit Committee’s findings been properly evidenced and this would also include the assessment that was documented by Internal Audit?

7. Is there a process in place to ensure that the framework remains current at all times.

As you can see it is of paramount importance that all discrepancies are firstly highlighted, and secondly investigated, and then transparently and accurately reported. Finally, once a discrepancy is highlighted and investigated, and reported, a solution needs to be found to ensure that it cannot and will not happen again going forward.

It is also important to ensure that controls and processes are updated and kept current so that new technology or techniques are always included in the audit.

Next time we will have a look at specifically what the requirements are around Ethical Leadership & Corporate Citizenship.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Business Tips – Payroll Tips for Tax – Current Year End – Part 3

 Business Tips – Payroll Tips for Tax – Current Year End – Part 3

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd -  January 2010

Over the last two weeks, I have touched on some of the requirements that an employer would need to work through in terms of the payroll and the current tax year-end.

Here are the rest of the requirements that I came across during my research.

Now you have to get a little technological:

• This is where you have to go to the SARS website at http://www.sars.gov.za and then in the middle of the page towards the top you will see the e@syFile logo.  Click on that to download the file. 

• Once the download is complete you need to capture all the employee information as well at the tax certificate information onto e@syFile.  This must include:

- All the employee’s personal information;

- The employee’s contact details including their residential address;

- The employee’s bank account details;

- The Employment information;

- The Source Codes and Amounts.  Please be aware that you will need to use the correct source codes for all the transactions that were used on all the employee's pay-slips and that where necessary, the source codes may have to be consolidated.  Be sure to enter the correct values for each source code;

• Next you will need to consolidate the EMP201 with the monthly SARS payments on the EMP501 reconciliation.  Make sure that these amounts balance with the tax certificate values;

• The tax certificates and Reconciliation Declaration using SARS e@syFile must be submitted before 31 May annually to ensure that you are not hit with penalties and interest.  Again, diarize it to ensure that it is submitted on time.

That’s the end of that – make sure you keep these notes so that you know what to do in your next financial year-end.  I know that it looks like it could be quite a mission, but the truth of the matter is that once you have loaded what needs to be loaded, most of it is a once-off.  Keep notes since it is only needed once a year, and it is very easy to ‘forget’ what to do.

Remember, if you are not sure about what you are doing rather go to SARS and speak to one of the consultants there – better to do this the right way than to mess it up and have hassles with SARS thereafter.

Next week we will be looking at something different again.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Inspiration - Integrity

 Inspiration - Integrity

By Nikki Viljoen of Viljoen Consulting (Pty) Ltd

The quote today comes from the great Confucius himself, who says:

“The strength of a nation derives from the integrity of the home.”

Pretty straightforward I would say – but what kind of integrity do we have in the home?  Therein lies the million-dollar question!

My Concise Oxford Dictionary says that integrity is: “Wholeness, entirety, soundness, uprightness, honesty.”

Those are some ordinary words with huge meanings behind them and if we would have to live up to them or the perception of them – what would that mean in the grand scheme of things?

On a personal level, integrity means a whole bunch of things – like;

Being honest about things – honest with myself, first and foremost because I cannot possibly be honest with anyone else if I am not honest with myself!

Standing up, and being counted for what I believe in, irrespective of what the consequences to that are.  Things like - I will not tolerate cruelty to animals, to children, or the elderly.  

When making a commitment, sticking to the terms of that commitment or the spirit of that commitment.  It’s about delivering on promises. All the deliverables must be met.

Giving my word – that for me is good enough because my word is my bond!

Treating people the way that I would like to be treated.  So many of us have double standards.  We do things, but then when others do the same thing it suddenly becomes an issue.

Being respectful of people’s time.  Being late for or not pitching for appointments for me is one of the most disrespectful things that I can do to someone, the minute I know that I am going to be late or cannot make the meeting, I phone and tell the person that I am supposed to be meeting.  – by not doing this, I am telling the other person that my time is far more valuable than theirs.

