Category: SME/SMME


It is difficult to find another role in today’s business world that has changed as rapidly as the Chief Information Officer (CIO). Only a few years ago, IT heads were there to make sure the basic infrastructure to keep a business communicating was in place and up and running. So while they do have to maintain current and past systems, their new most important role is to drive internal and external innovation. And because innovation is increasingly technology-driven, the CIO is in a perfect position to lead this evolutionary revolution.

Role Diversity

The role of the CIO over the past few years has become more diverse and challenging. CIOs now need to cover a whole lot more ground and stay on top of a rapidly changing field defined by quick shifts and advances in technology, and to incorporate these new methodologies and applications into business.

This fundamental shift in the role of the CIO reflects the changes business environments undergo on many different levels. The single most important factor in CIO recruitment is what new, innovative and efficient solutions they can bring to the company. In stark contrast to the old image of the CIO they are now supposed to ‘wow’ the board with amazing schemes to facilitate company growth,performance, efficiency and collaboration with full user adoption and experience.

Collaboration

Since technology and infrastructure investment have become a central focus, the CIO’s role is becoming more integrated into business process than ever before. In the past, it was the IT department that controlled technology and infrastructure purchase decisions. But with application usability needs such as cloud-based technologies, social media, the abundance of mobile devices, purchase decisions have become more collaborative.

Previously the focus for the CIO was delivering IT solutions and infrastructure, but with minimal collaboration between the IT and other departments across the organization. Now the primary focus is for the businesses and CIOs to work collaboratively and adapt and adopt useful technology with the C-suite firmly on board. Not to mention the need to embrace new employee demands with user-driven technologies, BYOD and social media. Employees are now demanding the usability and mobility in their professional devices that they have with their personal ones.

CIOs need to be a true business partner and support their counterparts in delivering results and differentiation; to help Sales grow the business, to help Engineering deliver a better product to the market, to help our Marketing teams drive new business acquisition.

Bimodal approach

With these fundamental changes to the CIO role and the requirement to deliver both basic IT for an organisation while preparing it for new challenges around big data, the Internet of Things, cloud computing and up-skilling workforces, it may require a “bimodal” approach to IT.

The first accountability will remain as a conventional IT role and manage risk and governance; and the second accountability will be more creative with the need for innovation, agility and new skills.

What is becoming clear is that the mounting challenges at the crossroads between technology and business innovation are leaving CIOs in need of the right tools to enable positive change for their companies.

So in today’s world CIOs need to be agile and innovative to support the growth and performance of the company, they need to adopt a more collaborative approach with their C-Suite colleagues as well as carry out the more traditional tasks around purchasing decisions, risk and governance. So the CIO’s role must shift from protecting and defending the status quo to embracing and extending new innovative capabilities, it needs to transform into the Chief Innovation Officer. In order for CIOs to survive in this ever changing and challenging role they need an Enterprise Resource Planning (ERP) solution. Of course it is not the ERP system in itself that provides the innovation, it is the possibilities it creates through the delivery of better business intelligence that enables better decision making.

 

For more information about ERP Solutions and the changing role of the CIO download our whitepaper: http://www.sageerpx3.com/landing-page-cio

Finance Minister Pravin Gordhan delivered his Budget Speech on 26 February, favouring consistency and steadiness over change and fireworks ahead of the national election on 7 May.

Some tax relief for tax payers in the 2014/15 Budget Speech – 40% of the tax relief was allocated to those who earn up to R250,000 per annum, meaning individuals earning more than R250,000 per annum will receive a little less of the allocated tax relief pool.

Though some commentators had speculated that high earners would need to pay higher income tax, the Minister left income tax rates untouched, says Madelein van der Watt, Development Manager at Sage Pastel Payroll & HR. The lowest tax bracket remains at a tax rate of 18% (annual taxable income up to R174,550) and the highest tax bracket remains taxable at 40% (annual taxable income of more than R673,100).

