Dont pocket the hard cash from your business

Do you have cash under your mattress or in your safe? Stop doing that you are killing your cashflow

To run a business sustainably you need the following bank accounts

. Operations acc

This is where work done in your business is paid. You must leave 60 percent of income in this account for costs of running your business. All monies incl cash come in here and then transferred to Tax acc...profit acc..personal acc ...

.Tax acc

This bank acc is where you save money for taxes eg dividend tax...vat....income tax...paye...uif...skills levy..etc. you mustbe tax compliant else you are doing your business illegally . 20 percent of income must be in this acc. This is after tax money. Save here for taxes

.profit acc

10 percent of income must be transferred to this acc. This is after tax money which can be used to increase human and physical expansion of business or buy new tools and equipment

.personal acc

This is where owner of business gets paid usually 10 percent of income is adequate and there should beno need to pocket the cash. Thats where you get your salary or dividends. Dividends are much better and are tax efficient

Disadvantages of pocketing the cash

This misrepresents your books as it wont be shown. Your financials rather creative accounting will show loss or lack of profit because you are hidding the cash

Hidding cash cause want to evade tax

Evading tax is illegal to start with and strangulate your business. If you cant pay taxes you are definitely not making money and there look at ways to increase your income by growing your business

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