Tag Archive: VIP Payroll


Softline, a provider of business management software to small and medium sized companies, today announced that after months of planning they will be rebranding and will be referred to as Sage  South Africa, effective immediately. Softline is the holding company for prominent South African software products such as Pastel Accounting and Payroll, VIP Payroll, Sage 300 ERP (Accpac) and Sage ERP X3. Softline joined the Sage Group plc in 2003 after delisting from the JSE and is the central team of the Africa, Australia, Middle East and Asia (AAMEA) region, a grouping of territories headed by Softline co-founder and CEO of Sage AAMEA Ivan Epstein.

The Sage Group plc, a FTSE 100 company, is a leading global provider of business management software to SMEs with over 6.5 million customers in 24 countries. Epstein attributes the rebranding in South Africa to the alignment with Softline’s parent company, The Sage Group plc. in the continued pursuit of a global brand. “Softline has been part of The Sage Group plc for many years and over this time we have continued to grow in prominence.  To move forward we believe that it is now time to leverage the global power of The Sage Group and align ourselves fully with the brand.”

Softline was founded in 1988 by Ivan Epstein, Alan Osrin and soon after joined by Steven Cohen. The company was established in the formative years of the business software industry in South Africa, and soon became a leader in the provision of business software and services to SMEs.  The move to Sage will bring about name changes across all of the divisions including Sage VIP (formerly Softline VIP), Sage ERP Africa (formerly Softline ACCPAC), Sage Pastel (formerly Softline Pastel) and Sage Netcash (formerly Softline Netcash) as well as the newest edition to the stable, Sage Alchemex (formerly Alchemex).  “Our current and future customers will continue to enjoy the benefits of our locally and globally developed products that they have come to know and trust, whilst this alignment creates further opportunities to leverage global insights and collaboration.”

Epstein says that while the company’s branding will change, it is business as usual for Sage South Africa. “Our continued vision in South Africa, and globally, is to be recognised as the most valuable supporter of small and medium sized companies, by creating greater freedom for them to succeed,” says Epstein. “This vision supports the path of providing local expertise and leadership combined with global learnings and experience of Sage.”

By Gerhard Hartman, Head of the Africa Division at Softline VIP, part of the Sage Group plc.

Gerhard Hartman

Gerhard Hartman

The African continent has enjoyed its best growth decade on record and is currently one of the world’s fastest growing regions, with six of the ten fastest growing economies in the world. It therefore makes business sense for South African firms to look at expanding into Africa and opening branches in other parts of the continent.

Companies expanding into Africa either need to send South African staff into these countries as expatriates or need to open an operating entity in that country that comprises of local staff members. Either way, companies face challenges in expanding into Africa, especially in setting up their auditing, taxation, accounting and payroll systems that are accurate and compliant with the local legislation of that African country.

In response to this trend, and in an attempt to aid local companies with their expansion plans into Africa, Sage VIP Payroll has partnered with BDO Audit – Advisory and Tax services – and Sage Pastel Evaluation to provide local companies with everything they may need to enter a new country of operation, with confidence.

One of Sage VIP Payroll’s main strategic goals is focused around expansion into Africa with the company currently being operational in 24 African countries. The VIP Payroll Africa Division holds offices in Gaborone, Windhoek and Nairobi; with active alliance partnerships in Zimbabwe, Zambia, Malawi, Nigeria, Ghana, DRC, Kenya, Tanzania, Uganda, Angola, Mozambique and Rwanda.

Companies in Africa are starting to realise the importance of automation and how VIP Payroll can help them make more informed decisions, creating more efficient environments for company growth and return on investment. Salaries continue to be one of the biggest expenses in any organisation while the market for employment is becoming more competitive, making HR an essential part of any company’s strategic advantage. VIP Payroll provides an integrated solution for any size business to manage salary payments and HR strategies effectively. The system enables statutory compliance with authorities in African countries and local support is provided through alliance partners in the country of operation.

BDO has a large amount of experience servicing multi-national companies from across the globe. The organisation aids companies to build a country specific business model for operations in Africa. BDO also has contacts and alliance partners in every country in Africa, except Somalia, making it the best business to partner with when expanding into Africa. BDO’s three phase process includes advising companies on the implications of doing business in another African country, implementation of licensing, permits, registrations and applications in that country, and setting up compliance and business controls for payroll, auditing and accounting.

Common mistakes that companies make when expanding into Africa include not having sufficient knowledge of the country and a lack of operational planning. Preparation is essential as is a solid understanding of the local tax laws and company legislation. Companies also need to educate themselves on the foreign exchange regime, economic environment, legal system and the foreign company processes in each country.  This is where BDO is able to aid companies with relevant information that will adequately prepare them for their new venture.

Pastel Evolution has been operational in Africa since 2001 and has offices in South Africa and Kenya. The organisation has over 2500 corporate customers in Africa and over 70 business partners on the continent, as well as 15 project implementation consultants and 50 call centre support staff. Pastel Evolution empowers business management through finance, inventory management, relationship management, payroll and business intelligence. These systems streamline business processes and enable employees to make informed decisions.

