Clear definitions of key terms in accounting, finance, and business management for SMEs in Africa (SYSCOHADA, WCR, DSO...).
57 terms defined
The journal records each accounting transaction in chronological order. Subsidiary journals include: purchases, sales, bank, cash, and miscellaneous operations. Centralization in the general journal is mandatory.
Balance sheet assets are divided into fixed assets (long-term investments) and current assets (short-term items: inventory, receivables, cash). In SYSCOHADA, classes 2, 3, 4 and 5 compose the assets.
The balance sheet is one of the 4 mandatory financial statements in SYSCOHADA (along with Income Statement, TAFIRE and Notes). It consists of Assets (what the company owns) and Liabilities (how it is financed). The fundamental equation is: Assets = Liabilities + Equity.
Bank overdraft is an expensive short-term financing (high rates + overdraft commission). It should remain occasional and not become a structural way to finance working capital. In West Africa, overdraft rates are particularly high (15-20%).
Bank reconciliation identifies discrepancies between accounting and bank records: issued but uncashed checks, pending transfers, unrecorded bank fees. It is an essential internal control procedure, to be performed at least monthly.
Break-even date = (Break-even revenue / Annual revenue) × 365 days. The earlier the break-even date, the more profitable the company.
Break-even = Fixed Costs / Contribution Margin Ratio. It is an essential management tool for SMEs to know if the business is viable.
Cash flow measures the company's actual ability to generate liquidity. We distinguish operating cash flow (current activity), investing cash flow and financing cash flow. In West Africa, cash flow monitoring is critical because access to bank credit is limited and payment cycles are long.
The Cash Conversion Cycle (CCC) is the most comprehensive indicator of operating cash needs. A short CCC means the company quickly converts investments into cash. A negative CCC (rare) means the company is financed by its suppliers.
The chart of accounts structures accounts into classes: Class 1 (Capital), Class 2 (Fixed Assets), Class 3 (Inventory), Class 4 (Third Parties), Class 5 (Cash), Class 6 (Expenses), Class 7 (Revenue), Class 8 (Special Accounts).
CII is an e-invoice format developed by UN/CEFACT. It is the XML format embedded in Factur-X and ZUGFeRD. It is one of the 3 formats accepted by the PPF in France.
The clearance model is used in UEMOA countries. Unlike the post-audit model, it requires real-time pre-validation by the DGI before issuing the invoice to the customer.
Corporate tax is calculated on taxable income (accounting result adjusted for add-backs and deductions). Rates: France 25%, Ivory Coast 25%, Senegal 30%, Benin 30%, Burkina Faso 27.5%, Niger 30%. Quarterly installments are generally required.
Depreciation reflects the loss of value of an asset due to wear, time or obsolescence. The main methods are: straight-line, declining balance and units of production. In SYSCOHADA, depreciation is mandatory for tangible and intangible fixed assets with a limited useful life.
DIO is calculated as: (Average Inventory / Cost of Sales) × Number of days. A high DIO ties up cash in inventory. Optimization involves ABC analysis, just-in-time management adapted to the African context, and monitoring turnover by product category.
Trade discount is a reduction given to the customer who pays before the due date (e.g., 2% if paid within 10 days). Bank discounting involves selling a trade bill to the bank before maturity to obtain immediate liquidity, for a fee.
DPO is calculated as: (Accounts Payable / Purchases incl. tax) × Number of days. A high DPO may indicate good supplier negotiation, but can also signal cash flow difficulties. The goal is to balance cash preservation with maintaining good supplier relationships.
The DSF is the equivalent of the French tax return package in OHADA countries. It includes 18 to 24 schedules and must be filed within 4 months of year-end (usually by April 30). Penalties for late or non-filing are significant. CassKai automates DSF generation.
DSO is calculated as: (Accounts Receivable / Revenue incl. tax) × Number of days. A high DSO indicates significant payment delays. In West Africa, average DSO can exceed 90 days. Reducing DSO is essential for improving cash flow. Levers include: fast invoicing, automated reminders, early payment discounts, and customer segmentation.
In France, e-reporting complements B2B e-invoicing. It covers B2C sales, sales to foreign customers and payment data. Data is transmitted to the PPF.
EBITDA is an operational performance indicator that neutralizes financing choices, taxation and depreciation policies. It is used for company comparisons and valuations (EBITDA multiples).
Equity = Total Assets - Total Liabilities. It represents the company's net book value. In SYSCOHADA (class 1), it includes: share capital, share premiums, reserves, retained earnings and current year result. Negative equity is a serious warning.
Factoring provides immediate financing by transferring customer invoices to a factor, who typically advances 80-90% of the amount. The cost is higher than traditional credit but implementation is fast. It is a relevant solution for fast-growing SMEs with high working capital needs.
Factur-X is a hybrid PDF/A-3 format combining a human-readable PDF and a structured XML file. It is compliant with European standard EN 16931 and German ZUGFeRD 2.0.
The FEC has been mandatory in France since 2014 for any company keeping computerized accounts. It must be presented during a tax audit. The format is standardized (18 mandatory fields). CassKai automatically generates FEC compliant with DGFiP requirements.
In OHADA countries and France, the fiscal year generally matches the calendar year. A first fiscal year may exceptionally be longer or shorter than 12 months.
The FNE is Ivory Coast's normalized invoicing system. Each invoice is sent to DGI via API for pre-validation (clearance model). After validation, a QR code and fiscal seal are applied. CassKai natively integrates with the FNE API.
