When starting a business that stems from a passion, like being a doctor and having a desire to make an impact in a community, the last thing you would worry about is an accountant stealing from you.
Dulcy Rakumakoe grew up in the dusty village streets of Temba, just outside South Africa’s capital, Pretoria. Growing up in the townships, she was often encouraged to become a doctor because she was one of those smart children.
“When I looked around in the township, there was one Dr Mosala, and he lived in a very nice house. But I also noticed that the community really loved him,” says Rakumakoe.
So in 1999, she completed her medicine degree at the University of the Witwatersrand in Johannesburg and started her internship in Klerksdorp, a small town in the North West province. She then went to do her community service at Ganyesa Hospital and this is where the entrepreneurial bug bit.
“I saw how people were struggling to access healthcare. People would travel plus-minus 100 kilometers just to see a doctor. I thought that is unfair and I must do something,” she says.
Rakumakoe went on to open up her first practice in Vryburg, a North West province town which had a shortage of doctors. There were also around 20 villages around Vryburg which had no medical facilities. In this small town, Rakumakoe also joined a female football team, doubling up as its goalkeeper and team doctor.
As a small practitioner, she had little knowledge of financial management and accounting. So she entrusted this to a small town bookkeeper, recommended by her dentist cousin who’d worked with the accountant before. It also came at an affordable fee of R2,500 ($235) every two months.
For five years, the accountant handled everything financial in the business, including payments to the South African Revenue Services (SARS) – the government’s tax collecting agency. The accountant, as Rakumakoe thought, paid around R15,000 ($1,400) to SARS every second month for value added tax (VAT) and around R40,000 ($3,770)for annual income tax. All seemed well and good.
“I didn’t pay much attention to the financial side of things, as long as I saw the money I made at the end of the month… the type of relationship I had with him was that he would tell me, ‘this is how much you owe to SARS’ and I’ll just give him a cheque and tell him to sort it out,” she says.
After reaching the ceiling of being a doctor and the community having been saturated with more medics, Rakumakoe left Vryburg for a mining town in Carletonville, just outside Johannesburg and the accountant decided to continue working for her.
Here, Rakumakoe opened a practise focusing on the health of the miners, especially with HIV being a big problem in the mining industry. According to the World Bank, migrant miners between the ages of 30 and 40 are 15 percentage points more likely to be HIV positive and a woman whose partner is a migrant miner is eight percentage points more likely to become infected.
While plying her trade around the mines, the South African Football Association called her up to be the team doctor for the women’s national football team Banyana Banyana. This led to the international governing body, FIFA, calling her up to be a field medical officer during the World Cup in 2010.
But back at the mines, something else was brewing. In March 2008, a year after moving to Carletonville, Rakumakoe received a phone call. She relayed the message to the accountant that SARS had just done an audit on her business and she needed to prove that she didn’t owe the taxman around $75,000.
“After that first call he switched off the phone and disappeared,” says Rakumakoe.
A few days later, a letter from SARS arrived warning Rakumakoe that she needed to settle the debt in two weeks or her business would be shut down.
“That’s when I felt the world crashing down on me. That’s when I felt what’s the point of being in business when I owe close to R1 million. How was I going to pay back that money in two weeks?” she says.
“I even tried going to the police, we just couldn’t find [the accountant]. I felt like it was the end of my business. I didn’t feel strong enough to face SARS. At that point I thought let me just allow them to come and evaluate what I owe so that they can take it and I’ll go look for a job because this business thing is not working.”
In her devastation, a friend introduced her to Kamva Chartered Accountants, who came at a much higher fee than what she was used to. She paid the firm R20,000 ($1,884) to manage her case with the tax collector and also for their services every two months.
“They re-audited my books for the past five years and presented cases to SARS with explanations of what had happened. It turned out my accountant was a fraudster who was directing all the money that he told me was due to SARS to himself,”
Luckily for her, the amount she owed was reduced and the tax collector allowed her to make payments of what was due over a six-month period.
“That was the lowest six months for me in that basically all my income was going to SARS to pay the debt and get my things in order,” she says.
“I knew at that point that I had to understand the financial side of the business. It was a risk for me to have been running a business for so long without financial understanding and knowledge.”
This prompted her to register for an MBA with the Gordon Institute of Business Science to help her understand all the facets of her business. While studying, Rakumakoe managed to pay off the debt.
Since then, her business has grown.
After completing the degree, the 39-year-old was able to properly develop Accessible Quality Healthcare (AQH) into a recognizable brand in Mondeor, south of Johannesburg. AQH is a private medical center providing healthcare for low to middle income markets through building integrated health and wellness centers.
Besides running AQH, Rakumakoe still runs the practise in Carletonville’s mines and is now able to follow her passion and keep one eye on the books.