Tax credits for medical scheme contributions

Effective from 1 March 2012, the medical aid capping system was replaced with a tax credit – bringing in equality for all taxpayers under the age of 65 and improved benefits for lower earners.

In the new tax year, commencing 1 March 2014, monthly tax credits for medical scheme contributions (reduction of tax payable) have been marginally increased from:

  • R242 to R257 for the main member and the first dependent on a medical scheme
  • R162 to R172 for each additional beneficiary on the medical scheme

The medical aid tax credit system allows a reduction on income tax and does not reduce taxable earnings as the medical aid deduction system allowed in the past.

“The credit system is a more fair approach to providing tax relief as each individual contributing towards a medical aid fund will receive equal relief as it is not based on annual earnings. Whether an individual earns R250,000 per annum or R2,500,000 per annum, the income tax liability will be reduced by R257 for each of these individuals with at least a single beneficiary on the medical aid fund.”

From the 2014/15 tax year, medical aid contributions by people older than 65 will also be subject to the medical aid tax credit system. Up until now, those contributions were fully tax deductible. Effective from 1 March 2014, their contributions will also be subject to the medical aid tax credit system.

Is it a fringe benefit?

The company contribution towards an employee’s medical aid yields a taxable fringe benefit.

Generally, any payment made by an employer on an employee’s behalf, must be included in an individual’s taxable remuneration, before calculating the final PAYE deduction. Only pension and provident fund contributions are still exempt from the rule until 1 March 2015.

Regardless of an employee’s age or employment contract conditions, the medical aid contributed by an employer, whether in cash or as a package component directly to the fund, must be treated as a taxable fringe benefit.

The contribution paid by the employer will be subject to employee’s tax and contrary to popular belief, there is no way to structure a salary package to bypass the fringe benefit.

During the 2012/13 year of assessment, 76% of all fringe benefits reported on tax certificates were medical aid contributions made by employers on behalf of their employees.

Medical Aid Contributions must be reported on the employee’s tax certificate

As part of the Employer Filing season, each company is responsible to issue their respective employees with a tax certificate.

Medical Aid Contributions, both the employee and employer contributions must reflect on the employees tax certificate (IRP5/IT3A). If you’re making use of an automated payroll system, the codes are already loaded for you. In addition, a company is making use of an automated payroll system, they can import a payroll file with all the filing requirements directly into the e@syFile™ Employer system and the payroll EMP501 Reconciliation Report to complete the PAYE, SDL and UIF reconciliations. Van der Watt points out that this saves businesses considerable time and cost compared to manual calculation and capturing.

If you’re making use of a manual payroll system or payroll spreadsheets, please make use of the following codes:

  • Source code 4005 for employee and employer contributions
  • Source code 3810 for the taxable fringe benefit equivalent of the employer’s contribution
  • Source code 4116 for tax credits allowed

How can an automated payroll system make your business life easier?

To calculate the correct employee’s tax effect of a medical aid contribution, an employer must take the following into account:

  1. What is the total contribution that must be processed every month?
  2. How much of the contribution must be deducted from the employee’s gross income and how much is payable by the employer?
  3. Is the employer’s payment made as a cash contribution to the employee or paid directly to the medical aid?
  4. Remember to include any employer payment as a taxable fringe benefit when calculating the PAYE deduction for the month.
  5. How many dependents belong to the employee’s medical aid?
  6. Remember to constantly keep track of new dependents added or dependents removed from the medical aid policy.
  7. Remember to check for any contribution increases or change in medical aid cover that might affect the contribution value processed on the payroll.
  8. Don’t forget to calculate the medical aid tax credit after you have determined PAYE based on taxable earnings. The tax credit is based on the number of dependents and must reduce the PAYE value before you calculate the net pay.
  9. Every six months, you need to submit a PAYE reconciliation to SARS detailing the contributions, fringe benefits and tax credits related to medical aid contributions.

Payroll software will take care of the calculations and reporting of medical aid contributions and the PAYE effect thereof.

