Archive for year: 2025

“Too many businesses only realise the value of intellectual capital when a key person leaves – or a competitor copies what they’ve built.” (Alicia Mendes, author of Futureproofing Through People)

In the rush to raise capital, improve profitability or streamline efficiency, business owners often miss what truly drives their success: the knowledge, relationships, and systems that power everything behind the scenes.

Whether you’re a one-person start-up or a growing enterprise, your intellectual capital is the secret key to your future triumphs. It is therefore vital that this intangible resource is protected before it vanishes. Doing so could be the most profitable decision you ever make.

Understanding intellectual capital

Intellectual capital is grouped into three categories: human capital (skills and experience), structural capital (systems, intellectual property (IP), databases) and relational capital (customer relationships, brand reputation and partnerships).

A recent study by Ocean Tomo revealed that intellectual capital now constitutes approximately 90% of the S&P 500’s market value – a significant increase from 68% in 1995. That includes patents, know-how, trade secrets, brand equity, and team knowledge.

With numbers like this, it’s absolutely essential that you audit your intellectual capital just as you would your balance sheet. What processes are unique to you? Who on your team holds key relationships or institutional memory? Are your best ideas captured anywhere, or do they leave when someone resigns?

Culture and contracts

You have to understand that your people are the carriers of knowledge. Their experience, relationships with clients, and systems know-how can be invaluable. Unless you plan carefully, when someone leaves they often take that intellectual capital with them.

Retention doesn’t just come from compensation. It comes from fostering a culture of recognition, curiosity, and inclusion. The 2023 Gallup “State of the Global Workplace Report” stated that, “employees who have had opportunities to learn and grow are 2.9 times more likely to be engaged.” It is therefore essential that you ask your accountant to make space in your budget for learning programs, and other leadership developing initiatives.

But culture alone isn’t enough. It’s important to also back up your culture with a legal framework that protects you. This includes NDAs (non-disclosure agreements), IP assignment agreements, and clear clauses in employment contracts covering confidentiality and ownership of work.

Capture knowledge before it walks

Most businesses operate through a web of undocumented processes from verbal know-how, to “we’ve always done it this way” workflows. That’s risky.

Developing internal playbooks, knowledge bases, and SOPs (standard operating procedures) is one of the most effective ways to turn intellectual capital into something transferrable and scalable.

Use tools like Notion, Confluence, or even simple shared drives to document repeatable knowledge. Then embed this into your onboarding and training cycles.

Nurture innovation and learning

Intellectual capital isn’t static. Like any asset, it can appreciate or depreciate. One of the best ways to nurture it is by creating space for learning, experimentation, and cross-pollination of ideas.

Encourage teams to attend industry events, run internal hackathons, and allocate budget to learning and development. Even better, reward creative problem-solving that moves the business forward.

Make intellectual capital part of your valuation

It’s vital that your intellectual capital becomes a cornerstone of your company valuation. Whether you’re pitching to investors, selling your business, or applying for funding, it’s important that you document your competitive advantages. Have you built a repeatable system others can’t match? Developed internal tools that boost efficiency? Retained staff with rare skills? All of this translates into value.

Only by showing how your business can thrive even if the best individuals leave, can you give future investors the knowledge they need to trust you.

Protect what really drives value

Tangible assets can be insured. Cash can be raised. But your intellectual capital requires conscious attention and care. Whether you’re building your first business or scaling your fifth, now is the time to treat your brainpower like the goldmine it is.

• 06 June – PAYE submissions and payments
• 25 June – VAT manual submissions and payments
• 27 June – Excise duty payments
• 30 June – VAT electronic submissions and payments, & CIT Provisional Tax payments where applicable.

“Trust the young people; trust this generation’s innovation. They’re making things, changing innovation every day.” (Jack Ma, Co-Founder Alibaba Group)

South African businesses are always looking for ways to foster growth and innovation while still reducing costs.

One way to achieve both is to employ young people. Young workers bring unique advantages that can transform your organisation. What’s more, the government subsidises part of the employment costs for qualifying young employees through SARS’ Employment Tax Incentive or ETI.

What young employees can bring to your business

• Tech savvy: More comfortable with new technologies, young employees can accelerate digital adoption in your business.
• Fresh perspectives: Young employees often introduce innovative approaches and creative solutions.
• Adaptability: Young people tend to be more flexible and better equipped to respond to sudden changes and unexpected circumstances.
• Fast learning: Fresh out of formal education, young people often learn more readily and are eager to apply their skills.
• Energy and enthusiasm: The energy and optimism of younger workers can positively impact team dynamics and workplace morale.
• Future-proofing: Young employees help businesses keep up to date with technological developments, emerging trends and the millennial and Gen Z markets.

