Merchant Accounts-Why You Need One

For years it’s seemed that while everyone acknowledges the importance of merchant account services, nobody except possibly merchant service providers- actually boldly talk about it. Part of this is because most bloggers hate to read on something they don’t really understand and are reluctant to comment.

If you are just trying to figure out the importance of merchant accounts, just read on you will find out the real reason why you really need it for your business.

Credit cards have become a preferred method of payment in today’s market, making a merchant account essential for any serious online entrepreneur. Sadly, however, too many websufers end up frustrated by the fact that they can not buy their favorite goodies online just because they don’t have a credit card. This is a feeling I personally had to deal with for a long time.

Undoubtedly, the banking and financial system world over has undergone a process of modernization and streamlining. The regulatory frameworks have been strengthened and dealings in the financial market are now facilitated by automated merchant services. Customers now enjoy ATM/Point of sale facilities from any ATM and merchant banks.

The evolution towards large financial conglomerates with integrated merchant banking service development is slowly blurring the hassle of queues in banks and delay in clearing of electronic payments. On the other hand more still needs to be done. The hassle of opening an account in the bank, with the demand of documentation involved and also the bureaucracy in financial institutions is also another challenge.

In this day and age, receiving payments online is of great importance to any online business. These benefits have made it easier for small businesses to grow and compete competitively with large organizations. Yet, the most common use of merchant services to date is customers using their credit card or debit cards in person to pay for goods and services.

I must mention that, accepting credit cards online is a risky proposition. Fraud rates are substantially higher when compared to traditional retail establishments. Nevertheless, a merchant account is an extremely flexible tool for those who are informed but like I said, you need to be more careful to determine which credit card processing solution is best for your business among the many merchant account choices available.

That is why sometimes choosing a third party merchant account provider like Google checkout is the obvious choice. A third party merchant account provider can give your business the ability to accept debit and credit cards in payment of goods and services in a matter of seconds eliminating the monthly fees. Interestingly, some merchant account providers do not charges any set up fee as well. The only time a merchant will incur a fee is when they accept payment via credit card.

With a credit card processing service on your website, you can increase your sales, flexibility and give your customers many payment options. Surely you have nothing to lose, and only time and money to gain.

Will Zambia’s Economic Zone tick like China?

Will the multi facility economic zones in Zambia enhance economic development in the manufacturing sector like in Beijing? Well, the success of the Zambian (SEZ) version is yet to be seen.

Indeed, one key characteristic of any developed economy is that its service sector is more productive than its manufacturing sector, Zambia is decidedly still a developing economy. The pressure has been to increase activities in the manufacturing sector, which calls for rapid improvement in infrastructure. Because the development of such facilities can not easily be achieved through a single initiative, the Zambian government has among other initiatives sanctioned the establishment of multi facility economic zones. This is quite commendable.

I guess this idea gained momentum after officials from the ministry of commerce and industry visited China and saw how well china’s special economic zones had been performing.

Out of curiosity, I did my own online research on special economic zones which I will share with you in a little while.

Special economic zones (SEZ) are not a new phenomenon, India was the first country in Asia to recognize the effectiveness of export processing zone (EFZ) model in promoting exports and in April 2000, India announced the special economic zones (SEZ) policy.

In comparison, I found out  that, there are numerous variations between china’s special economic zone model and that of Zambia. China has five very large zones strategically located near sea ports in the south east of the country, where as the Zambian government has so far declared two multi facility economic zones namely Chambishi multi facility economic zone and Lusaka south multi facility economic zone, and, while business incentives differ from zone to zone in China, the following standard incentives have been put in place to attract investors in the multi facility economic zones in Zambia.

Exemption from tax on dividends for five (5) years from first of declaration.

Corporate tax at zero percent for the first five (5) years from the first year profits are made; 

Zero percent tax rate on dividends of companies operating under the MFEZ/Priority sector for a period of five years from the year of first declaration of dividends;

Zero percent on profits made by companies operating in the MFEZ/Priority sector for a period of five years from the first year profits are made. From 6 to 8 years only 50 percent of the profits should be taxed and for years 9 and 10, 75 percent of profits should be taxed.

Zero percent import duty rate on raw materials, capital goods, machinery including trucks and specialized motor vehicles for five years for enterprises operating in MFEZ; and

Deferment of VAT on machinery and equipment including trucks and specialized motor vehicles imported for investment in the MFEZ/priority sector.

But the main deference I found, concerns land development, which is where this author anticipates a lot of criticism. In china, the state bought the land and built the infrastructure after which private companies in the export trade moved in to set up their industrial units. In Zambia the government has acquired sites and handed them over to the private sector to develop the required facilities. A similar model used by India.