It is also important to keep in mind that effective 1 March 2014, employees aged 65 and older are also included in the medical aid tax credit system and their contributions may no longer be allowed as tax deductions. If you still make use of spreadsheet or manual methods of calculating PAYE, it is important to adjust your calculations to not only cater for new medical aid tax credits for the 2014/15 tax year, but also to keep in mind that you need to adjust the calculation for your employees aged 65 and older.

“Our software is designed to make your business life so much easier, so that you can focus on running your business. Let automated payroll solutions take care of the six major payroll acts and the ever-changing legislative plethora that governs payroll,” says Sumay Dippenaar, Marketing Manager at Sage Pastel Payroll & HR.

“There is no reason for businesses to rely on manual payroll spreadsheets since we offer automated solutions that are easy-to-use, smart and affordable, whether you deploy them on the desktop or in the cloud. Our subscription-based payroll solution allows you to pay low monthly fees with no upfront capital outlay, keeping your cash flow in mind.” With an online payroll solution, you only pay per payslip that you process. This pay-as-you-go model is cost-effective at R18 excluding VAT per payslip.

Example

Mr Jim Hardens is 67 years old, he earns a basic salary of R15,000 per month and the company contributes the full medical aid contribution of R1,000 on his behalf. He is the only member on his medical aid.

Below, please see how the calculation differs for tax year 2013/14 and 2014/15. Seeing that Jim is over 65 years, he also needs to be taxed on the medical tax credit system, effective 1 March 2014. Jim will enjoy a tax saving of R143.04 in the new tax year.

TAX YEAR 2014/2015
SALARY R 15 000
ADD MEDICAL AID FRINGE BENEFIT R 15 000 + R1 000 = R16 000
ANNUALISES TAXABLE INCOME R 16 000 * 12  = R192 000
TAX AS PER SARS TABLES R 192 000 – R 174 550 = R 17 450 * 25% + R 31 419 = R35 781.50
LESS PRIMARY REBATE R 35 781.50 – R 12 726 = R 23 055.50
LESS SECONDARY REBATE (FOR EMPLOYEES OVER 65 YRS) R 23 055.50 – R 7 110 = R 15 945.55
DEANNUALISE R 15 945.55/12 = R 1 328.79
LESS MEDICAL AID TAX CREDITS R 1 328.79 – R257
PAYE FOR THE MONTH R 1 071.79
TAX YEAR 2013/2014
SALARY R 15 000
ADD MEDICAL AID FRINGE BENEFIT R 15 000 + R 1 000 = R 16 000
LESS TOTAL MEDICAL CONTRIBUTION R 16 000 – R 1 000 = R 15 000
ANNUALISES TAXABLE INCOME R 15 000 * 12 =  R 180 000
TAX AS PER SARS TABLES R 180 000 – R 165 600 = R 14 400* 25% + R 29 808 = R 33 408
LESS PRIMARY REBATE R 33 408 – R 12 080 = R 21 328
LESS SECONDARY REBATE (FOR EMPLOYEES OVER 65 YRS) R 21 328 – R6 750 = R 14 578
DEANNUALISE R 14 578 / 12
PAYE FOR THE MONTH R 1 214.83
TOTAL SAVING R 143.04

 

Nifty Quick Links and Tools

>FREE Salary Tax Calculator

>FREE Online Logbook

>FREE Tax Guide

>Attend a Budget Speech Seminar, everything explained in laymen’s terms

>New Tax Rates

>Everything else you need to know

>Automate your payroll using an online solution 

For the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn. To read more about the upcoming budget speech, click here.

Madelein van der Watt, development manager at Sage Pastel Payroll & HR.

Madelein van der Watt, development manager at Sage Pastel Payroll & HR.

Finance Minister Pravin Gordhan delivered no surprises in his Budget Speech on 26 February, favouring consistency and steadiness over change and fireworks ahead of the national election on 7 May. His Budget Speech once again put job creation, infrastructure development, social spending and education right on top of the nation’s list of priorities.

