M&J Africa

A BUSINESS CAN SPEND MONTHS CHASING AN OPPORTUNITY

Let's call the owner Farai.

His company had been working towards a sizeable contract. His team had attended meetings, prepared quotations, submitted company documents and
spent weeks following up.

Eventually, things started looking promising.

Then came the request for compliance documents.

Among them was the company's tax clearance.

What should have been a routine administrative requirement suddenly became a problem.

Farai called accounts expecting the document to be sent immediately. Instead, he was told there were a few issues that needed to be resolved first.

“What issues?”

That question opened another conversation.

There were matters on the company's tax position that management had not been actively tracking. Now, instead of focusing entirely on closing the
opportunity, the business was trying to understand its tax affairs under pressure.

This is where tax compliance stops being an accounting issue and becomes a commercial issue.

You can lose money without the taxman ever issuing you a penalty.

Businesses tend to think about tax risk in terms of what they might have to pay.

Penalties.

Interest.

Outstanding taxes.

Assessments.

Those risks matter.

But there is another cost that can be just as painful: the business you fail to win because your compliance isn't in order.

Imagine spending years building a company capable of supplying large corporates, NGOs, mines, government institutions or other major organizations, only to discover that a compliance issue stands between you and the opportunity.

Imagine finally getting into the room with the client you have been pursuing, and suddenly your team is scrambling for documents that should already be available.

Imagine having the people, the product, the capacity and the experience to deliver a contract, but your paperwork tells a different story.

That is an unnecessary way to lose business.

And even outside formal tenders, compliance affects how serious organizations perceive you.

Large customers increasingly want to know who they are doing business with. Banks, investors, potential partners and procurement departments may require documentation before they are willing to proceed.

Your tax position therefore isn't something that should only receive management attention when there is a problem.

It forms part of your company's ability to do business.

This is why we encourage business owners to stop thinking about tax compliance purely as an obligation to the taxman.

Think about it as part of your commercial infrastructure.

Your company registration matters.

Your accounting records matter.

Your financial statements matter.

Your contracts matter.

And your tax compliance matters.

They all contribute to whether your business is ready when the right opportunity arrives.

At M&J Africa, our Tax Health Check helps Zimbabwean businesses independently assess their tax position and identify areas that may need attention.

We would rather discover an issue while there is no pressure than discover it when a tender closes on Friday.

We would rather help you reconcile a problem today than have you trying to resolve it while a potential customer waits for documentation.

And we would rather have you confidently pursue bigger opportunities knowing that the compliance side of your business can withstand scrutiny.

Because sometimes the most expensive tax problem isn't the penalty you pay.

It's the contract you never get.

If your business is growing, pursuing tenders, supplying larger organizations or preparing for bigger opportunities, this is a good time to make sure your
tax affairs are growing up with it.

Request an M&J Africa Tax Health Check today and know where your business stands before the next big opportunity arrives.

Let us help you find the problem before the taxman; or your next customer; does.

&JAfrica

Recently we were sitting with the managing director of a Zimbabwean company. For confidentiality, let us call him Tendai.

Tendai's business is well run. It has been trading for over a decade, it employs more than sixty people and it has a finance team that produces management accounts every month without being chased.

We asked him what the accounts had told him about the last quarter.

There was a pause.

We asked which of his product lines was the most profitable. He gave us an answer, but he prefaced it with "I think".

We asked whether his gross margin had moved in the last six months. He said he would need to check.
We asked when he had last sat down and gone through a set of management accounts line by line with the person who prepared them.

He could not remember.

There was nothing careless about Tendai. His accounts were being prepared on time and filed neatly. They were simply not being read.

This is more common than most business owners would admit. Management accounts get produced because the bank wants them, the board expects
them, or the process has always been there. They are circulated, acknowledged, and then quietly set aside until something goes wrong.

The purpose of management accounts is not compliance. It is to answer questions that only the numbers can answer.

Which parts of this business actually make money, and which parts are being carried by the others?

Is our margin improving, or is revenue simply growing while profitability stands still?

How much of what we have sold has actually been collected?

Where has our cost base grown faster than our income?

Are we financing the business from operations, or from our creditors and our overdraft?

Those are management questions, not accounting questions. A business that cannot answer them is not being run on information. It is being run on instinct, which works well until the market changes.

There is also a practical issue. Management accounts that nobody interrogates tend to drift. Errors go uncorrected, classifications become inconsistent, and by the time anyone looks closely, the comparatives are no longer reliable.

At M&J Africa, we work with business owners and leadership teams to turn financial reporting into something management actually uses. That includes
reviewing how your accounts are prepared, whether they answer the questions your business needs answered, and how your leadership team should be interrogating them each month.

So here is something we would encourage you to do this week.

Open your most recent set of management accounts and give yourself twenty minutes with them.

Then ask the person who prepared them one question: "What in here should be worrying me?"

Pay attention to how quickly they can answer.

If that conversation leaves you with more questions than confidence, speak to us. and our team will arrange a convenient time.

M&J Africa

Empowering African Businesses Through Strategy, Systems & Innovation

&JAfrica

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