The Tribune

By Chandra Ferguson

BTB Chartered Accountants and Consultants

Business owners certainly had more than the holidays on their minds as 2014 came to a close. Value Added Tax (VAT) was a looming concern on the minds of consumers and the private sector alike as we stepped into this New Year.

The latest registration data shows 5,580 businesses registered for VAT. These businesses have crossed the annual $100,000 turnover registration threshold, but now what? Do these VAT registrants have the proper systems and processes in place to properly account for VAT? Will these businesses be able to complete the proper filings in order to meet the monthly or quarterly deadlines to file a VAT return?

VAT will usher in a new way of conducting business in the Bahamas. It would be a misconception to believe that VAT will only impact our pricing policy. VAT’s impact will include all facets of business - from procurement to costing, to distribution to accounting.

Staff will need education and training on the implications of VAT in their roles, and systems will need to be modified or replaced to become compatible with the VAT accounting and reporting requirements. Gone are the days when a shoe box full of receipts will be acceptable by any measure.

Making the decision to change is always difficult, and the process of choosing the best system for your company to meet the new requirements of VAT can be a challenge and overwhelming.

A properly installed and implemented accounting software should contribute many benefits to your organisation, including:

• Better decision-making capabilities

Sound accounting software can provide both a snapshot-in-time look at your organisation, as well as the detailed reports and other data necessary for long-term strategic planning.

• Improved cash flow

Cash management is essential for all businesses. Integrated billing, inventory, accounts receivable and accounts payable allow you to manage that valuable cash more easily and efficiently. Better cash management provides your company with more options for revenue-generating campaigns and long- term growth.

• More accurate information

With fully integrated accounting software, you will not only have more information at your fingertips; it will be more accurate information. Unlike a manual accounting system, where a great deal of time is spent cross-checking figures recorded in different ledgers (and where the potential for errors dramatically increases), in a good, computerised accounting system, information is entered only once and is used throughout the system.

• A foundation for growth

The right accounting software can help you as your company grows; expanding as your business expands, allowing for additional users and offering the kinds of reports and other business intelligence data required.

While you will select a system that will fit the needs of your operation, there is one thing that all of these systems should have in common: You should involve an accounting professional in the initial set-up to ensure proper reporting of your financial information.

Something to remember is that there is no one ‘best’ accounting software package, but there is one that is best for your business. Whichever accounting solution you choose, it should simplify your bookkeeping and accounting tasks and grow with your company. All that adds up to quite a few considerations when selecting an accounting solution, but choosing the right software will be time well invested.

• NB: Ms Fergudson is the founder of BTB Chartered Accountants & Consultants (BTB). She has more than 14 years of financial accounting and auditing, process design, internal control assessment, risk, compliance and management consulting experience in the Bahamas, the Caribbean and Canada.

Prior to launching BTB, she served in executive posts in the Bahamian financial services sector. She was also a senior manager and cmpliance officer at Deloitte & Touche.