Taxpayers will benefit from R9,25 billion in personal income tax relief in the new tax year, though this relief hardly caters for the effects of inflation, says Madelein van der Watt, Development Manager at Sage Pastel Payroll & HR.  40% of the tax relief was allocated to those who earn up to R250,000 per annum, meaning individuals earning more than R250,000 per annum will receive a little less of the allocated tax relief pool.

Personal income tax brackets and rebates

Personal income tax brackets and rebates have been slightly adjusted. The amount an individual can earn before being required to pay income tax has been increased for the 2014/15 tax year:

  • Increase from R67,111 to R70, 700 for individuals below the age of 65
  • Increase from R104,611 to R110, 200 for individuals between the ages of 65 to  below 75
  • Increase from R117,111 to R123, 350 for individuals over 75 years

Individuals aged 65 and older will pay less tax due to an increase in the secondary rebate. The tertiary rebate for individuals aged 75 or older has also been increased which means less tax payable by the elderly from 01 March 2014.

The annual tax rebates for individuals have been increased as follows:

  • Under the age of 65 increased from R12,080 to R12, 726
  • Aged 65 to 75 increased from R6,750 to R7, 110
  • Aged 75 and older increased from  R2,250 to R2, 367

Though some commentators had speculated that high earners would need to pay higher income tax, the Minister left income tax rates untouched, says Van der Watt. The lowest tax bracket remains at a tax rate of 18% (annual taxable income up to R174, 550) and the highest tax bracket remains taxable at 40% (annual taxable income of more than R673, 100).

Tax credits for medical scheme contributions

Effective from 1 March 2012, the medical aid capping system was replaced with a tax credit – bringing in equality for all taxpayers under the age of 65 and improved benefits for lower earners. Monthly tax credits for medical scheme contributions (reduction of tax payable) have been marginally increased from:

  • R242 to R257 for the main member and the first dependent on a medical scheme
  • R162 to R172 for each additional beneficiary on the medical scheme

The medical aid tax credit system allows a reduction on income tax and does not reduce taxable earnings as the medical aid deduction system allowed in the past. The credit system is a more fair approach to providing tax relief as each individual contributing towards a medical aid fund will receive equal relief as it is not based on annual earnings. Whether an individual earns R250,000 per annum or R2,500,000 per annum, the income tax liability will be reduced by R257 for each of these individuals with at least a single beneficiary on the medical aid fund.

From the 2014/2015 tax year, medical aid contributions by people older than 65 will also be subject to the medical aid tax credit system. Up until now, those contributions were fully tax deductible.

Fuel levies & subsistence allowances

The general fuel levy and the Road Accident Fund levy will increase by 12c per litre and 8c per litre respectively by 2 April 2014. This will push up the general fuel levy on petrol to R2.25 per litre and R2.10 per litre of diesel. Subsistence allowances paid to employees who travel for business within South Africa, will be tax-free provided the amount paid for meals and incidental costs does not exceed R335 per day. An amount not exceeding R103 per day for incidental costs will also be exempt.

Any good news for SMEs?

Van der Watt says that SMEs could benefit from a recommendation made by the Davis Tax Committee to introduce a tax compliance rebate that replaces the current progressive tax rate structure for income tax on companies. “Minister Gordhan’s speech indicated that he is looking at ways to reduce red tape for small businesses by amending the turnover tax regime and replacing the graduated tax structure for small businesses with refundable tax compliance credits,” she adds.

Youth subsidy and spending

Government will be collecting around R1.02 trillion in tax revenues for the 2014/15 tax year, but how will that money be spent? Mindful of the country’s budget deficit, Minister Gordhan plans to increase real non-interest spending by only 1.9% over the next three years.

Sage Pastel Payroll & HR correctly predicted that the lion’s share of revenue allocation during this year’s budget announcement would go to health services, education and social grants. Minister Gordhan allocated R254 billion for education, R146 billion for healthcare, R143 billion allocated to build new homes and improve basic infrastructure in communities.  Social grant expenditure has risen to R118 billion this year.

