The Complete Guide to Bookkeeping in South Africa
A practical, SA-specific guide to bookkeeping — what it actually is, what the Companies Act and SARS expect of you, what it should cost, and how to use monthly numbers to make sharper decisions instead of just satisfying a filing deadline.
In a nutshell
Bookkeeping is the discipline of capturing, classifying and reconciling every financial event in the business — sales, purchases, bank movements, payroll, tax and inter-company entries — into a general ledger that can be trusted. In South Africa it sits at the base of a compliance stack that includes VAT201 to SARS, EMP201 and EMP501 for payroll, UIF to the Department of Labour, IRP6 provisional tax, ITR14 company tax, CIPC annual returns and the Beneficial Ownership register. Get bookkeeping right and every filing above it is straightforward; get it wrong and every filing above it inherits the error.
Who this applies to
- Every Pty (Ltd) — the Companies Act requires accounting records adequate to present the state of the company
- Every close corporation still on the register
- Sole proprietors above the personal tax threshold or claiming business expenses
- Any business VAT-registered or approaching the R2.3m compulsory registration threshold
- Employers running any payroll — PAYE, UIF, SDL and COIDA all trace back to bookkeeping
- Trusts, PBOs and estates required to produce annual financial statements
- Founders raising capital, applying for finance, or preparing for due diligence
What the law actually requires — section 28 of the Companies Act
Section 28 of the Companies Act 71 of 2008 obliges every company to keep accurate and complete accounting records in one of South Africa's official languages, at its registered office, for seven years. The records must be sufficient to enable the company to satisfy its reporting obligations, its tax and duty obligations, and allow an audit of financial statements. Non-compliance is a criminal offence for the responsible director. SARS section 29 of the Tax Administration Act layers a parallel five-year retention rule on top. In practice, bookkeeping is not an admin task — it is a statutory duty with personal director liability attached.
Cash basis or accrual basis — which one applies to you
Most SA sole proprietors and very small businesses run on the cash basis: revenue when the money arrives, expenses when they leave. VAT vendors on the invoice basis, all companies for income tax, and any business preparing IFRS or IFRS-for-SMEs financial statements must use the accrual basis: revenue when earned, expenses when incurred. Choosing correctly matters — a company that runs cash-basis books but files an accrual-basis ITR14 has a reconciliation problem waiting for the next SARS verification. We set the basis at onboarding based on entity type, VAT status and reporting needs.
Xero vs Sage vs Pastel vs QuickBooks — how to choose in 2026
Xero suits service businesses, professional practices and ecommerce sellers — clean UI, strong bank feeds across all SA banks, deep app ecosystem (Dext for receipts, Hubdoc, A2X, Stripe). Sage Business Cloud Accounting is stronger for businesses with heavier stock or projects and integrates cleanly into Sage Payroll. Pastel Partner still wins where inventory, manufacturing bills of material or long historical files matter, and remains the standard in many established SA firms. QuickBooks Online is often the choice for founders with offshore operations. Zoho Books is a genuine budget alternative for very small businesses inside the Zoho stack. There is no single 'best' — the right answer depends on your industry, your team and where the data needs to flow next.
What a proper SA month-end close looks like
Bank and card feeds are imported from FNB, Standard Bank, ABSA, Nedbank, Capitec, TymeBank, Investec, Bidvest and any merchant platform (Yoco, iKhokha, Payfast, Stripe, PayPal). Every transaction is coded to the correct GL account and, for VAT vendors, to the correct VAT rate — 15% standard, zero-rated, exempt or out of scope. Bank, card, loan, petty cash and merchant accounts reconcile to statement. Debtors and creditors ledgers are agreed to sub-ledger. VAT, PAYE and payroll clearing accounts are cleared. Fixed asset additions are journalised and depreciated. Directors' loan movements are tracked so IT3(b) deemed interest is not a year-end surprise. Only then are management accounts produced.
What bookkeeping actually costs in South Africa
Fees follow volume, complexity and whether VAT and payroll are in scope. Realistic ranges for 2026: a dormant Pty (Ltd) sits at around R300 per month for annual filings only. A trading business under R2.3 million turnover with no VAT and a small headcount is typically R2,500 per month. A VAT-registered business up to R12 million with payroll runs around R4,500 per month. Multi-entity groups, high-volume ecommerce, foreign currency operations and manufacturing are quoted individually. Anyone quoting under R1,000 per month for a live VAT vendor is either doing data entry without reconciliation or absorbing the risk into the price — which is not sustainable.
Bookkeeping, accounting and tax — who does what
Bookkeeping records and reconciles the transactions. Accounting builds the management accounts, annual financial statements under IFRS-for-SMEs, and interprets the numbers. Tax turns the same numbers into VAT201, EMP201, EMP501, IRP6, ITR14, ITR12 and the CIPC annual return with Beneficial Ownership. In smaller SA firms, the same practice covers all three layers on a fixed monthly fee. In larger groups they are often split — but the data flow between them still has to be seamless, or reconciliations break at year-end.
Onboarding — what we need to take over your books
For a Pty (Ltd): CIPC registration documents (CoR 14.3 or CoR 15.1A), the current MOI, SARS income tax number and tax clearance status, VAT101 confirmation if applicable, employer PAYE reference, prior-year signed AFS and the trial balance at take-on date, bank statements for the current open period, read-only access to your accounting software, and payroll master data (ID, employment contract, salary, benefits) for every employee. Most clients are fully live within 48 hours.
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