Helping others should be the simplest thing in the world, but the truth is there’s a lot more red tape than you might expect. You’re just trying to run a community project, but then you’re told you need to register as an NPO, but everyone’s calling you an NGO, your accountant says it might help to become an NPC and your donors are asking if you’re a PBO. 

So, what’s the difference? And what’s the right choice for your philanthropic endeavours?

Across the country, tens of thousands of groups run feeding schemes, environmental projects, schools, clinics, and training centres, often built on passion rather than profit.

But while “NGO” is the word most people use, it’s not actually a legal term in South Africa. Entrepreneurs who fund or collaborate with non-profits need to know what each term really means, because it affects compliance, governance, and whether your donation qualifies for a tax deduction.

Alphabet soup: What does it all mean?

What’s the point of registering?

Many groups, particularly small ones, will run perfectly well without registering. Registering does, however, bring a number of real advantages.

• It shows funders and partners that the organisation is credible and accountable.
• It lets the operators open a business bank account in the organisation’s name.
• It qualifies the organisation for funding from government, corporates, and the National Lotteries Commission.
• It’s the first step toward tax exemption.

Any entrepreneurs working with or donating to a cause should always ask for proof of registration as an NPO or NPC.

When does “non-profit” mean tax-free?

Here’s where many people get caught out. Just because an organisation is registered as an NPO doesn’t mean they are automatically exempt from tax. To enjoy tax benefits, like exemption from income tax and giving donors section 18A certificates, the organisation must also apply to SARS for Public Benefit Organisation (PBO) status. (Being granted Section 18A status requires a separate approval on top of PBO status.)

That approval comes with conditions: funds must only be used for approved public-benefit activities, and annual returns must be filed. PBO status will always make an organisation more attractive to donors because their contributions can now become tax-deductible and exempt from donations tax.

How do finances and reporting work?

While this might sound like a lot of admin, it protects both sides. Donors get transparency, and the organisation builds a track record for future funding.

Finding time to relax is difficult in today’s fast-paced business world. Taking leave over the holidays may seem like a luxury, a weakness, or even an impossibility. In actual fact, rest and relaxation (R&R) over the holiday season is crucial to enhancing your team’s productivity, creativity, and decision-making in the new year. Find out here why R&R boosts business performance and how to encourage your team to make the most of their annual leave.

By prioritising rest and relaxation (R&R) over the holidays, businesses can cultivate a healthier, more productive, and more resilient workforce – which ultimately leads to sustained high performance. Here’s why R&R matters for your business performance… And how to help your team make the most of their December break.

6 ways R&R boosts business performance

1. Prevents costly burnout. Chronic stress leads to burnout, which dramatically decreases performance and increases employee turnover. Regular rest maintains sustainable energy and enthusiasm, protecting your investment in talent.
2. Unlocks creativity and innovation. Downtime allows your subconscious mind to process information and make new connections. Those breakthrough ideas rarely happen amid non-stop meetings and deadlines but rather emerge when your brain has space to wander.
3. Sharpens decision-making. Fatigue impairs cognitive function. Rested leaders and employees analyse situations more clearly, weigh options more effectively, and make sound strategic decisions that move the business forward.
4. Increases productivity and focus. Paradoxically, working non-stop decreases productivity. Taking breaks recharges the brain, improving concentration and efficiency. Research shows that the busier people are, the less creative they become.
5. Enhances problem-solving. Stepping away from a challenge provides fresh perspective. You’ll often return with quicker, more effective solutions than if you’d powered through.
6. Improves team communication. When people are tired or stressed, communication suffers. Rest enhances the ability to listen attentively, express ideas clearly, and avoid conflicts caused by fatigue-driven reactions.

How to maximise your team’s December leave

With the December holidays in a few days, now is the ideal time to encourage your team to make the most of the leave days. A good starting point is to ensure your team knows that taking leave is essential: some people need permission to step away from their responsibilities. Also encourage complete disconnection during leave days, reminding your team members that effective rest means genuinely disengaging from work and doing whatever their heart desires, be that hiking the Otter Trail, spending time with the family or embarking on a DIY project.