The Minister also provided feedback about the Employment Tax Incentive in his speech. The Minister mentioned that already in the first month of implementing the subsidy – aimed at increasing employment for the youth – about 56,000 beneficiaries were recorded.

What’s next?

Though Minister Gordhan’s Budget Speech was conservative, South Africans might see more radical changes to the tax system when he or his successor delivers the Medium Term Budget Policy Statement in October. The Tax Review Committee led by Judge Denis Davis has started wide-ranging investigations into South Africa’s tax system, including a focus on value-added tax, mining taxes and wealth taxes.

In addition, Government will soon publish its National Health Insurance white paper, which may also impact on South African businesses and taxpayers.

Sage Pastel Payroll & HR assists SMEs

To assist SME businesses with the changes outlined in the new Budget, Sage Pastel Payroll & HR is incorporating all of the Budget changes to tax bracket values, medical aid benefits, and tax relief rebates. This will ensure that Sage Pastel Payroll & HR customers are immediately compliant when the new Budget stipulations take effect in the new tax year.  “With our automatic software updates, our customers will have the new year’s tax rates and calculations downloaded as soon as they open their software to process the first payslip run for March 2014,” says Van der Watt.

“We understand small and mid-sized businesses’ day-to-day challenges. Our software is designed to make your life so much easier so you have more time to do what you do best – grow your business,” says Sumay Dippenaar, Marketing Manager at Sage Pastel Payroll & HR.

“There is no reason for businesses to rely on manual payroll spreadsheets since we offer automated solutions that are easy-to-use, smart and affordable, whether you deploy them on the desktop or in the cloud. Our subscription-based payroll solution allows you to pay low monthly fees with no upfront capital outlay, keeping your cash flow in mind.” With an online payroll solution, you only pay per payslip that you process. This pay-as-you-go model is cost-effective at R18 excluding VAT per payslip.

For more information

For more help understanding what the Budget Speech will mean for you and your business – and a chance to win R10,000 – check out Sage Pastel Payroll & HR’s extensive set of online resources for Budget 2014/15:

>Competition: Stand a chance to win R10, 000

>Attend a Budget Speech Seminar, everything explained in laymen’s terms

>Free Salary Tax Calculator

>FREE Online Logbook

>FREE Tax Guide

>New Tax Rates

>Everything else you need to know

>Automate your payroll using an online solution 

For the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn. To read more about the upcoming budget speech, click here.

“It is a daunting challenge for SME businesses to keep pace with regular legislative updates. However, automated payroll software ensures that the essential updates are automatically implemented and that payslip calculations are correct, meeting the latest legislative requirements,” adds Kok.

To help overcome this challenge, Kok says Sage Pastel Payroll & HR interprets legislative changes for start-up and small businesses and ensures that they remain compliant via payroll and HR software. RSS feeds provide information on and notification of legislative and tax changes as well delivering new system functionality releases that ensure companies always process their payrolls on the latest software version.

SMEs generally agree that excessive Government bureaucracy and Government handling of the country’s current economic challenges still top the list of the least favourable aspects of doing business.

The SBI established that globally business confidence is improving but in South Africa managing cash flow is the biggest challenge for growing businesses with government not helping as there remain 4.7-million unemployed, a lack of basic skills and protection of employed people while SME businesses battle with wage and payroll legislation.

Recognising the pressures on SME business in the current difficult economy, payroll and HR software specialist Sage Pastel Payroll & HR has introduced a payroll and HR software solution that businesses can obtain on an affordable subscription monthly payment plan.

SME business contributes significantly to the economic growth in South Africa so there is a need to harness entrepreneurial businesses and ensure that they succeed.

According to the SBI survey, South Africa is generally downbeat about local economic prospects with a low score of 44.10%, which is on a par with the UK and US at 40.65% and 41.53% respectively.

Mobility provides start-up businesses with agility and seeing as the owners are invariably busy managing many aspects of their business, Kok says Sage Pastel My Payroll Online is a lucrative online payroll solution for start-up companies. Online payroll solutions can be obtained on a ‘pay-as-you-go’ basis whereby businesses only pay when they use the system.