Then of course there is acceptance – none of us like to be judged, especially by someone who doesn’t know us at all, and yet we judge people on a daily basis, based on our perception of what and who they are.  Don’t do it. You don’t have the right!  We all want people to accept us for who and what we are, so how about we afford them the same consideration and respect.  Accept people for who they are.

So, think about it – carefully – what is your integrity like?

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or www.viljoenconsulting.co.za 

 

HR 101 – What to do When . . . You are Battling with Power Outages.

 HR 101 – What to do When . . . You are Battling with Power Outages.

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd.

Please note that this pertains to South African Labour and Best  Practice Requirements.

Here in South Africa, we have an electricity problem – we know it, the staff knows it, the government knows it!  The world knows it, It is no longer a secret.

Whilst Eskom has stated that there will be no more ‘load shedding’, and most people sighed and thought ‘well it’s over now’, the fact of the matter is that it’s not over.  What will happen now, is that instead of planned load shedding, we will have to contend with whatever happens when the power stations just ‘fall’ over!  It will be pretty much the same as ‘load shedding’ only we will not know when to expect it!

Our protagonist, Mike who owns the business, and George who works for him, also feature in this story.  You see Mike is a small business owner, who has not been in business for very long.  He has to count each and every cent, twice – in order to ensure that he is getting the best possible value for money and that he keeps his expenses and overheads as low as possible in order for him to maintain the margins that he is working on, and still give his clients the best possible service and also value for money. 

It can be no surprise that the ‘load shedding’ and soon to be power outages will have a huge impact on Mike’s business.  To make matters worse and kind of ‘in his face’ Mike has to watch his staff, like George – sitting doing absolutely nothing for hours on end when there is no electricity!  That has really got to stick in a man’s throat.

Mike thought long and hard about the problem and decided that he would change George’s (and in fact all the staff member’s) conditions of employment in such a way that the staff would not be paid for the periods of the power outages.  So actually what Mike wanted to do was change the number of hours that his staff worked (to shorter hours for the days that there was load shedding) and then obviously pay them less.

Fortunately Mike, in his old age – has learned to ask questions first and then act!  If Mike had just unilaterally just changed the Conditions of Employment, he would have been in breach of contract and that means that Mike could have gotten himself into a huge amount of trouble with the Department of Labour and it could have cost him a great deal of money! 

The rule is this, as an employer, Mike cannot just change any employee’s employment conditions.  Mike would first have to have a consultation or discussion with the employee and if an agreement to the change was agreed upon by BOTH parties, the change could then take place – it is, however, very definitely a negotiation process. If Mike and George could not come to some sort of mutual agreement, the only road then open to Mike would be for him to then retrench George.  Mike would have to remember, of course, that he would not be able to employ anyone else in George’s position for at least 6 months!

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or www.viljoenconsulting.co.za 

Blogging 101 – Why Blog?

 Blogging 101 – Why Blog?

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

It was a request from a friend who lives far away – the ‘how to’ of blogging that is!

I must say, both the question and the request took me somewhat by surprise.

You see, although I am a technophobe who literally has no clue on how to actually set up a blog (mine was set up by a friend – a mentee actually), the value and content of a blog were not in question from the day that I heard about blogging.  It is an extremely simple concept and quite honestly I am confused by how complicated some people have made it out to be.

Simply put, it is an electronic journal that you can share with the world or not.  It can be locked up and accessible to specific groups of people (like a family who has been scattered to the four corners of the world) or even used as a means to share information with say senior managers in an international company, or you can leave it as an open forum and share the information with anyone.

Quite honestly, it is, in my opinion, one of the easiest and most cost- effective ways to not only market yourself but also provide “Joe Public” with information that they may need but not know where to go in order to obtain it or avail themselves of it.