To reduce anxiety about taking time off and allow everyone to truly switch off when they’re on leave, you need to plan ahead. Work with your team now to establish clear out-of-office dates, handover protocols, and emergency contacts. And ensure projects are covered and clients are informed long before the holidays begin. Finally, remember to lead by example – when managers and business owners take their own breaks and visibly disconnect, it gives everyone else permission to do the same.

Whatever your line of work, moving from solo-business or freelancer to taking on staff is a big choice usually prompted by steady demand you can’t handle on your own. Taking on staff is about much more than finding an extra pair of hands, though. It also means committing to monthly salaries, tax deductions, UIF payments, and legal paperwork. So when should you take the plunge, and just how do you go about doing it? Our guide will help.

Faced with rising demand, every successful solo-business person or freelancer will start wishing they had someone around who could help. But deciding to hire means planning for ongoing salary costs, statutory contributions, written contracts and record-keeping. Do it deliberately, with preparation and you will gain capacity and potentially, increased profit. Do it without preparation and you can pick up expensive legal and tax problems.

When’s the right time?

First, make a list of tasks you believe you could hand over. Then look for areas that could be improved if you had someone to help with them. For example, if admin, scheduling or basic service work is stopping you from completing billable hours, then that’s a clear sign that something needs to change. You may want to consider hiring if you find yourself regularly turning away clients, or when your quality slips because you are over-stretched. You should also consider whether you have a steady pipeline that has areas of potential growth. If the need is temporary, a contractor might be a better bet.

Taking that next step

If you have decided to hire, then the next step is calculating just how much you can afford to pay. A salary is not just the monthly wage. You need to include a budget for additional costs you may need to carry, like equipment, training and the chance that the hire won’t be productive from the outset.

Who to hire first

When choosing who to hire, you should closely examine just where you’re getting stuck and then look for an employee who removes the biggest bottleneck. Common first hires include an administrative assistant to help with invoicing, scheduling and emails and a junior specialist or apprentice who can do the routine parts of your core service.  Your job advert should cover that bottleneck and list the main tasks and skills required. You should avoid the temptation of writing vague or overloaded job descriptions in the hope of finding a jack-of-all-trades. While these people may exist, they won’t be looking at entry-level jobs.

Key registrations as an employer

Before the first payday, you will need to register as an employer with SARS so you can withhold PAYE (pay-as-you-earn) tax.

You will also need to register with:

• The UIF (Unemployment Insurance Fund) where both employers and employees contribute 1% of pay
• The Compensation Fund (COIDA), which covers workplace injuries
• If your annual payroll exceeds R500,000 you must register for and pay the Skills Development Levy (SDL) – 1% of payroll

After that, you should set up your payroll processes as these need to be in place before the first pay run. Payroll mistakes are common and costly and your accountant (that’s us) can help you to set these up correctly.

Contracts and labour law basics

Every employee should ideally have a written contract that sets out salary, hours, duties, leave and notice period. Even small, first-time employers must follow The Basic Conditions of Employment Act (which sets minimums for working hours, leave, and overtime) and the Labour Relations Act, which governs fair dismissal procedures and dispute resolution. If you need help, ask us.

Tax obligations and paperwork

As an employer you must deduct PAYE from salaries and submit monthly EMP201 returns to SARS, pay your share of UIF and submit monthly UIF returns, pay SDL if you meet the threshold and submit the relevant returns, issue IRP5s to employees at year-end and reconcile with SARS (EMP501). While this may sound like a lot, as your accountants, we are here to help with it all.

Legal structures

Now might also be the time to restructure the way you do business. A sole proprietor can hire staff, but you remain personally liable for the business and any mistakes your employees make can become a very real and very personal problem. A private company (Pty) Ltd meanwhile separates business liabilities from personal assets and may be a sensible step once turnover and payroll grow. You can register a company with CIPC if you want that separation. Other options include a partnership and a trust. Not sure which to choose? Ask us.