“It is important to provide South African companies with more than just a box of software,” says Sumay Dippenaar, marketing manager at Sage Pastel Payroll & HR. Telephone and email support services can assist users with payroll, legislation and process enquiries. “Businesses should opt for a payroll provider that offers a national footprint of certified payroll software installers to ensure they benefit from professional installation of their payroll and HR software solutions.”

For the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn.

Staff performance reviews are critical in most businesses yet unpopular with the majority of managers who would probably admit they find conducting reviews a tedious task. However, with proper planning and the use of payroll and HR software, performance reviews can be a simple, quick, valuable and motivational experience for managers and employees.

The key is to ensure that the performance review process is simple and quick. “Avoid making the review process too complex or it could become both intimidating for employees and tedious from an execution point of view,” says Phil Meyer, technology director at Sage Pastel Payroll & HR.

“The answer is to measure less, more frequently. Keep the process simple and develop a habit of conducting reviews more often as employees generally are more comfortable with this approach.”

If simplified, quick reviews that are regularly conducted enable managers to deliver more value to employees, identifying areas where improvement is necessary and providing the employee with an opportunity to improve in those areas by the next review. A combination of regular short reviews with one in more detail at longer intervals probably offers the greatest value to both employers and employees.

“Despite the fact that performance reviews are not intended to be a tool by which to determine salary increases, they often end up playing that role,” adds Meyer. “The real objective, however, is to regularly identify areas of concern and areas of excellence to the benefit of both employee and employer.”

For employers, Meyer says well-developed personal skills lead to positive performance review outcomes and he points out that where regular reviews are implemented, employees who have received a negative review at least have a chance to turn that into a positive outcome at the next one.

“Human Resources Management (HRM) is a vital component of good business practice but doing it properly and effectively is not always that easy. This is where technology in terms of payroll and HR software solutions can ensure that the correct systems and processes are firmly in place.”

Aligning employees to the company vision, mission and objectives is achieved through measurement and regular reviews. It is important for employees to receive recognition for achievement and to be made aware of under-achievement and what they need to do to rectify it.

Meyer recommends that reviews should take five to 10 minutes. “Regular appraisals and feedback is the way to keep on track. Employees have opportunities to improve and that improvement is easily traceable over shorter periods of time.”

“Automated payroll and HRM software solutions assist managers by offering pre-defined Key Performance Area (KPA) and Key Performance Indicator (KPI) categories and review templates that are automatically kept on record. Management is therefore able to store all review records and accurately monitor staff performance improvements.

“Employees like to receive written feedback from reviews, even if only by email. Such brief reports provide a base for comparison and both parties know where they stand. The next review will enable both parties to identify the levels of improvement and progress achieved,” concludes Meyer.

For the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn.

South African businesses are confident about their own prospects, but they are worried about the country’s economy. That’s one of the key insights to emerge from the Sage Business Index for 2013, an annual survey of more than 11,500 SMEs around the world. More than 1200 South African SME’s also participated in this survey.

Business partners , media and Sage staff joined us on 18 October at our Woodmead offices to hear the local results of this annual survey. In addition to presentations from Sage’s Ivan Epstein and Rob Wilkie, Alec Hogg presented a very encouraging view of South Africa’s economic future. Pavlo Phitidis also led a fascinating panel discussion about the future of small business in South Africa.

Delegates heard that global scores this year were the highest since the Business Index began in February 2011, suggesting that business confidence is returning worldwide in the wake of the global economic crisis. But South African companies, on the whole, were concerned about conditions in their own country.

Some 23% of South African businesses say their biggest challenge is the preponderance of bureaucracy and business legislation. And 15% name the government’s handling of current economic challenges as an obstacle.

Close to half (48%) argue that skills development and education is one of the most important things the government could do to boost confidence, followed by bringing stability to exchange rates (47%) and reducing bureaucracy and business legislation (42%).

