AOA Professional Services

Tag: MSME

  • 3 Ways To Leverage Digital Disruption

    3 Ways To Leverage Digital Disruption

    An intriguing update that shook the business waves at the start of the year was that Stanbic IBTC was closing down 50% of its physical branch in Nigeria solely because the bank wants to go fully digital as a step toward prioritising full-scale digital banking.

    Disruption is inevitable for every business and at some point, digital disruption will come for every organization regardless of size. Those who prepare for it will be flexible enough to thrive in a time of disruption, but the organization that overlooks it is surely handshaking exit as a business.

    1. Be Human-Centric

    No organization can exist without its’ people. Customers, investors, vendors, employees and a list of other persons affected by the operations of an organization are crucial to a business’s survival. Regardless of digital disruption, your people should come first. Technology being the centre point of digital disruption should be seen as an ENABLER of processes and not the process itself.

    Make your people the focus of every tool and strategy intended to drive disruption and not the other way round. Be sure that your chosen method of leveraging digital disruption solves the challenges of your people. That way, disruption is sure to foster business growth. But how do you do this? Check Number Two.

    2. Be Data Conscious

    In times of disruption, disregarding data is equal to failure. it is the foundation of every strategy and methodology to be used to control disruption to your business’ favour. Do not overlook even the smallest of data. Customer interaction, buyer journey, employee reactions, investor comments etc. are all sources of critical data essential to personalizing the experience of your people during a disruption.

    Be sure to be on top of trends as well as government policies. These too are avenues for micro-moments that shape how disruption can be adopted. Collecting and analyzing this data triggers your business for proper adoption.

    3. Automate

    Digital disruption is all about using technology to drive business processes. today we have different kinds of technology doing this. From Blockchain to Software-As-A-Service (SaaS), ERP Systems etc. They all have one thing in common, and that is to help us do business more efficiently and effectively.

    However, with digital disruption comes tonnes of activities and processes to be managed. There is no way direct human interaction can sufficiently deliver a worthwhile experience. Hence, automation becomes inevitable. Automating business processes such as Bookkeeping, HR, Payroll Management, Investor Relationship, Compliance etc. with tools like AOAHUB makes digital disruption the equity harnessed for your organizational growth.

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Teleconsulting Desk

  • Want A Successful Administrative Year? Consider these 4 things

    Want A Successful Administrative Year? Consider these 4 things

    The new year inspires renewed energy and excitement for what could happen. It’s a fresh start and the perfect time to reflect on the past and plan for the future – to set goals and figure out how to meet them. Even though Y2022 has begun, it’s not too late to kick things off rightly to help ensure growth for your business.

    Here are four things you must consider if you want a successful administrative year:

    1. Review Previous Year Performance

    Look back at the previous year. Assess what went well and what did not, and find takeaways from both. The mistakes and successes. Review your business plan and make updates. Quick posers to doing that: Were there big moves you wanted to make last year but did not? Did you want to expand your team? Expand your reach and presence? Take a hard look at where you’ve been, and perhaps where you wanted to go but could not, so you can better know where you should be heading.

    2. Build Projection

    Projections are a guide of two benefits – Roadmap & Motivation. As you develop projections for the year, consider the broader economic conditions and how they might impact your market. Of course, keep in mind that projections are guides. It’s impossible to know what will happen, so ground your projections in as much data and objectivity. Knowing the latest business trends and economic news will arm you to handle the constantly changing environment. Advisably, do this with research and preferably speak to a consultant who can bring experience and criticism that bolster what you have.

    3. Mind The Budget

    It can be difficult to keep track of all expenses, especially while juggling many areas of the business, but it’s crucial. Businesses can maximize kobo in numerous ways – from tracking tax-deductible, business expenses and minimizing long payment terms, to making monthly instead of annual insurance payments. Meanwhile, you must make smart decisions about your budget and not just about cost-cutting. Your budget is to make sure your spending fosters sustainable growth & development.

    As Benjamin Franklin rightly said:

    “Beware of little expenses. A small leak will sink a shop”.

    4. Improve on Communication & Feedback

    Effective communication is critical to business success. Encourage your employees, customers/clients & shareholders to share their thoughts about the past. Provide several ways they can communicate with you, from the regular team and one-on-one meetings to an online chat platform. Have an open-door policy and be open to receiving honest feedback and ideas. Set the tone for consistent and transparent communication. It will help you realize what needs to be improved and what is to be sustained. In addition, improved communication can help to define work-life balance for employees which in turn boosts productivity.

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Teleconsulting Desk

  • AfCFTA: The Need to Review Double Taxation Arrangement

    AfCFTA: The Need to Review Double Taxation Arrangement

    A Tax Treaty otherwise called an Avoidance of Double Taxation Agreement (ADTA) or Double Taxation Agreement (DTA) could be described as an agreement between two or more countries (otherwise known as the Contracting States or parties) to make sure that a resident of one or both of the contracting countries does not suffer from paying tax twice on the same income in both jurisdictions or unduly benefit from not paying appropriate taxes in any of the countries through tax evasion or avoidance. The Agreement covers taxes on income and capital only and does not extend to consumption taxes such as Value Added Tax or Sales Taxes.