To offer taxpayers a way to settle outstanding tax debt swiftly and to regularise their tax affairs on more favourable terms, SARS has launched an expedited tax debt compromise process. Applications are only open until 31 December 2025, however, so find out here how we can assist your business to take advantage of this very welcome relief.

Acknowledging that taxpayers often find it difficult to settle tax debt due to financial challenges, SARS has launched an expedited debt compromise process to help eligible taxpayers settle outstanding tax debts swiftly and on more favourable terms. The normal debt compromise process remains available to all taxpayers, and learnings from this expedited process will be used to enhance the broader system.

What is a debt compromise?

A compromise is a written agreement between SARS and a taxpayer in which SARS agrees to accept a reduced amount as full and final settlement of a tax debt. Once the taxpayer pays the agreed amount and complies with the terms, SARS waives the balance of the debt. However, if the taxpayer defaults or fails to remain compliant, SARS can reinstate the full debt.

Expedited debt compromise eligibility criteria

• The process applies to non-disputed tax debts older than 12 months.
• You must be a client of a registered tax practitioner.
• Your tax returns must be up to date (even if payment is outstanding).
• The following exclusions apply: entities subject to specific legal processes (such as liquidations, estates, and business rescue cases), companies that are deregistered, cases subject to criminal investigation and audit, as well as cases within the write-off process, taxpayers who have had a compromise in the past three years, and taxpayers who have the means to pay but refuse to do so.

Submission requirements

Taxpayers applying for the expedited tax debt compromise process must provide comprehensive relevant supporting documentation with their applications, which must be submitted by 31 December 2025.

These documents include:

• Latest Annual Financial Statements (not older than one year)
• Last six months’ bank statements
• Cashflow forecast for 12 months
• List of Assets and Liabilities at market value
• Debtors’ age analysis
• Details of any connected persons
• Details of assets disposed of in the last three years
• Disclosure of future or contingent interests in assets
• Details of assets under the taxpayer’s control (including through trusts)
• Current and projected income for the next three years
• Application letter with clear motivation, including the proposed settlement offer amount, and the source of funds to pay the offered amount
• Collection Information Statement (CIS) request with reasons and proof to compromise the debt.

It is important that disclosures are accurate – if they aren’t SARS might not even consider the application. SARS has committed to resolving qualifying applications within four weeks, using dedicated teams and enhanced workflow management. Approved compromise settlements may be paid either in full (once-off payment), or in instalments as agreed by SARS.

The end of the year is the perfect time to wrap up loose ends, assess your business’s performance, and prepare for a successful year ahead. This checklist is a fantastic start. But consider reaching out to us for a tailored checklist for your unique business needs. We’d love to help you tick all the boxes before the holidays rush in.

Can you believe November is upon us already? But instead of panicking about Christmas presents, it’s time to get strategic. The end of the year presents a crucial opportunity to settle outstanding matters, measure your business’s progress, and establish a strong foundation for a prosperous new year.  This checklist can help you achieve this before December rolls around.

Your 10-step checklist         

• Back up your data: Back up essential files including accounting documents, client information, and emails. It’s a good idea to keep at least one copy on the cloud and another copy offline on an external hard drive in a secure location.
• Stay on top of employee matters: Update all employee information as well as employee access and passwords to software programs and computer systems. Conduct constructive performance appraisals or feedback sessions and share rewards and recognition for notable contributions.
• Connect with your customers: Send festive season wishes and details of your holiday operating hours, and invite your customers to give feedback about your company. Add an out-of-office notification on all your communication channels with specific dates as well as an emergency number.
• Understand your financial position: Management accounts or reports like the income statement, balance sheet, and cash flow statement provide insight into the expense patterns, profit margins, revenue trends and financial health of your business, enabling informed decisions.
• Understand your tax position: Make sure you know your various tax obligations, liabilities and deadlines, and any tax deductions and credits you may qualify for before year-end.
• Review marketing and sales efforts: Evaluate which strategies worked, which didn’t, and why.
• Collect outstanding invoices: Get your December invoices out as early as possible and don’t let unpaid invoices carry over into the new year. Follow up on overdue payments now to boost cash flow and start fresh in January.
• Verify supplier information: Update your supplier database by confirming contact details, while also evaluating supplier relationships and negotiating better terms.
• Take stock: Take a physical inventory of all equipment, supplies and stock to better meet customer demand, identify any discrepancies in your records, prepare tax returns and insurance proposals, and effect necessary repairs, maintenance and upgrades. Set a specific day for the count, organise the space, record quantities, and calculate total value.