In my opinion, there is no a single solitary business on the face of the planet that would not benefit from having a blog, and those that use the opportunity (note to self – get the ads up and running) properly and effectively, would also actually have an opportunity to make a lot of money whilst also actually making a profound difference in the lives of others

Each one of us, who runs a business, has something to ‘give’.  The more we tell people about what we do, the more they understand and the more they understand the more they become interested, the quicker we will ‘pop into’ their minds when they need our particular product or service.

Think about it for a moment – you may know of say 5 different bookkeepers.  They are all equally as good as each other, they all have excellent references.  One of the bookkeepers starts writing a blog that actually explains the different terms that bookkeepers and accountants use in a way that you understand and suddenly you start understanding the terminology.  Your bookkeeper decides to immigrate and suddenly you need to engage the services of a ‘new’ bookkeeper.  Which one would you choose?  I know that for me, it would be the one who has been blogging because even though I haven’t physically engaged with them I have on some level engaged when I read the blogs.  There is now a connection with one bookkeeper that I do not have with the others.  

We are all experts in what we do or sell and sharing some of our knowledge and expertise as ‘tips’ will do more for our business than any expensive marketing campaign.  I actually find that doing the research for some of the articles that I write means that my knowledge is expanded too and that is always a bonus.

So – sharpen your pencils and start jotting down ideas on some of the things that you may want to write about or have an opinion on or even if you just want to write for fun – let’s explore the opportunity and see what we can come up with.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

 Blogging 101 – Why Blog?

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

It was a request from a friend who lives far away – the ‘how to’ of blogging that is!

I must say, both the question and the request took me somewhat by surprise.

You see, although I am a technophobe who literally has no clue on how to actually set up a blog (mine was set up by a friend – a mentee actually), the value and content of a blog were not in question from the day that I heard about blogging.  It is an extremely simple concept and quite honestly I am confused by how complicated some people have made it out to be.

Simply put, it is an electronic journal that you can share with the world or not.  It can be locked up and accessible to specific groups of people (like a family who has been scattered to the four corners of the world) or even used as a means to share information with say senior managers in an international company, or you can leave it as an open forum and share the information with anyone.

Quite honestly, it is, in my opinion, one of the easiest and most cost-effective ways to not only market yourself but also provide “Joe Public” with information that they may need but not know where to go in order to obtain it or avail themselves of it.

In my opinion, there is no a single solitary business on the face of the planet that would not benefit from having a blog, and those that use the opportunity (note to self – get the ads up and running) properly and effectively, would also actually have an opportunity to make a lot of money whilst also actually making a profound difference in the lives of others

Each one of us, who runs a business, has something to ‘give’.  The more we tell people about what we do, the more they understand and the more they understand the more they become interested, the quicker we will ‘pop into’ their minds when they need our particular product or service.

Think about it for a moment – you may know of say 5 different bookkeepers.  They are all equally as good as each other, they all have excellent references.  One of the bookkeepers starts writing a blog that actually explains the different terms that bookkeepers and accountants use in a way that you understand and suddenly you start understanding the terminology.  Your bookkeeper decides to immigrate and suddenly you need to engage the services of a ‘new’ bookkeeper.  Which one would you choose?  I know that for me, it would be the one who has been blogging because even though I haven’t physically engaged with them I have on some level engaged when I read the blogs.  There is now a connection with one bookkeeper that I do not have with the others.  

We are all experts in what we do or sell and sharing some of our knowledge and expertise as ‘tips’ will do more for our business than any expensive marketing campaign.  I actually find that doing the research for some of the articles that I write means that my knowledge is expanded too and that is always a bonus.

So – sharpen your pencils and start jotting down ideas on some of the things that you may want to write about or have an opinion on or even if you just want to write for fun – let’s explore the opportunity and see what we can come up with.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Leadership 101 - The Role and Responsibility of Directors – Part 8

 Leadership 101 - The Role and Responsibility of Directors – Part 8

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

Please note that this pertains to South African Legislation, the King Requirements, and Best Practice.

Today we are having a look at the requirements around the Solvency and Liquidity Tests.