    Over the last few decades, the number of bilateral tax treaties has increased dramatically. The United Nations Model Double Taxation Convention Between Developed and Developing Countries (“UN Model Convention”) and the Organisation for Economic Co-operation and Development’s Model Tax Convention on Income and on Capital2 (“OECD Model Convention”) provide models for countries to use in negotiating the terms of their treaties and are regularly updated. For purposes of both the UN and OECD Model Conventions, it is assumed that any rules for the application of the provisions of those Model Conventions are a matter for the domestic law of the contracting states. Consequently, there are no general rules in the Model Conventions or in the Commentaries concerning how the provisions of the treaty should be applied.

    Speaking at the launch of “Dangers of Double Tax Agreement in Financing Development: a case study in Ghana,” Mrs. Ofori-Kwafo said the report emphasized the need to adopt a harmonized DTA model, which would take into consideration diversities in the African economies.

    She said in view of that, Tax Justice Network Africa (TJNA), in collaboration with its members of South and Eastern Africa Trade Information and Negotiation Institute (SEATINI Uganda), Civil Society Legislative Advocacy Centre Nigeria (CISLAC), Ghana Integrity Initiative (GII), Policy Forum Tanzania and Centre for Trade Policy and Development (CTPD) Zambia with support from Open Society Foundation (OSF) had conducted a joint study on the Dangers of DTAs in Financing Development in Africa with case studies of Ghana, Nigeria, Tanzania, Uganda, and Zambia.

    In general, the tax authorities of a country should apply the provisions of its tax treaties to prevent tax avoidance and evasion. This requires careful consideration of the inclusion of anti-abuse rules in tax treaties and the adoption of domestic anti-avoidance rules that can be applied to treaty abuses. However, in addition to ensuring that the appropriate anti-avoidance rules are in place, the tax authorities must have the capacity to interpret, apply and enforce those rules concerning treaty abuses.

    Given the African Continental Free Trade Agreement (AfCFTA), there is, therefore, the need for a thorough review and renegotiation of the Double Taxation Agreement to resolve challenges regarding tax evasion and avoidance in the continent.

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Africa International Helpdesk

  • AfCFTA: Potentials & Challenges for MSMEs in Africa

    AfCFTA: Potentials & Challenges for MSMEs in Africa

    In 2018, 54 of the 55 countries that make up the African Union (AU) established the African Continental Free Trade Area (AfCFTA). It was created by the African Continental Free Trade Agreement to be a free trade area to fast-track economic development on the African Continent, especially through the small and medium-sized enterprises (SMEs).

    The AfCFTA has opened a $3.4 trillion borderless market created to present an opportunity and rekindle hopes for African recovery through trade in a post-Covid-19 world. As nations continue to battle a pandemic that does not respect national borders, the Intra-African trade is currently low at 14.4 percent of total African exports. The United Nations Conference on Trade and Development (UNCTAD) estimates that the AfCFTA could boost intra-African trade by about 33 percent and cut the continent’s trade deficit by 51 percent.

    The latest Economic Development report shows that about 34 percent of African households live below the international poverty line ($1.9 per day), and around 40 percent of the total wealth is owned by approximately 0.0001 percent of the continent’s population. Then the pandemic has exacerbated inequalities and vulnerabilities of marginalized groups, resulting in an additional 37 million people in sub-Saharan Africa living in extreme poverty.

    A key question is how economic growth through regional integration can contribute to poverty reduction, cut inequality, and foster inclusive development, which is the main objective of the African Union’s Agenda 2063. Reports have shown that the continent’s current untapped export potential amounts to $21.9 billion, equivalent to 43 percent of intra-African exports. An additional $9.2 billion of export potential can be realized through partial tariff liberalization under the AfCFTA over the next five years.

    So what are we saying here?

    • With the AfCFTA, the market potential is huge but there is an equally huge challenge, which is that of a wide poverty line in the continent.
    • MSMEs are at the centre of leveraging the potential of the market and also solving the problem of poverty through job creation.
    • MSMEs would also help reduce over-reliance on foreign goods while enhancing the production of locally made goods which would boost infrastructure within the African Continent.

    According to the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), SMEs in Nigeria account for about 96 percent of registered Nigerian businesses, employ about 75 percent of the national labour force, and contribute 48 percent to the country’s Gross Domestic Product (GDP). A 2020 survey of 1,804 MSMEs across Nigeria by the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) showed that more than 50 percent of those surveyed were most concerned about the threat posed by imported cheaper goods competing with local products due to the AfCFTA, while only 20 percent were aware of the existence of the AfCFTA.

    In conclusion, it’s not just policies and procedural shortcomings that have resulted in limited cross-border trade volumes in Africa. Medium Small and Middle-Scale Enterprises (MSMEs) and other stakeholders in Africa must look deeper into why intra-African trade has been slow to gain traction, leading to Africa’s ongoing heavy reliance on imports and taking advantage where necessary to grow their business and market share in Africa.