Audit your digital presence: Test every link on your website, check your contact forms, review your social media profiles and call your business number to ensure everything works.        

Trust Tax Season 2025 opened in September and SARS has already issued reminders to trustees that all trusts, including those that are not economically active, must file a tax return before 19 January 2026.  Read more here about the obligations SARS imposes on trusts and what’s changed this tax season – including the changes to the important flow through or conduit principle.

The official trust filing season for the 2025 year of assessment is now open for both provisional and non-provisional taxpayers – and SARS has issued stern warnings to trustees to fulfil their tax obligations. 

Who must file trust tax returns?
A trust is included under the definition of a “person” in terms of the ITA (Income Tax Act no.58 of 1962) and is therefore regarded as a taxpayer.  All South African trusts, including resident and non-resident trusts, that are registered for income tax, must file a tax return annually, even if the trust is not economically active.  A trustee is the representative taxpayer of a trust. Trustees or representatives must register the trust for income tax and file the required tax returns annually. Alternatively, a registered tax practitioner can be appointed as the representative taxpayer. 

What must be done?             
Taking into account recent changes to the legislation, trustees must submit their returns for the 2025 year of assessment and file the mandatory supporting documents listed further below. 

Recent legislative changes

• The “flow-through” principle is now limited to resident beneficiaries, so all amounts vested to non-resident beneficiaries are taxable in the hands of the trust. This also affects the submission requirements for provisional tax (IRP6).
• Foreign tax credits for taxes paid on income or capital gains earned in a foreign jurisdiction can now be used to prevent double taxation.
• From the 2025 tax year onwards, unused foreign tax credits will be carried forward automatically to the subsequent years of assessment, up to a maximum of six years.
• The Section 12H Learnership Agreement is extended to 31 March 2027.
• The definition of a trust is updated to include collective investment scheme portfolios.
• SARS has issued new rules on how losses relating to distributions are limited under section 25B.

Return submissions
The final deadline for the submission of provisional and non-provisional Trust Income Tax Returns (ITR12Ts) is 19 January 2026.

Mandatory supporting documents

Source: SARS

File on time!
Trustees and administrators should take note that all the return submissions and supporting documents are due by 19 January 2026 – just days into the new year.  Submitting within the deadlines is necessary to comply with SARS regulations. Late submissions can lead to administrative penalties, interest charges, and additional steps. 

What else must be done?
Because a trust is also a provisional taxpayer, trustees should be aware that a trust is further required to submit provisional tax returns (IRP6) twice a year in August and February.  In addition, trustees are also required to submit an IT3(t) third-party data return that provides details of amounts vested to beneficiaries.  Finally, all income derived from a trust must be declared by any resident beneficiaries of trusts in their own income tax returns. 

Looking ahead: Key tax dates for trusts

• 19 January 2026: Final deadline for provisional and non-provisional trust tax return (ITR12T) submissions.
• 28 February 2026: Second provisional tax payment for the 2026 assessment year.
• 31 August 2026: First provisional tax payment for the 2027 assessment year.
• September 2026 (date TBC): Opening date for Income Tax Returns for Trusts (ITR12T) submissions for 2026.
• 30 September 2026: Deadline for IT3(t) return submissions for trusts which declare amounts vested to beneficiaries’ income.
• 30 September 2026: Top-up provisional tax payment for the 2027 assessment year.

Consequences of non-compliance
SARS takes a zero-tolerance approach to taxpayers who do not register for the applicable tax, file tax returns, declare income accurately, or pay their tax debt.  Non-compliance with these obligations is a criminal offence and will attract penalties and interest.

