Kindly contact us via info@virtualaccountant.ng or whatsapp +234(0)8029753761 or Call +234(0) 08086108687. You can also see our website: www.virtualaccountant.ng

For every organisation whether large or small business risks abound. One of such risks is the risk of bad debts.

It is worthy of note that credit sales is the life wire through which businesses run. In order to survive in a hostile and very competitive environment, entities must offer some form of credit or the other. This helps to stimulate sales, improve receivables and increase inventory turnover.

However, like every business endeavour, credit sales comes along with its own baggage; the risk of certain receivables turning bad and irrecoverable. The risk of bad debts is inherent in every business operation and cannot be wished away. However, this risks can be effectively managed in order to minimise its effects on the entity. There exists various risk management strategies that could be deployed in order to mitigate against this risk.

Some of this methods specific to our environment are:

1. Offer top quality services.

Charity they say begins in our domain. The entity must be known to produce very top quality goods /services. There is a direct link between the quality of services and the percentage of debts that might end up becoming bad. When customers are not satisfied with the quality of work done, the natural response will be to withhold payment is a 'cold war' styled protest.

2. The organisation must have in place a step by step receivables management strategy. Clear time line course of actions must be in place to adequately track receivables as they fall due.

For instance:

After week 1, send out demand notices.

Week 3, send out reminders to the demand notice.

Week 4, Issue threats of discontinuation of services.

Week 5, physical visitation to solicit payments.

Week 6, temporarily suspend services to force customers to the negotiation table.

Week 7, offer payment plans to recover parts of debts rather than losing all.

3. Organisation should offer rewards for on time payment and effectively communicate this to customers. This rewards could be in d form of cash discounts or just year-end appreciations for good business.

4. In extreme situations especially for very large receivables, organisation can get the services of a solicitor to write 'FINAL DEMAND NOTICES' to debtors. Sometimes, letters from a solicitor might be all you need to effect payments.

5. The receivables could be cashed out. That is, the receivables could be sold to a factoring agency at a reduce amount. It is beta to claim some than to look all.

In conclusion, the risk of bad debts cannot be wished away. However it can be managed through innovation and commitments to chase debt.

Owners of small businesses need to come to terms that business is not a one- way, win-win situation. Sometimes the clouds will come (we cannot stop this), what we can do is have our umbrellas in place to mitigates the effects of d rains.


http://www.virtualaccountant.ng/how-smes-can-reduce-bad-debts/

Below are some of the type of taxes in Nigeria especially for small companies. Kindly contact us via info@virtualaccountant.ng or whatsapp +234(0)8029753761 or Call +234(0) 08086108687. You can also see our website: www.virtualaccountant.ng

1.VAT

VAT is a tax on consumption. It is charged on Revenue earned and paid to the FIRS. It is at the rate of 5%. However VAT is not to be charged on reimbursement. Failure to pay VAT will attract interest and penalties at 21% and 15% respectively. Please note that filing VAT is a monthly obligation and it is expected to be done on or before 21st of the month subsequent to the month of transaction. Failure to file the returns will mean a penalty for every month of default cumulatively.

2.Withholding tax (WHT)

This is a tax on contract jobs. It is deducted from your expenses and remitted to the relevant tax authority. For example, if MTN has a contract with your company, at the point of payment, you will deduct 10% (5% for an enterprise) from their payment and remit to either FIRS (for companies) or State IRS (Individuals and Companies). The rate for rent is 10%. The WHT is an advance payment of Tax.
If you work for government agencies, they will deduct both VAT and WHT from your payment. Failure to deduct WHT will attract penalties and interest as well.

3.PAYE TAX

This is to be deducted from employee pay and remitted on or before 10days after payment of employees’ salary. Failure to pay as at when due will attract interest and penalties. Please note that interest and penalties are subject to CBN’s pronouncement and could vary from time to time.

4.BUSINESS TAXES

This is the income tax on the enterprise itself. It is to be computed yearly and paid on or before 6months after year end of the business. Failure to file the returns will attract NGN 25,000 on the first month of default and NGN 5,000 on subsequent months.

However with VAIDS which will end on 31st March 2018, the penalties can be dropped while the compliance is kept to date.

We can assist you on this by Ensuring that proper accounting records are kept, financial statement is prepared and filed with the relevant authority. We can as well advice you on how to structure your invoice and reduce possible tax liabilities. Please note that every finance decision has a tax implication.

Source: http://www.virtualaccountant.ng/some-types-of-taxes-in-nigeria/

TYPES OF TAXES IN NIGERIA AND THEIR PENALTIES

1.VAT

VAT is a tax on consumption. It is charged on Revenue earned and paid to the FIRS. It is at the rate of 5%. However VAT is not to be charged on reimbursement.
Failure to pay VAT will attract interest and penalties at 21% and 15% respectively. Please note that filing VAT is a monthly Obligation and it is expected to be done on or before 21st of the month subsequent to the month of transaction. Failure to file the returns will mean a penalty for every month of default cumulatively.