For more findings from the Sage Business Index look out for future posts or visit businessindex.sage.com

The Essential CIO

Welcome to the biennial IBM Global Chief Information Officer Study, reflecting face-to-face conversations with over 3,000 CIOs from organizations of every size, sector and region. Through these conversations, we have gained a stronger sense of the primary issues impacting CIOs in the two years since our inaugural study. One of the most compelling findings in the study is that CIOs are now increasingly in step with CEOs’ top priorities. One priority they agree on is how critical it is for today’s public and private sector organizations to derive insight from the huge volumes of data being amassed across the enterprise, and turn those insights into competitive advantage with tangible business benefits. CLICK HERE to read more

Saul Symanowitz (Divisional Manager: Sage Pastel BEE123) , Hon. Rob Davies (Minister: Department of Trade and Industry), Thulani Fakude (Business Development Executive: Sage Pastel BEE123)

Saul Symanowitz (Divisional Manager: Sage Pastel BEE123) , Hon. Rob Davies (Minister: Department of Trade and Industry), Thulani Fakude (Business Development Executive: Sage Pastel BEE123)

Sage Pastel, has donated R7.5 million of software, training and other support interventions to the newly formed Black Management Forum (BMF) SMME Programme.

Launched this week by the Minister of Trade and Industry, Rob Davies, the BMF is extending its support for the development and empowerment of black businesses in the SME sector.

“With a 70% first-year failure rate amongst local start-ups, small business owners need as much support as possible,” said Saul Symanowitz, head of Sage Pastel’s BEE123 division. “Foundational business systems and basic business knowledge are not always part of an entrepreneur’s skill set and the Sage Pastel business toolkit will go a long way to providing that support.”

Sage Pastel will contribute to the BMF SMME Programme by donating 500 toolkits to participating small businesses.  This business support system, which is dubbed the BMF SMME Business Bundle, covers the key areas of accounting, legal, human resources, BEE and marketing. The retail price of the toolkit would be prohibitive for most small businesses.

Sage Pastel has been the leading developer of business and accounting software for small, medium and growing businesses for over 23 years and acknowledges the importance of this sector in building the local economy.  “This donation is part of our on going support for small businesses in South Africa. SMEs play a vital role in economic growth and employment creation. It is essential to ensure that businesses operating in this sector are viable and sustainable in the long term.” comments Symanowitz.

Minister Davies stated that his department supports the development of strong and productive enterprises, endorsing President Jacob Zuma’s position of the need to develop black industrialists. He also indicated the importance of encouraging symbiotic relations between small and big business, and using BEE codes to ensure small business development and the growth and expansion of a healthy SMME sector.

By Steven Cohen, managing director, Sage Pastel Accounting

Steven Cohen

Steven Cohen

To succeed in business, exceptional service is essential. Everyone says they do it but I question its true impact, particularly when I consider that everything is automated these days. In the world of electronic communications, everyone auto-signs their emails with a warm and fuzzy salutation, your birthday is recorded in a customer relationship management (CRM) system that triggers a congratulatory SMS on the appropriate date and it’s seldom that you get to talk to a real person at a call centre anymore. The result of the, so-called benefits of technology is a techno-void between a company and its customers.

The Extraordinary Customer Experience

Sage, the global parent of Sage Pastel Accounting has launched a new Extraordinary Customer Experience initiative which will benefit its 4 million clients globally. The programme’s key objective is to build real relationships with customers using an old-fashioned method; people.

Initially I was cynical about the advantages such a plan would bring to the business. Our local contact centre is manned by real people and it’s considered one of the best – it wins local and international awards all the time and is currently a regional finalist in three categories of the highly regarded Contact Centre World Awards run by ContactCentreWorld.com.

However, our new service initiative requires more than just people to offer extraordinary customer service; it’s their attitude and approach to the customer that is so crucial. In addition to the programme’s need for passion, accountability, collaboration and being enterprising when dealing with customers, I am drawn to its requirements for creating working conditions that encourage people to succeed!