Leading a business is time-consuming. There are myriad distractions vying to take your attention away from your core role of growing the business.  If you aren’t decisive and effective, you’ll soon be lumped with productivity bottlenecks that drain both personal energy and company momentum. Thankfully, we’ve got some time-saving strategies that can help you reclaim control of your schedule and focus on what matters most.

In business it’s too easy for an entrepreneur or business leader to mistake being busy for being effective. Working long hours with back-to-back meetings can look like productivity – but without clarity and boundaries, the important work, may not actually be getting done.  According to a study conducted by McKinsey, 61% of senior executives believe that at least half of the time they spend making decisions is unproductive. So how can you stop this happening to you?

Time-saving strategies are an essential tool for sustainable modern leadership. Streamlining processes, delegating effectively, and embracing automation can transform your day. Done right, these tactics free up energy for strategic thinking, innovation, and decision-making – all of which can lead to greater growth in your business. Here are some evidence-based tips every business leader should employ to better utilise their time.

1. Prioritise ruthlessly
   One of the most effective ways to save time is by focusing only on tasks that deliver real impact. The Eisenhower Matrix (dividing tasks into urgent vs. important) remains a powerful tool. Many leaders fall into the trap of handling urgent but low-value work, rather than carving out time for strategic priorities.  The fix? Review your to-do list daily and cut or delegate anything that doesn’t directly move the business forward. Treat your time as an investment portfolio and put more into the high-return opportunities.
   
   
2. Delegate with trust
   Effective delegation is a skill, not just because it frees up your time, but also because it empowers your team. Too many leaders hoard responsibilities out of habit or fear that standards won’t be met. But this can bottleneck workflows and burn time on details that others are capable of handling.  You should be clearly defining expectations, providing resources, and then stepping back. By learning to fully trust your team you free yourself up for higher-level thinking and decision-making. Just as importantly, you give staff room to grow, in the process increasing employee engagement and retention.
   
   
3. The algorithm is your friend
   Everyone’s talking about AI these days, and with good reason. Technology can be a business leader’s greatest ally. From scheduling tools to delivering automated reporting, letting technology take care of the smaller tasks can strip hours of repetitive labour from your week.  The upfront effort and cost of setting up automation pays dividends quickly. According to a Deloitte survey, businesses using automation in finance and operations reported time savings of between 60% and 80% in some high volume, transactional finance processes. As your accountant, we can help you adjust budgets to cater for tech upgrades and installations, and the adjusted workflows that will surely follow. Leaders who resist these tools risk drowning in avoidable admin.
   
   
4. Guard your calendar
   Your calendar is a reflection of your priorities. Yet many leaders allow it to be hijacked by endless meetings. A practical fix is to implement “meeting-free zones” (blocks of time reserved exclusively for deep work).  Another technique is the “two-pizza rule” made famous by Jeff Bezos: never hold a meeting if it requires more than two pizzas to feed the attendees. Meetings with fewer staff and clear agendas reduce wasted time and force clarity.
   
   
5. Communicate your way
   These days, business leaders are blessed with communication options. Tools like project management platforms, shared documents, and messaging systems mean you can allow communication to happen without the need for meetings or real-time interruptions. Allowing people to react to incoming information when they have space in their day lowers wasted time and increases focus. This helps everyone in the business, including you, to get more done.
   
   
6. Build decision-making frameworks
   Your job as a business leader is essentially to make decisions. The longer it takes you to make a decision, the more momentum is impeded. Structured decision-making frameworks (such as weighted scoring models) can help you speed up evaluations, reduce second-guessing and come to conclusions faster. This doesn’t just save you time, it also keeps others on track.
   
   
7. Invest in personal efficiency
   Leadership productivity is also about discipline. By simply changing some of the habits you’ve developed over a lifetime, you could immediately become more efficient. For example, you could answer your emails and phone notifications in batches instead of interrupting work to answer them as the notification comes in.  Introducing new habits and changing old ones will require daily diligence and repetition. Initially, it may seem draining, but over time you’ll find you are saving hours you can put to better use elsewhere.
   