GDPR imposes strict obligations on personal data processing: explicit consent, right of access, right to erasure, data portability, breach notification. Penalties can reach 4% of global revenue. CassKai is GDPR-compliant.
The general ledger takes all journal entries, classified by account number. It shows the balance of each account at any time. It is a mandatory document in SYSCOHADA and PCG.
Gross margin = Revenue - Cost of Sales. The gross margin rate is a key indicator of operational profitability. It varies significantly by sector.
IFRS are issued by the IASB. They favor fair value and economic substance over legal form. Key standards include IAS 1, IAS 7, IFRS 9, IFRS 15 and IFRS 16. CassKai supports IFRS for international groups.
The income statement measures the company's performance over a period. It shows revenues and expenses. The net result (profit or loss) is the difference. In SYSCOHADA, it includes 4 levels: operating result, financial result, extraordinary result (HAO) and net result.
Each journal entry includes at minimum: a date, description, one or more debited accounts and one or more credited accounts, so that total debits equal total credits. Supporting documentation must back each entry.
Liabilities include equity (shareholder contributions + accumulated results), financial debts (loans), supplier debts, tax and social debts. In SYSCOHADA, classes 1, 4 (credit side) and 5 (passive cash) compose liabilities.
MECeF has been mandatory in Benin since 2020. e-MECeF is its software version. Each invoice receives a NIM (MECeF Identification Number) and QR code after DGI validation. CassKai integrates with the e-MECeF API.
Net cash = Working capital - Working capital requirement. It represents the actual balance of available liquidity. Positive net cash indicates the company can meet its obligations. Negative net cash requires external financing.
OHADA groups 17 member states in Africa. Its Uniform Acts are directly applicable in each member country, covering commercial law, companies, accounting (SYSCOHADA), securities and more.
The PCG is governed by the French Accounting Standards Authority (ANC). The current version (PCG 2014, revised) includes 8 account classes (1 to 8). There are 3 systems: base, abbreviated and extended based on company size. PCG is used only in Metropolitan France. CassKai natively supports PCG.
Peppol (Pan-European Public Procurement Online) is an international network for exchanging electronic business documents. It is particularly used in Europe. Companies connect via certified Access Points.
The PPF is the central platform of the French e-invoicing reform. Operated by AIFE, it will enable reception (mandatory Sept. 2026) and issuance of electronic invoices. Companies can also use PDPs (Partner Dematerialization Platforms).
We distinguish provisions for risks and charges (litigation, warranties) and provisions for impairment (doubtful receivables, obsolete inventory). Provisions are reversible: they can be reversed if the risk disappears.
Customer receivables are a major current asset item. Their monitoring is essential for working capital management. Aging analysis identifies at-risk receivables. In SYSCOHADA, receivables are classified in account 41 (customers) and may be subject to bad debt provisions.
RLS is a PostgreSQL feature used by CassKai via Supabase to ensure data isolation between companies. Each table has RLS policies that automatically filter by company_id.
ROI is a universal profitability indicator. A 50% ROI means that for every €100 invested, you get back €150. It is an essential decision tool for choosing between different projects.
The SCF is the mandatory accounting framework in Algeria since January 2010. Inspired by IFRS but adapted to the Algerian context, it uses a Current/Non-current classification and includes 4 financial statements.
SECeF is the normalized invoicing system being progressively deployed in several UEMOA countries. It operates on a clearance model similar to FNE and MECeF. CassKai supports SECeF for Niger, Mali and Burkina Faso.
Statutory audit is mandatory for companies exceeding certain thresholds. The auditor certifies that the annual accounts give a true and fair view of the financial situation. In OHADA zone, it is mandatory for SA and SARL above certain thresholds.
Revised SYSCOHADA (2017) is the accounting framework for 17 OHADA countries. It includes 8 account classes, 4 mandatory financial statements (Balance Sheet, Income Statement, TAFIRE, Notes) and 2 systems (normal and SMT). Covered countries include Ivory Coast, Senegal, Benin, Burkina Faso, Mali, Niger, Togo and 10 others. CassKai is the only cloud software to natively support SYSCOHADA.
The TAFIRE is specific to SYSCOHADA and shows how the company financed its investments and operations during the year. It highlights working capital changes, self-financing capacity and cash flows.
Tax returns include: VAT returns (monthly/quarterly), corporate tax returns, annual DSF, withholding tax returns. Deadlines vary by country. Non-compliance results in penalties.
In France, the tax return package includes CERFA forms (2050 to 2059) for the normal regime, or 2033 for the simplified regime. In OHADA countries, the equivalent is the DSF.
The trial balance is a control tool that verifies the debit = credit equality (double-entry principle). It can be prepared at any time and serves as the basis for financial statements.
UBL 2.1 is one of the 3 accepted formats for e-invoicing in France. It is a purely XML format. It is widely used in the Peppol network.
VAT is the main indirect tax in the UEMOA zone (generally 18%, 19% in Niger) and France (20%, 10%, 5.5%, 2.1%). The company collects VAT on sales and deducts VAT on purchases. The difference is paid to the State.
WAEMU includes: Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo. These countries share the CFA Franc (XOF) with a fixed rate to the Euro (1€ = 655.957 XOF).
Withholding tax applies notably to dividends, interest, royalties and fees paid to non-residents. Rates vary by country and income type.
Working capital is calculated as: Inventory + Accounts Receivable - Accounts Payable. A positive working capital means the company needs financing to cover this gap. In West Africa, working capital is often high due to long payment delays and significant inventory management. Optimizing working capital involves reducing DSO, increasing DPO and optimizing inventory.