Lehana Nel of Tax Solutions Namibia is a Saiba member whose accounting practice has blossomed during the Covid-19 lockdown, which will be lifted to Stage 4 – the “new normal” – on 30 June 2020.
She’s picked up a horde of new clients in recent weeks, most of them members of the Namibian farming community, so when the lockdown lifts on 30 June 2020 (other than hunting and accommodation),, the size of her accounting practice will have multiplied.
How did she do it? For the most part, word of mouth from satisfied clients. “When you’re a client of mine I do my utmost to keep your records up to date and get refunds from the Receiver of Revenue when they are due.”
But more than this she has become a trusted business advisor to her clients, which range from farmers to hunting lodges, small businesses and everything in between.
Farming is an inherently fickle business and prone to massive risks. For example, Namibia experienced a multi-year drought which ended last year, but it brought devastated on many farming areas.
Nel’s advice to clients was straight out of Business Management 101: diversify your sources of income. If you’re reliant on livestock only, even though conditions are now much improved, those conditions can change suddenly. You need multiple sources of income so that if one fails, there’s another source of revenue that can pick up the slack.
“Most of my new clients are farmers, so I’m excited about that, especially since they came to me by word of mouth after I helped other clients through this very difficult time. I explain to clients that I am their representative so I am equally liable. Farmers are realising that they have to expand out of cattle into other sources of income. If you are too invested in livestock only, you may struggle to pay the mortgage on the farm when conditions deteriorate, so I teach them that they need to make plans for years when the rains are not good, or when other hiccups appear – such as SA’s foot and mouth disease which broke out in 2019, or Covid-19. Namibia has been clear of foot and mouth since 1990, but we have to watch that we don’t import it across our borders.”
Farming conditions have improved dramatically in Namibia over the last year, helped by good rains. This is reflected in the price of weaners, which now sell for up to R35/kg as compared with about R13/kg in 2016. This has allowed farmers to rebuild their balance sheets and make up for some of the ground lost during the drought years.
Nel is assisting her clients to bullet-proof their businesses against any future calamity – such as Covid-19 – by beefing up their cash reserves and strengthening their balance sheets. And, of course, getting their tax affairs in order. The Namibian Receiver of Revenue is granting a waiver of penalties incentive for those who register for ITAS (Namibia’s efiling system) before the end of June 2020, and bring their tax records up to date.
“For those clients with penalties, this is a major boost to cash flow if we can get those penalties waived, so we have been working extremely hard to get their tax affairs up to date.”
Astonishingly, Namibia – with a population of about 2.5 million – has had no deaths from Covid-19 and only 31 confirmed cases. This means it will be returning to Stage 4 lockdown, the “new normal”, on 30 June 2020. The only exception to this is Walvis Bay, where two new cases of virus were detected within the last week, prompting the government to return the town to Stage 1 lockdown.
Nel says the rash of new clients she has picked up during the lockdown stands her in good stead when the country moves to Stage 4, though she is flat-out busy straightening out the accounting and tax needs of her existing clients to take advantage of the tax incentive expiring at the end of this month.
“I think for all accountants this has been probably the busiest time, and the most challenging, we have ever experienced. But there are rewards for all the hard work. Clients have come to realise how much they depend on us, and how vital we are to their survival and success. This is indeed the time when accountants have had to shine.
Lehana can be reached at email@example.com.