It’s all about attitude

As a business leader, I’ve always said that it’s important to stimulate the thinking of those around you. This can only be applied if you understand that attitude and not just aptitude is essential when employing at any level in the organisation. I like to see the interview process as a gate that only lets exceptional people in – and it’s part of my management ethos to pay more for a good person. So, I think I am on the correct path to getting the customer service experience right but now the hard work really begins.

For the Extraordinary Customer Experience to become a reality we need to change the way we think about customer service. I want us to own every customer experience and not simply sell stuff to people because we have targets to meet. We need to build real relationships with all of our clients and recognise that a new client or a satisfied contact centre customer is not just another successful transaction. In addition it’s important to define what we are delivering to our customers in relation to what our customers think they are getting – a disconnect at this point is the difference between exceptional or deficient service.

by Anja Hartman, HR Director at Sage VIP

Anja Hartman

Anja Hartman

The impact of employees that intentionally refrain from adhering to company rules, as well as the cost, time and energy wasted to solve such issues are counter-productive. For this reason, organisations should try to avoid the appointment of a ‘toxic’ employee as far as possible.

At VIP a simple rule is used when recruiting employees: “hire the smile and teach the skill”. VIP has a very strong value-based culture and instils it from the day that the employee starts with the company.

Companies have the right and responsibility to manage its business in a profitable way. Employees must therefore be managed in such a way that it will enhance efficiency and profitability, which implies creating and implementing regulated standards of behaviour.  In order to be effective, the employee needs to know which actions are regarded as unacceptable and the reasons for it.

The difference in how you approach a ‘toxic’ and underperforming employee lies in the question:  Are they willing and/or able to do the job?  It is almost always related to either their attitude or skill.  The underperforming employee is usually willing but not able to do the job while attitude is often found at the core of ‘toxic’ behaviour.

Underperforming employees are often incapable of doing the job for which he/she has been employed due to lack of skill, knowledge or ability. Companies should place their emphasis on matching the talent of the candidate with the role requirements during the recruitment and internal movement processes. A misfit of these key indicators often results in underperformance.

Underperformance can also be referred to as circumstance of ‘no fault’ on the employee’s side and should be addressed by means of counselling procedures, such as:

  • Step 1: Assessment – Review the content and standards of the job, evaluate the performance and pinpoint shortfalls. Identify and discuss the reasons for the sub-standard performance. Assess the employee’s competence against the job standards.
  • Step 2: Action plan – the manager and employee agree on the appropriate plan of action to rectify the situation.
  • Step 3: Review – decide on a reasonable date to review and monitor the improvement and establish if the underperformance has been resolved. A secondary review date can be set.
  • Step 4: Counselling enquiry – If it becomes clear that even after further counselling, the employee still does not perform in accordance with the required standards, or does not prove that he/she is capable of achieving the required standards, a counselling enquiry is called. A counselling enquiry is the medium through which the fair and just procedures required by law are conducted. A dismissal without an enquiry is deemed to be unfair.

The above-mentioned guidelines and steps do not refer to those situations where the employee is capable to perform in accordance with the standards set, but intentionally or negligently refrains from adhering thereto.

When an employee’s conduct is not in line with the rules, regulations or values of the company, it is dealt with as misconduct in accordance with the company’s disciplinary code and policy. It is however impossible to list all possible situations in the disciplinary code and it should therefore not be seen as an exhaustive list of conduct that the company will address by way of disciplinary action in the form of a disciplinary hearing.

The guidelines for a disciplinary hearing:

  • Step 1: Investigation – investigate the facts before embarking on formal action.
  • Step 2: Notification of the hearing – sufficient written notification of the hearing should be given. Employees have the right to internal representation and if required, an interpreter.
  • Step 3: Conducting the hearing
  • Step 4: Applicable sanction – if the employee is found guilty a decision is taken after mitigating and aggravating circumstances are presented.
  • Step 5: Notification – the employee is notified of the outcome, if they are dissatisfied with the outcome they may appeal.