The sad truth and reality that I find in most of the SMME clients that I assist, is that they have no idea whether or not they will be solvent next month, never mind for the next 12 months and I know for a fact, that many never even knew about this requirement, much less how to conduct it.

The fact of the matter is that these tests should be done on a regular basis to ensure that the company is, in fact, liquid and therefore in compliance with the New Company’s Act.  Remember failure to meet the requirements of the New Company’s Act essentially means that you, as the Director or the Business Owner can be held liable in your personal capacity.

Issues that need to be tested are (but not limited to):-

- The Net-worth of the Company must be calculated and the assets (no inflated prices please, but rather a fair trade value), must be greater than the liabilities.  Obviously, these should also include ”all reasonable foreseeable” (so your forecasts and budgets would be included here too), contingent assets and liabilities.

Make sure that your figures are current as you will only have yourself to blame if your calculations are off.

- The Company must also be able to pay its debts as and when they fall due for at least 12 months.  These debts, of course, are the ones that are incurred in the normal day-to-day running of the business.

Here’s the kicker!  The following instances are when a Director can be held personally liable for loss, damage, or costs sustained by the Company as a ‘direct or indirect’ consequence of their actions:-

• When the Director is “present at the meeting where the resolution was considered or participated in the decision.”

So this means, that when, at a Board Meeting that was held, it was decided that the new ‘super-duper. super fast, super everything, company jet would be purchased at a cost of R2m. The decision was made despite the fact that the books and forecasts indicated that there would not be sufficient funds to meet the running costs of said machine and although there were several Directors that opposed the purchase, this was not in the minutes, but what was in the minutes was that they were present at the meeting.

• Where the Director “failed to vote against the resolution, despite knowing that it was inconsistent with the requirements of the Act or the Company’s memorandum of incorporation or the Director did not responsibly consider its impact (this would include the instance where the Company undertook any of the above transactions when it was not in a position of solvency and/or liquidity.)”

Let’s take the above example of the purchase of a company jet.  In this scenario, the purchase was put to the vote, but despite the fact that the Financial Director knew that there would be insufficient funds to meet any running costs of the jet, he did not oppose the purchase of the asset.  In this case, the minutes showed that there was no-one opposing the purchase of the jet. In this case, the FD would have “Failed to vote against the resolution, despite knowing that it was inconsistent with the requirements of the Act or the Company’s memorandum of incorporation or the Director did not responsibly consider its impact (this would include the instance where the Company undertook any of the above transactions when it was not in a position of solvency and/or liquidity.)”

So the guys who get funding from the bank to purchase machinery that will reduce the costs of producing their product by 75% and they take that money and go and buy the latest Lamborghini -  this applies to you. You are not compliant with the Act  and can be held responsible in your personal capacity, despite the fact that the Lamborghini is registered as a ‘Company Vehicle!”

So what are the questions that Directors should be asking to ensure that they do not put themselves or their reputations on the line?

1. Firstly, does the transaction that is being voted on require a liquidity and solvency test? Understand that these are not for the daily run of the mill type transactions.  These are the types of transactions where, for example, the Board is making a decision to purchase their own building or buy land in order to build their own premises, or buy a fleet of trucks to deliver the merchandise instead of outsourcing that function, type transactions.

2. Secondly, before the Directors can make an informed decision about point 1. above, they will need to have the necessary (and sufficient) information to allow them to determine whether the Company will still be solvent after the transaction has taken place. 

3. The Directors also have to ensure that all the assets and liabilities of the Company have been fairly valued (not over-stated and certainly not just the “book” value that is recorded on the Asset Register.)

4. Finally the Directors have to ensure that the calculations also take into account all the contingent assets and liabilities.

Clearly, this is not a quick “tick-box” type exercise and the information that the Directors need to both see and analyze must be accurate.  This is to ensure that they are able to reach an informed decision and that that decision is one that makes good business sense and that they will also be able to keep the Company healthy from both a growth and a sustainability perspective. 