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Africa International Helpdesk

  • Brand & Branding

    Brand & Branding

    A Brand! What comes to mind when you read, see or interact with the term as an MSME? Is it your logo? Or the colours of your business? Well, for most business owners, it is as much as the posers while others believe it includes your website, social media presence, etc. But is that all that it is?

    It may interest you to know that a brand is far much more than the aforementioned. In fact, for the most part, a brand is more abstract than concrete. A brand of any business is about anything – physical or not – that distinguishes a business from another. Beyond all that has been mentioned above, it will include your culture, value, and even corporate positioning in the minds of every stakeholder in your business; not just your customers but also your employees, regulatory bodies, etc.

    In short, branding is the process of building a brand and honestly it revolves around everything you are as a business and it also influences your success or failure as an enterprise.

    For most MSMEs, the focus is usually on their actual product or service, and with this comes a tendency to neglect the importance of developing a branding image. Branding is a medium that helps you to sketch your image in the minds of your customers. It separates you from the other businesses in the industry, nation, and the whole world.

    Your business will see a significant development when it is deliberate about building a brand. What do people know about your business? Is the perception good or bad? Are you law-abiding? Can your business be trusted enough in any transaction? You can see that it is far bigger than just logos, colours, and websites?

    Revenue and growth are the focus of most MSMEs. How does branding impact these? The following statistics provide the answers.

    “Your brand is the single most important investment you can make in your business.“

    Steve Jobs

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Teleconsulting Desk

  • Outsourcing: What, Why & When?

    Outsourcing: What, Why & When?

    Every business – Small, Medium, or Large-sized – wants to grow. When the growth happens, it becomes the responsibility of the whole team to sustain the business’ competitive edge. Hence, the need to focus on strategic and technical competence arises while doing away with the company’s non-core functions.

    Here is where outsourcing comes into the picture. With plans to shape the future of business activities in place, keeping up with all the activities a company requires to exist internally takes up time, increases costs, impedes flexibility, efficiency, and performance,

    For most businesses, the best bet is to outsource some functions which are not core of their competence to profound professionals in a way that fosters productivity, reduces cost, and increases task delivery time as against having to do these tasks internally.

    According to Chuks Cohn – Founder & CEO of Varsity Tutors – businesses should outsource:

    • Tasks that are critical to operations but not a vital component of strategy such as Accounting, Tax Remittances, Talent Acquisition, etc.
    • Non-Core functions such as Digital Marketing, Website Development, Cleaning Services, etc.

    But when should you outsource some of your operational functions?

    Knowing when to outsource can provide the best results for your business. This is because using a vendor with the specialist skills that you do not have in your business can speed up delivery, ensure productivity, identify margin opportunities, and flag down risks. In turn, these help businesses focus on their competitive strengths and technical competence.

    Lydia Adams – Vice President, M&C Personiv – suggested that your business should outsource when you:

    • Need to lower costs.
    • Need to focus on your business-critical functions.
    • Need to free up time for strategic development.
    • Need to have profound professionals execute special tasks for the growth of your business such as due diligence, restructuring, business process improvement, etc.
    • The business is growing fast in terms of market share and demand just like the way Apple leverages outsourcing for efficiency.

    “If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business.”

    Lee Kuan Yew – Former Prime Minister of Singapore

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Teleconsulting Desk

  • How NOT To Micromanage

    How NOT To Micromanage

    MSME Managers must understand that running a small business involves so many different tasks and skills that as the business grows bigger, some sort of assistance and division of labour becomes necessary for the business to succeed. Yet a major factor to the success of every enterprise, big or small is how to harness the quality of employees at disposal for business growth.

    Micromanaging can be a stab in the back for most employees who want to give their best to the success of their organization. When you micromanage, you are telling your employee or subordinate that you do not trust their judgement, skills & expertise.

    The following statistics are staggering:

    When you consider these side effects of micromanaging, you see the bigger problem: employee turnover. According to Lewer Benefits, most MSMEs experience an average 15% – 25% employee turnover rate and Work Institute reported that replacing a good employee costs an organization 33% of the worker’s annual salary. Now picture the effect of that when the costs add up.

    So, how can managers and business owners NOT micromanage? Delegate! Yes, delegate effectively. The proper delegation will help eradicate even unintentional micromanagement. So, we expect you to ask; how do you delegate effectively? Let’s look at the following 9 tips recommended by Lauren Landry, an Associate Director at Harvard Business School:

    1. Know what to delegate.
    2. Play to your employees’ strengths and goals.
    3. Define the desired outcome of tasks assigned.
    4. Establish an effective communication channel.
    5. Provide the right resources and reporting level of authority.
    6. Give room for failure to encourage empowerment and a better approach to work.
    7. Be patient.
    8. Give feedback on work done be it constructive or positive. Feedback should however not be demeaning.
    9. Give credit where it’s due.

    While we could have elaborated more on the tips above but for the want of space and your precious time, we leave you with this thought from Brigette Hyacinth, a leading HR Influencer:

    “Micromanagement is a complete waste of everybody’s time. It sucks the life out of employees, fosters anxiety and creates a high-stress work environment. Select (i.e Hire) the right people and give them room to get on with the job.“

    DISCLAIMER:

    The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

    AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Teleconsulting Desk