Every transaction that involves money, whether income or expense, is a financial transaction. Processing these financial transaction is basically the process of sorting these transactions into categories to get a better picture of where income came from, and on what money was spent on.
This ultimately helps an accountant to establish how much TAX and VAT are payable, but also how much can be claimed back from TAX and VAT.
For businesses processing of financial transactions is an ongoing process, while this action is performed once, or twice (for provisional TAX payers) a year for individuals.
An important thing about financial transactions is to keep proof of these transactions. Upon assessment SARS may require supporting documents (proof) of transactions submitted. These proof are mainly invoices, but can also include credit card slips, contracts and bank statements.
We at Dynamitech uses Sage One for our customers’ financial transaction processing. The main benefit of Sage One is the fact that the programme is in the cloud, allowing customers and our accountants to work on transactions simultaneously. A customer who wishes to do their own processing, can do so while our accountants simply review, saving the customer money.