In India, there was a rush to acquire property in the special economic zones but the sharp hike in the value of these sites after their development left the original owners feeling cheated and led to concerns that businesses were buying land in special economic zones to make profit on real estate rather than on manufacturing and exporting. 

The question that lingers on my mind is this, would these multi facility economic zones satisfy the investment/revenue criteria to compensate for the public money lost through the tax breaks would be investors would receive?

Zambia has matured into a democracy with full freedom of expression. The MMD government seems to be receptive to criticism. But frankly, the declarations of multi facility zones should include a cap of restrictions to address the fears of large scale displacement of local people and prevent businesses from developing in economic zones for profit on real estate alone rather than manufacturing and export.

A rapid advance in information and communication technology is helping to create new business models in the world today.  Manufacturing units are becoming dispersed, while functions such as planning, control and monitoring are being networked. Business process outsourcing is becoming the order of the day. Even research and development is being farmed out to take advantage of cost serving. There is a well known saying that, “men have learned to shoot without missing and birds have learned to fly without perching their wings.” Therefore, any country must take note of this paradigm shift in manufacturing before starting any schemes to develop industrial parks or multi facility economic zones.  

113 Accounting firms You Should Know

Do you search everywhere for firms offering accounting services in Zambia? Start looking in the right place for professional accounting firms. Today, I want to show you a list of 113 professional firms I recently stumbled upon. These firms provide accounting and audit services at a fee.

I will first start with the big four names in the accounting industry, these are members of the global network of the big4 accounting firms in the world before I move to the other 116 accounting firms.

Deloitte and Touché has offices on the second floor of Kafue house along chachacha road in Lusaka and their Kitwe office is at fookes house Pramo Avenue.

Pricewaterhouse coopers is among the big four accounting firms and has offices in Lusaka, Kitwe and Ndola. Their Lusaka office is on the 7^th floor NSCB building north end on Cairo road while the Kitwe office is at Mukuba pension house along President Avenue and their Ndola office is on the 4^th floor BOZ annex.

Ernest and Young is also ranked among the big4 accounting firms. They have offices in Zambia Located in Lusaka and Kitwe. Their Lusaka office is on 1^st floor Development house while their Kitwe offices 2^nd floor mukuba pension house at the corner of Kantanta Street and President Avenue.

KPMG is another global network off professional firms that provide audit, advisory and tax services in a number of countries. In Zambia, their offices are on Nkwanzi house along chachacha road in Lusaka, 2^nd floor Canada house along President Avenue in Ndola and on 1^st floor mutondo house in Kitwe.

Other accounting firms I know include Grant Thornton, Moores Roland, BDO Spencer steward Zambia situated at Bata boulevard show grounds and many more.

Here is the list of 113 professional accounting firms including 22 non audit practicing firms their telephone numbers and principle contact persons.

If your favorite accounting firm is not listed, feel free to let others know about it by leaving your comment.

MSEs Reporting Standard -Why Know it?

Few if any business owners take a keen interest in financial reporting standard matters. Do you know anything about the newly launched financial reporting standard for MSEs?

Recently, I had a conversation with a fellow accountant and it struck me that he was ignorant about this launch of the three tier financial reporting framework in Zambia. I think this is common nowadays as more business people are glued to social networks like facebook and political news.

The importance of understanding the purpose and scope of this financial reporting standard for micro and small enterprises (MSEs) is that it will give you a clear guidance on the accounting treatments suitable for MSEs doing business in Zambia.

Not too long ago, I wrote this post titled Why SMEs Need Standards. This was just a few months after ZICA announced that it was in a process of adopting the IFRS for SMEs. For more than half of us, the article might have been seen as a source with little or no importance. However, in the context of the new global economy, information more than ever is a critical resource and that we should be very active in seeking information.

Interestingly, according to the information I found on ZICA website, the effective date for full compliance with IFRS for SMEs and the financial reporting standard for MSEs is 1^st January 2012.The period from 1^st January 2011 to 31^st December 2011 is to facilitate transitional arrangements for preparing financial statements. Yet, only few if any micro and small business owners know something about the financial reporting standard for MSEs.

One notable point I got from the standard is that, if your business is out side the scope of the financial reporting standard for MSEs and you choose to use the standard, your financial statements shall not be described as resulting in fair presentation in accordance with the Zambian financial reporting frameworks.

A learned colleague of mine once taught me that ‘ignorance has no defense’ but the good part is that, this financial reporting standard for MSEs is available for download on the ZICA website. Download your copy today.

If you found this information helpful, don't hesitate to leave your comment.

The Most Critical Tax Issues in 2011

The goal of this article is to outline critical tax matters that made headlines in 2010 and stirred up debate on a number of tax policy issues in 2011.