2.Withholding tax (WHT)

This is a tax on contract jobs. It is deducted from your expenses and remitted to the relevant tax authority. For example, if MTN has a contract with your company, at
the point of payment, you will deduct 10% (5% for an enterprise) from their payment and remit to either FIRS (for companies) or State IRS (Individuals and Companies). The rate for rent is 10%. The WHT is an advance payment of Tax.

If you work for government agencies, they will deduct both VAT and WHT from your payment. Failure to deduct WHT will attract penalties and interest as well.

3.PAYE TAX

This is to be deducted from employee pay and remitted on or before 10days after payment of employees’ salary. Failure to pay as at when due will attract interest and penalties. Please note that interest and penalties are subject to CBN’s pronouncement and could vary from time to time.

4.BUSINESS PAYE

This is the income tax on the enterprise itself. It is to be computed yearly and paid on or before 6months after year end of the business. Failure to file the returns will attract NGN 25,000 on the first month of default and NGN 5,000 on subsequent months.

However with VAIDS which will end on 31st March 2018, the penalties can be dropped while the compliance is kept to date.

We can assist you on this by Ensuring that proper accounting records are kept, financial statement is prepared and filed with the relevant authority. We can as well advice you on how to structure your invoice and reduce possible tax liabilities. Please note that every finance decision has a tax implication. Kindly get back to us for further clarification.

We are here to support you if you or someone you know need a tax consultant or accountant.

Cheers!

Sirjamo:
One of their mugus

Not exactly. He really worked hard/smart. Think deep this time.

He worked hard/smart

The cameraman should be blamed.

Cheatnotagain:
Arik's issue has lingered for a while now but I think the company is putting a lot of efforts to get these issues resolved. I had a cancelled flight with Arik in November - 2016 but was refunded, December - 2017

Putting a lot of efforts? Really? One year for refund and you say effort. We must have different meaning of effort! My flight was cancelled on 2nd January 2018 from Benin to Abuja, 3.30pm. I needed to be in Abuja that day as I'd plans early the next day. I had to take the bus and didn't get to Abuja till 1am. You can only imagine the stress I went through just because they didn't deem it fit to send text that the flight would be cancelled. Sent a mail for refund, till now, no acknowledgement of my email. When I tried asking their customer care at the airport for my refund, she said, "why not just use it next time you're flying, it's open for a year!!!" I concluded I will never get that refund, I'll just wait till I'm stranded to use the ticket.
They can add my 37+k as part of their working capital.

They are not putting any efforts, at least I cannot see that.

I don't know which is worse, the flight, customer care or Nigeria!

Modified - First Nation seem to know what they're doing. I'll recommend them. They are prompt and professional. I've used them just once and I was pleased.

Powerful Men of God!!!

Happy Sunday from all of us at virtualaccountant.ng

You do not need to run if you're doing the right things. It's never to late to start.

We can help you with all your finance and tax compliance functions at affordable fees. Contact us today.

Happy Weekend.

lifestyle1:


Hi. Good morning.

Is it possible to use another company's TIN to file tax returns for another company ?

If not, what's the implication of doing so ?

Thanks

It's not advisable to do it. TIN identifies a company and every correspondence is kept in the file of the company. You will indirectly be paying the taxes of the company that owns the TIN.

Why not process your TIN and file in your name? It's less complicated that way and safer too.

Let's help you develop a system to streamline your bookkeeping for easier management and control at an affordable price.. contect us today 08186108687 or 08029753761... website www.virtualAccountant.ng

January is a compliance month. Don't be found wanting. Contact us for all filings and financial statements preparation.

Our fees are affordable and professional quality is guaranteed!

FetchUK:
How easy is it to pay tax without monthly tax returns. Paying every month is very tedious, would have loved quarterly, bi annual or yearly.

Fees for monthly filing through an accountant is exorbitant like having another employee on the payroll. What can I do please?

We charge as low as 10k per month.

Unfortunately there's little you can do about the monthly filing of returns. Some returns are mandatory for filing on a monthly basis while others are annual. The system doesn't have any provision for quarterly or no annual.

Please speak with us today let us take the burden off your shoulders without breaking your bank.

As you plan for the new year remember to have a good financial budget.

You either take a cue from the attached or you contact Virtual Accountant for your affordable financial and accounting advice.

Priorities your options. Focus more attention on the most important things. Remember the 20/80 rule?

Cheers!

agadez007:

We ve already had one

Virginia Etiaba of Anambra state

Oh! Great!!! The second then. Thank you.

Now we have the first female governor in the east!!!

Congratulations dear!

This is not unconnected to the harsh business environment. Alot of people have reduced from carrying 2 or more phones/simcard to just 1.