How the ETI benefits local companies

The ETI makes it more cost-effective for companies to employ young people and to harness all the benefits mentioned above.

Essentially, this incentive subsidises part of your employment costs for qualifying young employees for two years. There is no limit to the number of qualifying employees that an employer can hire.

The young employees’ wages are paid by the employer in full, and the ETI is claimed by reducing the employer’s monthly Pay-As-You-Earn (PAYE) liability by the calculated ETI amount. This creates immediate positive effects on your cash flow.

It goes without saying that hiring more employees at a lower cost – and the boost of youthful energy they bring – will positively impact productivity and innovation in any company. Many South African businesses use the ETI to create a competitive advantage, build a talent pipeline for the future, and enhance their Corporate Social Responsibility credentials.

How the ETI works

* Adapted from SARS 

Common ETI pitfalls

• Claiming for non-qualifying employees
• Incorrectly calculating ETI amounts
• Failing to adjust claims after the 12-month threshold
• Not maintaining proper payroll records
• Overlooking the ‘monthly remuneration’ definition and required adjustments.

How professional assistance makes a difference

The ETI offers significant benefits, but it also comes with considerable compliance requirements and potential penalties for incorrect implementation.

Our team of experienced accountants and tax professionals stays up to date with the ever-changing regulations, uses professional systems to identify qualifying employees, accurately calculate claims, and keep proper records, and is ready to assist if any issues, compliance checks or audits arise.

In this way, we ensure your business can maximise the ETI benefits – and the benefits of having young employees – while minimising compliance risks.

Speak to us if you need help taking advantage of the ETI.

“When people are financially invested, they want a return. When people are emotionally invested, they want to contribute.” (Simon Sinek)

Employee engagement. It determines so much about the direction of a company, its staff productivity and how likely it is to succeed. According to a Gallup poll just 23% of South African employees are actively engaged, and the support offered by your company during difficult times is a key predictor of whether your employees are doing better or worse than that. Ignoring a personal crisis or mismanaging it can result in diminished trust, high turnover, and costly legal complications. On the other hand, getting it right can transform a tough moment into a team-building exercise that drives loyalty across your enterprise. Here are our five tips for handling an employee’s crisis with care, compassion, and professionalism.

1.  Listen without judgement

The first step in supporting someone through a crisis is simply to listen. Not all employees will be forthcoming, and many will fear repercussions or shame if they do share. By creating a psychologically safe environment where they feel heard and respected, you allow the conversation to unfold in a way that will allow you to help.

Listening does not mean solving. Ask what they need. Avoid overpromising or reacting too quickly. This is their experience, not yours, and your job is to provide space for them to express it.

2.  Tailor your support to the individual

There is no one-size-fits-all approach. While one employee might benefit from time off, another may prefer flexible hours or a change in responsibilities. Consider what reasonable accommodations can be made, in accordance with HR policies and employment laws. What’s important is that the support feels personal and meaningful, not generic or performative. You will likely want to speak to HR or, in a smaller business, ask for outside advice.

3.  Communicate clearly (and privately)

When an employee’s going through emotional turmoil, one of the most challenging aspects is managing the line between transparency and confidentiality. While you may need to inform certain stakeholders about changes in workflow or responsibilities, the nature of an employee’s crisis should never be discussed openly or speculated about in the office.

Establish clear, private channels of communication and check in regularly. Let the employee know what’s being shared and with whom – and always ask for their consent where appropriate. Trust is fragile and you need to protect it.

4.  Support your other employees too

It’s not just the employee in crisis who needs help – often their direct manager, or co-workers will also be feeling overwhelmed, overworked or unsure how to proceed. Offering management training on crisis response, mental health first aid, and compassionate communication can improve outcomes for everyone involved.
Managers are on the front line of employee wellbeing, and giving them the right tools helps avoid missteps that could escalate the situation.

5.  Make room in your budget for empathy

There’s no denying that crisis support can come with financial implications, from offering extra leave to making temporary hires to cover the missed workloads and even therapy for the staff member. But investing in your people always pays off in the long run. This is where your accountant becomes more than a numbers person.