With reports that only 16% of South Africa’s 257 municipalities passed a clean audit for the 2020-21 financial year, accounting experts Xero South Africa said the overall standard of financial management in municipalities has deteriorated significantly over the past five years. .

Country Manager Colin Timmis believes that the government should use new technologies to improve capacity and financial management in municipalities.

“With the advent of technology, there are tools that municipalities can use to consistently apply the municipal accountability cycle, from planning, budgeting, implementation, monitoring and reporting,” Timmis said.

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He believes streamlining business processes can also lead to improved governance, accountability, transparency and management of public funds.

“Technology can help bring together government, small businesses, accountants, banks, donors, technology companies – key enablers of the small business community.

“At the moment, there is not enough collaboration between all these stakeholders. Greater collaboration between key stakeholders will help drive the economy forward. We need to see more openness, awareness and adoption of technologies that enable engagement with government,” he said.

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Collins believes that compliance is one of the key areas where processes can be improved through technology.

“When you think about compliance for businesses, they have to comply with legislation like tax and demonstrate how they keep their books. They undergo regular audits and are required to submit their financial information to SARS, from where they report any irregularities.

“This is where an integration like VAT e-filing makes a real difference, automating manual data entry and reducing the risk of errors to ensure SARS receives high quality data.

“The government could apply the same processes to ensure effective financial management, address any frictions and information gaps and improve data quality,” he said.

Timmis said there are processes and initiatives they could implement to connect more seamlessly with small businesses, and vice versa.

“First, the government should consider the implementation of technology as a key factor in economic recovery and growth. They could run a campaign to promote the benefits of technology and the transition to the Internet. They must also develop, promote and educate all small business stakeholders about the importance and opportunities created by existing technology platforms and API tools.

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“We also need to break down the barriers that prevent SMEs from investing in technology by introducing incentives and providing more education about the direct benefits for SMEs.

“Finally, government can also reduce red tape caused by outdated and time-consuming methods of communication and data processing by moving the SME community into an environment that is driven by data, ideas and using them to identify opportunities,” he explained.

In conclusion, Timmis said that tax relief for small businesses should be a priority for the government to broaden the tax payer base.

“SARS has made significant progress in introducing e-filing options and integration with technology companies to reduce the time burden on small businesses and their advisers when it comes to tax filing. But there is still a big gap between the number of SMEs and those who pay taxes. This is where the use of technology can contribute to a more connected environment, benefiting both small businesses and government,” he said.

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