Great thinkers have given wise counsel on the need to periodically look back at issues, to re look at our achievements, our shortcomings and then move forward with confidence.

For me 2011 has been, on the whole, the year of Gods favour. However, there’s been a pretty good deal of very critical tax issues this year; Frankly, there is way too much burning tax issues that made and will continue to make headlines this year.

Obviously, there is the fact that a number of countries are still not on track with addressing many relevant tax policy issues, especially the mining tax regime and tax payers trying to brace themselves with any tax changes.

Of course, there was this allegation of Mopani Copper Mines dodging taxes in Zambia and not too long ago, there was this story on Zambia watchdog which read "ZRA Probes Multinational Cotton Company over Tax Evasion". These are just some of the tax issues I can quickly recall that made headlines on the web, and I’m not including other issues like president Obama’s proposed income tax changes for 2011 which some of his critics termed as the ‘largest tax hikes in US history’, rather am limiting it to the tax matters facing our beloved country Zambia.

To my knowledge, there has not been any other comprehensive report on tax issues in the region recently but am aware that Action Aid last November released this critical report 'called calling time on tax avoidance’ which stirred up a lot of debate on a number of accounting practices by multinational companies that conceal the true value of their operations. Though companies like the brewing giant SABMiller refuted these allegations of tax avoidance.

I am writing this article, not with the intention of agreeing or disagreeing with the tax issues raised in this report but merely to contribute to the debate.

Many onlookers however have come to a wild conclusion that some tax policies have failed to achieve the intended objectives. If issues of dodging taxes, closure and asset stripping of companies at the expiration of tax incentive periods are any thing to go by, then this author, unfortunately, comes to the same conclusion.

Do you want to know more about tax policy issues? Then, i would recommend you get this compilation of selected papers on Taxation And Tax Policy Issues. It is not free but it’s worthy.

Make Money As a Software Reseller

Thinking about how to become an accounting software reseller? In this short article, we will not just look at what software reseller programs to join, but share ideas on how to thrive to make money by selling software amid the realities of low-margin in small business software sales.

Frankly, the days of being able to set up successful reseller business purely on the basis of re-selling accounting software is slowly fading away, but a few computer consultants I know, are still profiting handsomely from diversifying into new revenue streams such as installation, customization, training and ongoing service.

So, if you want to become a software reseller that focuses on small business accounting software, here is why becoming an accounting software reseller can be well worth the effort.

A reseller is free to choose and pick products

Your goal is to sell and make money. If a software product is not selling, you may choose to resell other products on the market. Every successful small business software reseller pays attention to new products but very mindful of the solutions that will work for his clients. This is the normal reseller role, you can add up small margins of profit.

As a Reseller you can provide technical support

Undeniably, most software developers look up to resellers to help provide technical support to customers they sell software to. As an accounting software reseller, you can set up your own forum to support the products you re-sell and develop a reputation of being knowledgeable about a specific application.

While some developers are hesitant to offer dealer prices for their products, there are always other developers who understand the critical roll resellers play in software sales and will be willing to establish workable reseller networks. This is more of a consulting role, you can charge for installation.
Software Resellers provide valuable training

A large number of companies usually have formal plans on software training for their accounting staff. Unfortunately, most small businesses rarely have this luxury. The only training they expect is from their software reseller. In fact consumers generally trust a resellers product recommendation. This is another stream of revenue.

In this short article, we have learned how to profit from being an accounting software reseller using other revenue streams. Be sure to leave your comment.

Where to Get Genuine Software Help

Today, I want to talk about accounting software help forums, and how you can almost always use them to get free and genuine help as an accountant.

As you probably know, a great way to achieve any goal in life is to look at people who already accomplished similar things, and then analyze how they did, learning as many lessons as possible

If you want to get the most from your accounting software, therefore, you should look for help from other software users that already are using it successfully, learning from their success story.

But where do you find other software users to help you with your problems?

That is where accountant software help forums come into play. Software help forums are a great place to start if you need accounting support. This is the only genuine place where software users can get help from other users. Many accountants already use help forums and more are moving into help forums every day. There you will find help from help desk staff, accountants and other experts.

One very good example is pastel software accountants help forum. Here you will find software discussion boards, users are free to discuss freely on this forum.

Admittedly, some of the software help offered in some help forums is not helpful, but i still find most software help forums to be very resourceful.

In fact, some of this help is given by very experienced professional accounting software experts willing to share their experiences and knowledge absolutely for free in order to help other users.

In other words, software help forums are a great source of information if you are willing to analyze a particular accounting program: the popularity, some of the problems users face and the amount of support provided online.

The big lesson I want you to learn is: wherever there is an accountant help forum, there is a genuine opportunity to learn and even help you get the most out of your accounting system.