Why Does a Business Need Accounting and Bookkeeping Services?
Accounting is one of the strong pillars that stabilizes a business. It is known as the lifeblood of business since it deals with everyday business transactions. At an organizational level, these business transactions are the daily records that need to be managed to understand where to head in order to achieve a business goal.
The terms bookkeeping and accounting sound similar, but there exists a difference which needs to be cleared. Recording of daily financial transactions is regarded as bookkeeping. It is also known as the double-entry bookkeeping system because each transaction gets recorded along with its corresponding and opposite entry. Accounting is a broad aspect that includes recording, interpreting, classifying, analyzing, reporting and summarizing the available data.
Accounting and bookkeeping practices are followed by each and every organization that exists in the business world irrespective of size, and nature of business for audit purpose.
Botswana Institute of Chartered Accountants (BICA)
BICA, a professional body of accountants was formed in Republic of Botswana under Accounts Act 2010. The main reason behind establishing the institute was to support Botswana’s development and protect the public interests by promoting accounting professionals and providing the best facility to enhance the quality of accountancy prevailing in the country.
BICA has an online business portal known as ‘MyBICA’, to encourage online membership. It provides the flexibility for the users to have a direct interaction with the BICA department, access their data available in BICA dataset, secure online payment system, pay annual subscriptions, view outstanding invoices, etc.
Botswana Company Registry
Companies in Botswana are registered by the Registrar of Companies and Intellectual Property (ROCIP). The entire registration involves two main steps: reservation of company name and submission of incorporation documents.
1. Reservation of Company Name
A reservation fee of P20.00 ($ 1.94) is required to be paid upon submission of Form1 for Company name, and Form 1A for Business name. The turnover period for reservation of company name is 5 days. [P=Pula]
2. Submission of Incorporation documents
Once the company name reservation is done, all the essential company registration forms are required to be submitted for obtaining the incorporation certificate. These forms can be downloaded from the website of the Ministry of Investment, Trade, and Industry (MITI). Upon submission and acceptance of registration documents, a fee of P360.00 ($34.94) needs to be paid.
Tax Registration in Botswana – BURS
Tax registration for a company is essential when it attains the stage of incorporation. The company obtains a Taxpayer Identification Number (TIN) once registered. Botswana Unified Revenue Services (BURS) is a government body that deals with the registration of tax payments. A corporate body might need to register for 5 types of taxes:
- Company Tax
- Pay As You Earn (PAYE)
- Capital Transfer Tax
- Value Added Tax (VAT)
- Withholding Taxes (deals with management fees, dividends etc.)
The corporate tax rates differ for different company structures. Let’s have a look at the corporate tax rates in Botswana.
Corporate tax for resident companies
Corporate tax rate for non-resident companies
Approved manufacturing companies
International Financial Service Center (IFSC) companies
Botswana Value Added Tax Rate
Botswana Investment and Trade Centre
Botswana Investment and Trade Centre (BITC) is a government body established by the act to Parliament to establish as an Integrated Promotion and Trade Promotion Authority (ITPA). Located at Gaborone, the organization plays a vital role in driving the country’s economy and encourages to be a center of attraction for FDI. The body creates enormous platforms that will ensure an increase of participation by different business sectors. The center facilitates multiple services like the company and business registration, issue of trade and business license applications, work permit exemptions, entry visa, work and residence permits, own a bank account, facilitation of construction permits etc. It’s a one-stop center for economy driven services.
Tax Invoice Format in Botswana
Companies incorporated in Botswana must follow a standard tax invoice. According to the Ministry of Foreign Affairs and International Cooperation (MoFAIC), an invoice must contain the following essentials:
- The words “Tax Invoice” in a notable place
- The name, address, and VAT Registration number of the supplier
- The name, address of the recipient of the supply
- The serial number of the individual, date of supply made
- A clear description of the goods supplied stating the quantity and price
- The total amount of tax paid in relation to the supply, and the consideration including tax
Business Setup Worldwide Accounting Services
Business Setup Worldwide understands the complexity and the dealing process behind establishing a business in a foreign land, dealing with foreign accounting rules and legal procedures. Keeping this in mind, we have a wide portfolio of accounting services. These include:
- Bookkeeping and financial accounting
- Compilation of financial statements
- Maintaining payroll and employment taxes
- Audit reports, cash-flow forecasting, bank reconciliation statement
- Company performance reviews
- Cash management
- Custom accounting reports
Benefits of Availing Accounting and Bookkeeping Services
Any corporate body needs to maintain a book of accounts. This gives the birth to giant government bodies that are established to maintain a well-established financial scenario in any economy. Now, let’s have a look at the advantages of availing accounting bookkeeping services:
- Easy to understand the grounds of cash inflow and outflow
- Better clarity in preparation of balance sheet
- Helps to take core decisions like expansion, company purchases
- Clear accounting system helps to enhance the goodwill of a company
- Financial stability gets highlighted
- Tax obligations get fulfilled
- Reporting to stakeholders becomes easy
- A clear and transparent record is helpful during a company audit
- Keeps a track on the complete financial record of the company
- Prevents a company to suffer from unnecessary loss
Business Setup Worldwide is a business consultancy catalyst that helps clients worldwide in establishing their business across national boundaries. Our business experts are professional experts who take care of the accounting part of your business. They build a strong framework that helps you in understanding the foreign accounting processes and carry out your accounting activities lucidly. Apart from this, they also help in sorting out the legal proceedings mandatory to incorporate a business.