Next time we will have a look at specifically what those financial controls are and what is required.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Business Tips – Payroll Tips for Tax – Current Year End 2010 – Part 2

 Business Tips – Payroll Tips for Tax – Current Year End 2010 – Part 2

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd -  January 2010

Please note that this pertains to South African SARS, Basic Conditions of Employment Act, and Best Practice requirements.

Last time I touched on some of the requirements that an employer would need to work through in terms of the payroll and the tax year-end pertaining to 2015.

Here are some more requirements that I came across during my research.

The following information needs to be captured for each employee (where possible):

• Employee Surname and First Two Names

• Employee ID Number

• Employee Passport Number and Country where the passport was issued

• Employee Date of Birth

• Employee Tax Reference Number

• Employee Contact Telephone Number – Home, Business, Fax or Cell

• Employee Residential Address

• Employee Bank Account Details.

Once all this information is loaded or captured the Year-End Procedures can be dealt with.  These are (but not limited to):

• The whole year’s payslips, for each individual employee, needs to be added together and all the source codes for each employee should also be grouped together

• As a ‘balance check’ the PAYE, UIF, and SDL should be recalculated per employee, per month for the year.  These figures should then be compared to the monthly EMP201’s and all the payments made to SARS to ensure that they are correct.

• Again as a ‘balance check’, all the values on the monthly EMP201’s should be added together and compared to all the monthly payments that were made to SARS and they should match.  These amounts should also match the total tax amounts as they appear on the IRP5’s and the EMP501.  Should there be any discrepancies and or differences these should be shown on the EMP501 reconciliation and if necessary they should be paid across to SARS.  For your own records (and in the event of a SARS audit), you should keep a written explanation as to what occurred when these discrepancies took place.

• Once everything is reconciled all the information should be captured manually into the SARS e@syFile.  This must include the information pertaining to each employee as well as the tax certificate values and this then should be submitted to SARS.

That’s enough information to digest in one go, so next time we will continue with the next step of the requirements.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Inspiration - Improving the Present

 Inspiration - Improving the Present

By Nikki Viljoen of Viljoen Consulting (Pty) Ltd

Today’s quote comes from Henry Wadsworth Longfellow, who says,  “Look not mournfully into the past. It comes not back again. Wisely improve the present. It is thine. Go forth to meet the shadowy future, without fear.”

So what does this mean to you?

For me, it’s a reminder not to live in the past.  So many times, I find myself looking at instances that occurred in the past, not only from a personal point of view, but also from a business point of view, and getting upset all over again.  What an absolute waste of time and energy!  It doesn’t matter how upset I get, or how righteously angry I may get – nothing will change what has already happened!  We can’t re-live it, we can’t go back and do it again or do it differently. A’’ we can do is make sure that we do not do it again like that.

This, of course, means that we have to live with the consequences of the past and we can surely learn from our mistakes.  But none of those consequences and our subsequent learning means anything if we don’t use them in the present to make our lives easier.

So when you find yourself wallowing in self-pity because of something that happened to you in the past – do yourself a favour.  Kick your own butt, and get down to applying what you learned and apply the lessons from the past to whatever you are doing now.  

Make a difference in your life now – you cannot do anything about the past, but you can certainly improve the present, by utilizing the lessons learned from your experiences in the past.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or www.viljoenconsulting.co.za 

HR 101 – What to do When . . . You’re not sure about Leave - 3

 HR 101 – What to do When  . . . You’re not sure about Leave -  3

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd.

Please note that this pertains to the South African Labour Relations and Best Practice requirements.

I promised that we would have a look at the subject of accumulation of leave.

This is not a good idea people – not good for the Business at all! Actually, the Letters and Contracts of Appointment that I have, deals very clearly with this point. Let’s examine why it is not a good idea and then I will let you know how I deal with it in the employee contracts.

