Four months into the tax year, and if your business runs a standard March-to-February cycle, June has just closed. What follows is the first provisional tax deadline in August, and too many SMEs treat it as a frantic guessing game rather than what it should be: simple arithmetic, provided June is properly closed.
Reconcile now, and August becomes arithmetic instead of guesswork. Leave reconciliation until late July and you're forcing your finance function into reactive panic at exactly the moment you need clarity. A firm SOP for the month four close establishes a baseline of financial truth your accountant can actually work from.
Start by reconciling everything. Every bank, credit card and cheque account should be matched to the last Rand by the 7th of July, with no unallocated deposits left sitting in suspense. Financial analysis is only as good as the data underneath it.
Then analyse your margins. Check whether direct costs are creeping up, and if suppliers have raised prices, treat that as a trigger for a pricing review rather than something to absorb quietly. Review your EBITDA too, since it gives the clearest read on core operational profitability before accounting adjustments blur the picture.
Finally, review labour and overhead costs against the revenue they've generated. Four months is enough of a sample to see whether additional hires or excessive overtime are eating into your bottom line, and catching that now, rather than in December, gives you time to actually correct it.
Once June is locked, you have a genuine foundation to forecast the remaining eight months. If turnover is running 10% below budget, you can model recovery scenarios properly, whether that means adjusting sales targets, renegotiating supplier terms, or pausing planned capital spend. That's the real value of the close: not just a calmer August, but a platform for actual strategic decisions.
Without a month four close, August becomes a guessing exercise, and guessing produces one of two poor outcomes. Either you overpay SARS, handing over an interest-free loan while your business goes short on cash, or you underpay and face penalties and interest when your final assessment lands. Neither is necessary if the numbers are simply reconciled ahead of time.
Reconcile every account by 7 July. Bank, credit card and cheque accounts, zero unallocated deposits.
Review your gross margin and EBITDA. Trigger a pricing review if supplier costs have risen without a corresponding adjustment.
Check labour costs against revenue generated. Catch overtime or hiring creep now, not at year-end.
Build an eight-month forecast from the reconciled data. Use it to model real scenarios, not just meet the August deadline.
For a March-to-February financial year, it's the process of reconciling and reviewing financials up to the end of June, providing the baseline data for the August IRP6 submission.
A reconciled month four close gives you accurate data for forecasting the rest of the year, not just a defensible number to submit to SARS.
Yes. Reviewing your balance sheet and debtors ageing at month four identifies bottlenecks early, while there's still time to tighten collections or adjust pricing.
A disciplined month four close turns August from a scramble into arithmetic, and gives you real data to plan the rest of the year with. Reconcile now. For more on financial systems, see our blog.
Need expert tax and accounting support? The Compliance Clinic helps South African businesses stay compliant, reduce tax liabilities, and grow with confidence. Contact us today | View our services
A brief from the lead partner — what changed at SARS this month, one practice note, one decision-trigger to watch. Unsubscribe in one click.