   
8. Time as a strategic asset
   Leaders who learn to protect and optimise their schedules are the ones who build organisations that are sharper, faster, and more resilient.

Extending payment terms to 30, 60 or 90 days may feel like a smart business decision – but beneath the surface these terms could be draining your company more than you realise.  Read on to discover the many ways these “invisible loans to your clients” are hurting you. Then, learn how you can take back control.

Extending 30-, 60- or 90-day payment terms may seem like a simple trick to help your sales teams convert sales, smooth negotiations and boost customer service. What you may not recognise, though, is that those terms are not neutral commercial niceties – they are a form of credit.  When your business supplies goods or services today and accepts payment weeks or months later, it has effectively provided an unsecured loan to the buyer. That “invisible loan” has measurable costs: higher working-capital needs, lost interest income, distorted pricing decisions and elevated credit risk.

When you sell on extended terms, “accounts receivable” grows and cash on the balance sheet shrinks until the buyer pays. That increases days-sales-outstanding (DSO) and raises the working-capital requirement. If you borrow to cover the gap (common for seasonal businesses or those with tight margins) the interest paid on that borrowing is a direct cost of the terms you offered.  Even when you don’t borrow, the opportunity cost remains: cash not received cannot be used to reduce debt, invest in higher-return projects, or fund inventory when demand spikes. Over time the cumulative burden of routinely extended terms reduces agility and margins.

Unfortunately, many clients demand extended payment terms, and your competition may be prepared to accede to their wishes. So how do you ensure you keep the business without going out of business yourself?          

1. Price the finance
   Treat longer payment terms as a priced service. Build a transparent financing fee into orders that use 60- or 90-day terms, or publish two price lists: a net price for immediate payment and a financed price for deferred settlement. Customers accept explicit fees more readily than hidden margin increases, and your finance team can model return on capital precisely.
   
   
2. Offer structured early-payment incentives
   Instead of unconditional long payment terms, offer predictable early-payment discounts or dynamic discounting tied to actual payment date. A 0.5–1.0% discount for payment within 7–10 days often costs less than the buyer’s short-term borrowing and converts receivables into near-cash for you.
   
   
3. Underwrite and limit credit formally
   Move from ad-hoc allowances to formal credit applications and limits. Require a minimum credit assessment for extended terms, set credit lines tied to payment performance, and review limits at set intervals. For new or higher-risk customers, insist on shorter terms or staged delivery until a track record is established.
   
   
4. Design payment terms as part of commercial deals
   Make terms a negotiation item linked to value. Trade extended terms for commitments: volume guarantees, longer contract terms, staged milestones, or partial upfront payment. Where applicable, split deals into an upfront deposit and a deferred balance tied to delivery or performance to reduce unsecured exposure.
   
   
5. Use technology and supply-chain finance options
   Make payment easier with accurate, timely electronic invoicing, one-click payment links, and multiple payment methods. For larger B2B (business-to-business) accounts, consider invoice finance or supply-chain finance platforms. They enable buyers to settle invoices early and suppliers to access cash immediately, typically with transparent and lower financing costs than traditional receivables.
   
   
6. Make the invisible visible
   It’s essential to stop treating DSO as a passive metric and make extended terms a line item in cash-flow forecasting. Your accountant (that’s us!) can help you report the cost of terms monthly: financing cost, incremental bad-debt risk, and the foregone investment return on delayed cash. We can also supply a short finance note quantifying the cost and proposed mitigation (discount, guarantee, deposit).      
   
   

Up-to-date management accounts can track performance, reveal trends and highlight opportunities, ultimately enabling better decisions and stronger growth. Read on to find out what management accounts can tell you about your business and how you can use these insights to plan ahead, stay in control and ultimately improve your bottom line.

What are management accounts?       
Management accounts are a set of summarised financial reports. They’re similar to annual financial statements but they aren’t as formal, and they’re produced much more frequently – usually monthly or quarterly. They’re all about providing relevant financial data for informed business decision-making. As such, there’s no fixed format. Instead, management accounts should summarise and combine the financial reports you need to make smarter decisions. These financial reports might include some or all of the following.    