So George has been working for Mike now for a period of 17 years.  Both George and Mike are very ‘proud’ of the fact that George has not taken a single days’ worth of leave in that entire time.  The perception, of course, is that George is so dedicated to his work that he will sacrifice himself in order to make sure that the business works . . . well! Seventeen years – that’s a long time not to take leave, in fact, it is a whopping 255 days leave that is due to George – almost 9 months worth of leave due!  Incredible wouldn’t you say?  Well not for me, I would say “EEEeeeeeeekkkkk!  Houston we have a problem!”

Let’s have a look at the real reason that George has not taken leave.  You see, personally, I don’t believe that anyone could be that dedicated!  Even people who own their own businesses or work for themselves take a break from time to time and there is anyone ‘dedicated’ to what they do, it’s them.  Wouldn’t you agree?  

One of the biggest frauds that I have come across in my career as Internal Auditor (a career that spans more than 45 years, I might add) ‘popped’ up when we put a stop to all overtime and insisted that people within the organization took their leave.  You see, the people who are committing fraud, or who (as in this case) was ‘in charge’ of all the people that they had coerced into committing the fraud, had to be around in case a question or two was asked – so that they could cover their tracks, make the appropriate excuses or make a timeous exit, should the need arise.  

That is one of the reasons that the Basic Conditions of Employment Act is quite specific about leave and how it should be taken.  Taking a day here or there doesn’t cut it.  Your employees need to take their leave in blocks/weeks/chunks or any other way you would like to describe it.  

Let’s be reasonable, apart from anything else, everyone needs a break, everyone needs to rest and honestly speaking, you are not doing yourself or your business any favors by having people around that are dog tired.  Contrary to popular belief, they do not work to their best capacity and neither do you.  So let them take their time off and make sure that you do too.

So that’s the first reason that your staff MUST take leave – let’s have a look at some of the others.

Although George has been with Mike for seventeen years now, he has been headhunted by Mike’s rival company.  Apart from anything else, they are prepared to give George, double the salary that he is earning right now and they are also going to throw in a car, a petrol allowance, and a cell phone.  George of course, being the loyal employee that he is turning down the offer!  Yeah right!  George hands his resignation in so quickly, it’s written and handed in before Mike can even blink!

Think about this one for a moment -  Mike now has to “payout” the 255 days leave that he owes George and get this – it’s not at 15 days at the rate that George was paid in the first year and then 15 days that George was paid in the 2nd year and so on.  It is 255 days at George’s current rate of pay!  What exactly do you think that this is going to do to Mike’s cash flow, presuming of course that he has one?

This is the kind of stuff that ‘closes’ businesses down – fast.

In the employment contracts that I use, it is stipulated that employees have to take a minimum of 80% of their leave as of 31 December of each year.  The balance of 20% may be accumulated until 31 March of the following year and if not taken by then is forfeited by the employee.

As you can see, it is in your own best interests to ensure that your employees take their leave every year – all of it.

Next week, we will look at a whole new topic!

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or www.viljoenconsulting.co.za 

Blogging 101 – Always be Yourself

 Blogging 101 – Always be Yourself

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

I must admit, I really did have quite a chuckle when I read the article “Be Yourself” by Oleg Mokhov the other day.  You see I am a very literal person and the first thought that jumped up into my mind was ‘well how else could I be anyone other than myself?”  The thought of being or even trying to be someone else is absolutely repugnant to me!

After some thought (and of course reading the whole article through also helped), I got the point.

Mokhov’s point is that that he writes the way that he talks, which is in a ‘very relaxed and informal’ manner, and very much like myself, he keeps it simple and easy to understand.

It appears that some people’s perception is that their own type of personality is not particularly successful and the result is that they then try and force themselves to become someone else and quite frankly unless you are an accomplished actor or actress, this just is not going to happen – remember also, even accomplished actors and actresses say the words and become the persona of someone else’s imagination.  So just don’t do it!

In the words of Mokhov “Are you funny, be funny.  Serious, be serious.  Angry, be angry.”

