Building sound financial habits can make tax time more manageable for SMEs
Picture: iStock
With the tax filing deadline fast approaching, small and medium-sized enterprises (SMEs) are being urged to get their tax affairs in order, as leaving submissions until the last minute continues to create unnecessary pressure for many businesses. Non-provisional taxpayers have until 23 October 2026 to file returns, while provisional taxpayers have until 22 January 2027.
While tax compliance is a critical function of running a business, many SMEs still treat it as a reactive exercise, scrambling to meet deadlines instead of maintaining year-round compliance, a habit that can lead to costly mistakes, penalties and avoidable stress.
For SMEs navigating complex obligations and an uncertain economic environment, building sound financial habits throughout the year can make tax time more manageable and turn compliance into a source of stronger business insight.
Making tax preparation a regular exercise
The opportunity, says Xero, is for small business owners to move tax preparation from a once-a-year compliance exercise to a regular financial management discipline. Setting tax funds aside each month, including VAT and payroll-related taxes, is another important safeguard.
“Tax penalties and interest can be punitive on a business’s cash flow,” says Colin Timmis, regional director for EMEA at Xero. “Separating tax money from working capital can help businesses avoid an unexpected liability becoming a wider cash-flow problem.”
He highlights that technology can also support better habits ahead of the filing season. “Real-time financial data gives owners a clearer picture of what is coming in and going out of the business,” he says.
Tax compliance
Hendrik Wessels, partner at accounting firm Risen Advisory, says being compliant is not only about meeting the requirements of the South African Revenue Service (Sars).
“A business that is tax-ready throughout the year has better records, reporting and visibility over cash flow. That enables owners to identify issues earlier, plan with confidence and make better decisions.”
4 tips for SMEs
By treating tax preparation as a continuous business discipline rather than an annual deadline, small businesses can reduce stress, protect cash flow and create more time to focus on growth.
- Understand the basics: Know which taxes apply to your business, key compliance and payment dates, and any relevant allowances or incentives you qualify for.
- Set tax funds aside monthly: Keep the funds in a separate account from working capital so an unexpected bill doesn’t disrupt cash flow.
- Keep records organised to reduce the admin burden: Capture and store financial records as you go, using smart tools that read the data and organise it for you in your accounting software. Digital records make it faster to retrieve historical information for Sars or service providers.
- Review financials regularly: Monitor profit and loss, reconcile balance-sheet items such as loans, credit cards and debtors, and check cash flow and forecasts frequently.