Many companies make the mistake of purchasing systems for accounting, HR, payroll and auditing to be used in their new African venture, that do not offer the in-country support that is needed to implement the software, nor is it compliant with the local legislation.

VIP, BDO and Pastel have a support base of local partners that are more than able to provide tried and tested advice in addition to on-site support to African businesses. All VIP, BDO and Pastel software is customised to comply with local legislation, which effectively takes the hassle out of setting up branches in other countries.

Hard Facts about Africa

  • The 1 billion people that live on the African continent comprises 14% of the global population, half of which are under the age of 35 and nearly half live in cities.
  • The African economy of $1,6-trillion is expected to grow to 2,6-trillion by 2020.
  • Since 2009, Angola, Nigeria, Ghana, Zambia and DRC have been top investment destinations.
  • In 2012 Ghana is expected to show the strongest GDP growth, with Nigeria in fourth position.
  • New investment destinations also include Equatorial Guinea, Guinea, Madagascar, Gabon, Cameroon, Mozambique, Liberia and the Congo.
  • The main sectors for investment in Africa include mining, construction, property development, retail, supplier services to the oil, gas and mobile telephone industries, ICT, security, agriculture, tourism and hospitality.

Doesn’t it make absolute sense to invest in Africa?

By Rob Cooper, Softline VIP payroll and legislative expert

Proposed changes to the Income Tax Act were issued for public comment in July 2012, some of which have a direct impact on employers and computerised payroll systems.

Rob Cooper

Rob Cooper

One change in particular constitutes a major shift in approach from the legislators, but first, a brief overview of the other changes.

Medical Tax Credit Principle to be Extended

From March 2012, we saw the introduction of medical tax credits (tax rebates) for employees under 65 years of age who contribute to a medical scheme.  Changes were also made to the income tax relief granted on assessment to individuals for their out-of-pocket medical expenses subject to certain conditions.

The draft changes now extend the medical tax credit principle for contributions to include those employees who are 65 years of age or older.  The values proposed for their tax credits are the same as those currently used for under 65 year old employees, and are based on the number of dependents.

Then the deduction system of income tax relief for out-of-pocket medical expenses has been replaced by a medical tax credit system, with varying degrees of relief for over and under 65 year old employees, and for those who are disabled or with a disabled spouse or child dependent.

What is of concern is that the tax relief granted for medical contributions and out-of-pocket medical expenses has been whittled away by the changes made last year and the proposed changes in the draft legislation, particular for those taxpayers who earn above the 30% marginal tax rate.

Individuals over the age of 65 and those who are pensioners in particular have been hit hard in recent years by dividend tax changes and interest tax relief amongst other measures.  A further reduction in the assistance from the state for medical contributions and medical expenses is going to hurt these individuals.

The same can be said for families with a disabled person – surely these individuals deserve more support, not less?

Employment-related Insurance Policies

The taxation of employer-owned insurance policies that impact on employees has been the subject of complex changes to the law over the past two tax years.  Just when it seemed that the dust had settled, the draft legislation proposes some more changes that are too complex and too confusing to discuss here.

The words “unintended consequences” again come to mind …

Learnerships

Some fine tuning has been made to the provisions which allow employers a deduction from income of R30 000 at the start and the end of a learnership.  These changes address the delays in registration of the learnership with a SETA which can reduce the value of the incentive, as well as the disallowance of the incentive will be limited to learnerships that the employee failed while working for the current employer.

Accrual of Variable Remuneration

One of the pillars that our tax law stands upon is the concept of ‘accrual’.

Amounts are generally interpreted to have accrued when there is an unconditional entitlement to that amount.  This causes problems for payroll systems that have to withhold employees’ tax on amounts that accrued in one tax year, but were only quantified and processed in the next tax year.  Adjustments to monthly payments to SARS, tax certificates and reconciliations are the inevitable result of adjusting amounts back into a tax year that has already closed.

In one of the most significant changes to employees’ tax requirements in decades, the accrual principle is proposed to be relaxed for variable remuneration items such as commissions, travel payments, overtime and bonuses.

At this early stage, much thought still has to be put into the practical implications of this change, but there is no doubt that it will significantly simply payroll administration over the tax year end for employers and for SARS and is to be welcomed.

Closing thoughts

Lastly, there are some items that have been proposed in the Budget by the Minister of Finance for a number of years and which, while still bubbling away, have not yet made their way into draft legislation.

These include the standardisation of taxation rules for retirement funds, and some changes to the Unemployment Insurance Legislation.

Unfortunately, the political football that the Youth Subsidy has become has been booted into touch, to be replaced by a Job Seeker grant system which has not even been discussed or quantified.

By Anton Van Heerden, Managing Director, Softline VIP and Pastel Payroll

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The debate around whether you are born to be a good leader or whether you can learn to be one has been raging since the dawn of time.  There is however no denying the fact that the success of a business is very much linked to the success of its leaders.  A good leader brings clarity and peace of mind to others by creating a clear vision for a business and leading people towards a common goal.