For my part, above all enjoy yourself and have fun – without that, there’s no real point anyway.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Leadership 101 - The Role and Responsibility of Directors – Part 7

 Leadership 101 - The Role and Responsibility of Directors – Part 7

By Nikki Viljoen – N Viljoen Consulting (Pty) Ltd 

Please note that this pertains to South African Legislation, the King Requirements, and Best Practice.

Today we are having a look at the Roles and Responsibility of Directors in terms of Internal Audit.

Now I understand that most of the SME arena does not have the financial capacity to have an Internal Audit Division as such, but that said there should still be someone looking after the risk aspect of things.

Some of the questions that should be asked by Directors are (but not limited to):-

- Is there an Internal Audit Strategy in place and if so does the plan focus on areas that are most likely to impact the business and therefore the stakeholders? This question should also appear on the Board meeting agenda, at least twice a year.

- Are the Internal Audits effective and frequent enough and is there sufficient frequent communication with the audit committee and the Board of Directors. It stands to reason that if the Board doesn’t know what is going on in the business, they are unable to measure it or even take the necessary step to ensure that potential fraud problems are dealt with timeously.

- Does the Internal Audit Department have the appropriate level of technical and analytical skills required to address all the different types of industry risks that pertain to the business and how often are they measured and assess to ensure that their abilities remain current and are adequate? The members of the Internal Audit Department, in the case of corporations and tasked individuals in the case of SMEs, should be keeping themselves up to date with current fraud techniques, in order for them to be able to set effective checking procedures.

- Is technology adequately utilized in the Internal Audit processes (where applicable) and does it use the existing systems and data effectively in the performance of its work? Here again, the Internal Audit team should keep themselves up to date with the latest audit systems in order for them to remain effective.

- Does the Internal Audit function compare favorably against its peers in benchmark studies and if not how will it be brought up to speed? Clearly, members of the Internal audit team need to also keep abreast of benchmark studies as and when they are made available.

- What is the true absorbed cost of Internal Audit.  Are these costs evaluated on an annual basis? This involves a huge amount of discussion between the division head of Internal Audit and the Finance Department Head (or whoever is responsible for the budgets) and never mind annually, this should be discussed quarterly at the very least.  This is where the actual cost of the Audit team gets set off against the results of what errors, frauds, thefts, etc., have taken place.  Remember ‘prevention’ of these also counts as it too carries a cost.

- Does the Internal Audit function have all the necessary skills as well as diverse skills that are required to give confidence to the audit committee on internal financial control. As with any other employee in the group, the Internal Audit staff should also be attending regular courses to update their skillset.

- Is an annual assessment conducted on the chief audit executives in order to ascertain if the key attributes that are relevant to the business are being upheld on an ongoing basis? Just as the Sales Department is measured on what sales they have successfully made during the year, so too should the Internal Audit Department be measured to ensure that they have not only thwarted potential theft and/or fraud but that they have ensured that the correct procedures have been implemented in order to decrease future attempts of this type of behaviour.

- Is there enough assurance of the Ethics and Risk Management programs?

- In terms of the most recent losses -  did Internal Audit provide any form of comfort that these would not re-occur in the future?

- Finally, does the Internal Audit function have all the necessary skills that they require in order to give the Audit Committee assurance on the internal financial controls as well as the operational, administrative, and HR Controls in the Company?

Next time we will have a look at specifically what those financial controls are and what is required.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Business Tips – Payroll Tips for Tax Year End – Part 1

BUSINESS TIPS – Payroll Tips for Tax Year End – Part 1

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

Please note that this pertains to South African SARS, Basic Conditions of Employment Act, and Best Practice requirements.

Well, I am expanding somewhat in terms of my business and apart from the new Virtual PA that I now employ, I will be looking at additional assistance in the New Year.  This means of course that I needed to look at the new PAYE/SDL and UIF requirements implemented by SARS.  

My Company, of course, is already registered as an ‘Employer’ as I am an employee in my own company and getting myself registered on e-filing was a real nightmare, and I would prefer not to go through that whole experience again, so I have done a little research and whilst I may not know everything (and please believe me when I say that I don’t) here are a few of the things that I did find out.