What can be included in management accounts?

What can management accounts tell you?

 The right set of management accounts can do more than record numbers – it can provide meaningful insights that help your business to perform better, plan ahead, and stay in control.

Climate change is real, and failing to prepare is guaranteed to have devastating consequences.  According to the World Economic Forum, climate-related risks are now ranked among the most severe global threats to business stability, and every business will need to take steps to minimise the impact. So, how can you prepare your business to not just survive, but thrive, in an increasingly unpredictable climate? Here are five practical approaches.

Climate change impacts the fundamentals of business operations. Rising heat affects productivity, floods and storms damage infrastructure, droughts disrupt supply chains, and new regulations increase compliance costs. Many leaders still believe their sector will be spared, but no industry is truly insulated. Just as one-third of startups fail because they never properly defined their target market, businesses that fail to assess climate risks may find their models undermined by forces beyond their control. The message is clear: failing to future-proof your business, will result in extremely hard times ahead.               

Start with the risks you’re facing
The first step is to identify which climate risks could most directly affect your operations.  These can be physical (think floods, wildfires, and extreme temperatures), or transitional, such as regulatory changes and shifts in customer expectations.According to the latest prediction models, South Africans can expect a hotter, more erratic climate with the country warming at about twice the global average. This means more very hot days that will hurt worker productivity and equipment reliability. On top of this, the country is also experiencing heavier downpours with increased flood damage. These damaging floods, such as those seen KwaZulu-Natal in April 2022 and the Western Cape in September 2023, will result in enormous insurance and economic losses and prolonged business disruption.

Despite the flooding, the country is also not in the clear when it comes to water stress. The 2015–2018 Cape Town “Day Zero” drought was devastating for car wash businesses but a boon for borehole drillers. Day Zero may have been avoided, but there will be more droughts in the future. All of these issues can lead to stock and agriculture failures, infrastructure collapse and process interruptions. A lack of water, for example, creates cleaning and hygiene issues as well as lower staff productivity. Insurers in SA have been reporting increasing weather losses and rising catastrophe claims, which will continue to feed through to higher premiums and excesses and tougher underwriting in high-risk zones. You can only build a realistic plan once you understand exactly where your exposures lie.          

Build a climate profile for your business       
Once you understand the risk categories, create a profile detailing how they intersect with your company. You need to consider your location, your sector, your suppliers and your employees. A warehouse on a floodplain carries different risks from a retail store in a heat-stressed city. Manufacturing firms may depend on inputs that are vulnerable to drought or fire, and employees may struggle in adverse weather conditions. Many exposures sit within the supply chain, where a small disruption upstream can ripple through global markets. For example, higher than usual temperatures may result in crops failing, or greater costs for HVAC and cold logistics services. Have you factored in these costs being passed on to your business? This profile should be updated regularly, as conditions, regulations, and technologies evolve and more is learnt about the severity of future weather patterns.

Segment your strategy
Not every part of your business will need the same response. While operations may require investments in resilient infrastructure or more efficient energy use, supply chains might need diversification or tighter contracts with suppliers to ensure continuity. Products and services may need to change as customers shift their preferences toward sustainable options. Segmenting your approach enables you to focus on the areas that matter most.

Use data to drive decisions    
Climate planning is most effective when it’s based on evidence rather than assumptions. It is vital that any planning you do is based on the data from climate models, insurance assessments, and financial analyses. Tracking information like rising temperatures, energy costs, and new compliance regulations will turn climate risk from an abstract concern into a measurable factor in your strategy. In South Africa, municipal climate plans are being adjusted to redraw floodplain rules and heat-safety requirements. Is your business going to even be compliant when they come in?

Talk to your stakeholders           
Your customers, employees, suppliers, and investors are able to offer different perspectives that could keep you ahead of any climate disasters. Customers can tell you what matters most in their purchasing decisions, employees may note practical changes to streamline daily operations and suppliers can share concerns that could highlight problems you had not foreseen. Talking to all of your stakeholders is more important than it’s ever been.