There are very specific traits that a person should possess to be a good leader.   You must have the appetite for continuous self-improvement and a natural inquisitiveness or thirst for learning that will propel the team into a ‘forward-thinking’ and pro-active mind set.  In the same vein, you must also be able to learn from your mistakes.

Having the ability to really listen to people is key for any business leader, as is the ability to connect with people on their level.  It is however crucial to be self-confident but without being arrogant.  Another particularly important trait is to be able to motivate people in a positive way.  Act in a way that commands respect from others and then respect others as you would like them to respect you.  Be consistent in your actions as it will go a long way in the prevention of confusion, and most of all:  Be trustworthy.

South Africa finds itself in a rather unique situation where social pressure and political agenda often add many obstacles that business needs to overcome in order to tap into the country’s leadership potential.  You literally have to become race agnostic as it continues to be a prevalent contentious issue in the South African landscape.  Access to quality education and training, not only formal training, is another obstacle, and the creation of an effective mentoring and coaching program within any organisation is also something that needs to be carefully considered.

The task of getting people to play an active and solid role in the business starts by nurturing a culture of accountability.  You have to encourage people to take risks, forgive them when they make mistakes and expect them to use their initiative and not merely follow orders.  If you can get that right, you can create a culture where you will be challenged more often, for the better.

A flat hierarchical structure often lends itself to an environment where people are free to use their initiative. In this environment titles are less important and people are expected to speak up. It normally coincides with a more informal culture where process and procedure do not rule supreme but where the workforce is given the freedom to operate within a framework. It does however require a high level of trust, with a diminishing need to closely monitor the people involved. It results in a much more output focused culture where individuals are measured on their outputs delivered, rather than the amount of hours spent at the office.

There is no question that the task of creating a value system for a business squarely rests on the shoulders of the executive management team, which in essence forms the culture of the business.  It guides the collective behaviour of employees and determines the personality of the business. The business leader should be the custodian of the corporate values and should exhibit them through his/her behaviour, to walk the talk as they say.

Values should be the only non-negotiable thing in a business. Your vision and goals might change over time but your values must always remain uncompromised. A business leader should use every opportunity to nurture and grow the value system within the business. For this reason the personal values of people employed by the company should strongly align with that of the business as it greatly contributes in building a strong value system.

There are a great many things to consider when it comes to building a business that is successful and visionary.  It does however start with the business leaders and how they choose to lead their people.

Connected Services

Grant_Lloyd

Grant Lloyd

There’s very little doubt that the internet has arrived and is here to stay – for better or for worse…..

Not only has the availability and the capacity of internet connectivity improved markedly of late, but, the price of such services has shown increased (albeit very gradual) signs of commoditisation in the past year, providing an increasingly compelling service at progressively competitive prices (although South Africa still has a LONG way to go in this regard).

Generally accepted “standard” online applications i.e. those which we are (largely) comfortable using on a daily basis, such as online shopping, internet banking, flight and hotel reservation systems, news feeds and the ubiquitous social media sites, are increasingly being complemented by a steady stream of new online business applications and services.  One has only to consider the initial launch success of both Pastel MyBusiness Online and VIP Liquid Payroll to confirm that the adoption rate of online line-of-business software is on the rise for new entrants into the market segment.

How then does one bridge the gap between the inexorable trend toward online line-of-business software adoption and traditional desktop application users in a similar segment?

In the same way that the adoption of what we (today) consider commoditised uses for the internet (listed above) has been a steady evolutionary process, so too will the switch from legacy desktop line-of-business applications to cloud-based services prove to be a gradual yet inevitable “chicken-little” adoption process rather than a single cataclysmic “big-bang” event.

It is in this evolutionary shift that the advantages and conveniences of connected services can not only aid, but expedite the considerable benefits of dual-deployment business software models i.e. client-side hosted applications with significant connected services capabilities and functionality, together with a vendor-facilitated seamless upgrade path to ultimately complete cloud-based models.

Consider frictionless updates as one example of connected services enabling traditional desktop application to seamlessly update itself over the internet, with little or no intervention from the end-user of the software.  New updates are made available by the vendor on a periodic basis and are shipped invisibly to the end-user leveraging the internet as a transport mechanism.  Gone are the days of CD-based updates and often disruptive installation and implementation cycles.

Imagine to a world of connected payment and financial services where both desktop and cloud-based line-of-business applications offer tightly integrated and yet transparent payment, reconciliation and receipting functionality without the use of traditional front-end banking software in a “clunky” 2-phase approach, once again leveraging the internet as bi-directional transport facilitator.

Whilst the internet and more specifically cloud-based and / or online business applications present some of the most compelling opportunities for re-imagining the way one conducts business in the 21st century, it is reassuring to observe that such leveraging of internet capabilities will almost certainly not be a “one-size-fits-all” model.  Incremental evolution of traditional desktop software, leveraging the internet where appropriate and when business-enhancing, will play as important a role in the evolutionary shift to complete cloud-based business software provisioning, billing and deployment, thereby providing a flexible and extensible “to-cloud” migration path as deemed preferable by individual business requirements, as will pure cloud-only offerings.

-BY GRANT LLOYD, CTO Softline and Sage AAMEA