• The Tax Certificates that are submitted to SARS must be in the format that SARS requires for the current year-end submissions.  My understanding of this is that none of the ‘old forms’ will be accepted.  My concern here is for people who do not have access to the internet – this could be a real problem for them.

• The electronic tax certificates imported into SARS e@syFile must include an Employer Trade Classification code.  If memory serves me correctly, this had to be set up when you originally signed on for EasyFile (although what is so easy about it eludes me at this point).

• The addresses of both the employee and the employer have to follow a specific format when they are submitted.  The format is:

- Unit Number

- Complex Name

- Street Number

- Street/Farm name

- Suburb/District

- City/Town

- Postal Code

• The actual Tax Certificates have to be 30 characters long and these characters are made up of the following

- Employer’s PAYE reference number

- The Tax year (remember, in this case, it will be your current year-end)

- Unique combination of 16 characters

• The Nature of the Person codes have also been updated/upgraded/amended.  The changes in some of them are:

- Code M – Foreign Employment Income (this is no longer in use)

- Code K – Personal Service Trust (this is no longer in use)

- Code H – Personal Service Company ( this one has been renamed to Personal Service Provider to include Personal Service Trust) – talk about confusing!

- Code N – Pensioner (new code) – I have no idea what code pensioners fell under previously.

• If a Passport Number is entered for an employee then the Passport Country of Issue must be supplied.

• Each employee’s Income Tax Reference Numbers are required.

• Contact telephone numbers for each employee are required – big brother is watching.

• Business and Residential Address details are mandatory for each employee – I am not sure how you would handle staff who are residing in squatter camps or informal settlements – and big brother is really watching!

• Employees who are NOT paid in cash are required to supply their bank account details.

• Tax Certificates will be limited to two pages – these are:

- Page 1 – Employer and Employee Demographic information

- Page 2 – Employee Financial Information. This is limited to 13 Income and 7 Deduction Source Codes  - this is why they say that they have simplified the tax returns!

• The total UIF and SDL contributions must also be included on each employee tax certificate.

That’s enough information to digest in one go, so next time we will continue with the next step of the requirements.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

Inspiration – If You’re Not Growing – You’re Dying

 Inspiration – If You’re Not Growing – You’re Dying

By Nikki Viljoen of N Viljoen Consulting (Pty) Ltd

The author of my quote for the week is David Molapo.

"If you’re not growing – you’re dying"

What a powerful statement and how incredibly true! Think about the life of a child. Your mother carries you for nine months - pretty exhausting I might add, and then as she gives birth and thinks 'ok now I can rest for a few moments' and then the child starts wailing to be fed, or watered, or changed. Once they settle into a routine, she thinks, 'ok now I'll rest.' 

Sorry for you, because then start the teething and then the usual children’s ailments and before you know it the baby is crawling, and then walking and getting into all sorts of mischief. Then come the terrible twos with the temper tantrums and then before you know it the child is off to school - 'ok, now I'll rest" thinks the exhausted mother.

Not yet, because there's homework and projects, and the taxi service to and from soccer and rugby and dancing and sleepovers and....... 

Then comes high school and boyfriends or girlfriends and ...... 

Now consider for a moment - what would have happened to the child if as it was born, it fell asleep and that is the way it stayed. Not only would the child have probably 'died' if not physically, certainly in some or other sense of the word, but for all her wanting to 'rest' the mother would have been beside herself with worry as the child was not 'growing' in any sense of the word.

That growth should never stop - from school to University and into the big wonderful world, that abounds with opportunity. Our thirst for knowledge and experience should never abate. If it does we will surely shrivel up and die.

Don't let anyone or anything stifle your natural curiosity - it is there for a reason. Strive to learn, to understand and then to put that skill to use, as you go forward and then . . . well then go and learn some more.

Here's hoping that you have a 'curiosity' filled week!

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or www.viljoenconsulting.co.za