We do not anticipate any improvement in the near future. Sad realities.




www.virtualaccountant.ng

Why is the Tree lean

Explorers:
The Man Who was Wrongfully Convicted for Fatally Poisoning His 7 Children.





James Richardson is healing, but it's a long, long process.


The 77-year-old Florida man recently returned to his hometown of Arcadia, where in 1967 he was wrongfully convicted and imprisoned for the poisoning deaths of his seven children.


He spent 21 years locked up for the heinous crime, his children died from lunches laced with pesticide after being framed by authorities and alleged by prosecutors to have killed his young for insurance money.



Years later, the woman who had been babysitting Richardson's children while he and his wife were away working confessed to the crime, so Richardson was freed from prison.

This must be really traumatic; dealing with the loss of 7 children then false conviction.

I once watched a movie - Conviction. Still my best movie till date. A little boy was wrongly convicted for killing a neighbor, he had served 18yrs till his sister decided to go to study law and revisit the case herself using DNA evidence. He was eventually freed.

moscobabs:
My wife got her job while she was 2 weeks pregnant, but the HR and her boss didnt know untill one day he asked my wife out and the woman told him she's married and even pregnant, According to her the man just opened her mouth and said ''if he knew he wouldnt have employed her

There was no medical screening as part of the recruitment process?

Hello Small Business Entrepreneur,

Happy new month to you and yours

I hope your business has faired well in 2017 and you can boast of a good bottom line. Generally business performance across the country quite picked up this year with the intervention by the government to mitigate the rise in foreign exchange.

Anyways, as a business entity, how have you been keeping track of your business performance. Revenue and expenses alike, value added and operations. If you have been unable to maintain good accounting records which is essential to ascertain performance, December is a good time to do so as the year rounds up, especially for businesses with December as their financial year end. You do not need to wait till January to kick off a resolution of keep proper financial records and accounts.

That said, we at VirtualAccountant.ng as part of our vision to support small businesses will be posting useful tips of the activities you can do in this month to sort your records and ascertain your performance for the year.

In the same breath, we are available at the other end of the line 08086108687 if you'd like to outsource your bookkeeping, accounting and tax compliance functions of your start-up/small/medium sized business. Any kind of small business is welcomed. Also look up our website www.VirtualAccountant.ng for a better picture of who we are and what we do.



Watch this space!

Cheers!

Congratulations!!!

TANTUMERGO007:
Who university of Benin help?



Useless school

It's either you didn't get the admission or you got admission and refused to read and you failed.

Sorry about your loss bro.

Australia is calling....

designVATExcel:


Sorry to disturb again. Please how can one file VAT online? The link at http://www.jtb.gov.ng ain't working.

It's quite stressful and hardly any time sef to visit FIRS monthly simply to pay tax.
Thanks in advance

Access is not automatic. You will need to write a letter to your tax office to grant you access. Please visit your tax office for direction.

Another option is to pay us a low as 10k monthly to help you file.

Bless you.

Did you know that your VAT returns is made easy with Virtual Accountant? All you need to do is set up your tax rate and check the VAT inclusive button for your purchase or sales invoices.

At month end go to reports to generate your VAT returns which will give details of your input, output and net payable or claimable. Visit virtualaccountant.ng to let us show you how.

bhankymyk:
how do u calculate d amt of tax of a company or the percentage rate of tax

For a limited company, tax rate is 30% of taxable income/profit. Taxable income/profit is derived from accounting profit after deducting non taxable income and adding non allowable expenses. These are accounting jargons and you may need an Accountant to help you with the calculations.

For a sole proprietorship, the rate ranges from 7-24% of income, depending on the income band. Usually the highest rate is 18.96%. Again, you may need an Accountant to assist with the calculations.

Regards.

DonTim1:
please can someone help with this.

say i run a company and in the whole year, i only did a single business that does not involve buying and selling, simply just provision of 'not quantifiable' service, say SW dev.

what amount of tax am i to pay to firs?, especially if in my invoice to the serviced coy, i demanded 5% tax.

I assume the 5% you demanded is VAT. Please note that VAT is not your tax but the tax your customers are paying to the federal government because you added value to them. You're only a collection agent of the government.

To determine how much tax you're liable for, you will need a tax consultant who will help you do a calculation. Again the percentage of tax you'll pay depends on your kind of business.

Cheers!

starchris:

Please I have an online firm and I do business with people mostly outside Nigeria. Please who will will I pay tax to?

The authority you pay to depends on what business you registered, either a limited company or sole proprietor. If limited company, then you ought to pay to federal government (except your employees tax which payable to their states of residence.). For sole proprietorship, you pay all taxes to your state of residence except VAT.

Cheers!

masties2:
Op, so the VAT that is collected on service is expected to be remitted to FIRS? for a new company is there a tax break? Or we start paying as soon as we start business?

There is tax break for companies that have pioneer status (just google to know more). Others have breaks only when they make loss in the first four years. The break apply to Company Income tax and not to other taxes.

Contact us for more details.