# General Business Category > Business Finance Forum >  Wesbank statement changes

## Dave A

When I got my Wesbank statement yesterday, it was pretty obvious that the format had changed. However, it was only once I compared the statement to my accounting record that the extent of the change became apparent.

Now I don't know if hire purchase agreements have changed too, but there is a distinct change for an instalment sale agreement.

At first I thought there was a mistake. The opening balance on this new statement did not match the closing balance on the previous statement. It was a fair bit less. So I called up the Wesbank call centre to check that it wasn't me that had got this wrong.

The long and short of it is Wesbank has changed the way they report your account. In the past, finance charges expected over the full term were captured up front. The balance shown at any given time was the sum of the instalments still to go. The only "hassle" is figuring out exactly how much in finance charges needs to be allocated against each financial year - but I leave that to my auditors to figure out. The main thing for me is that my account in my books reflects exactly every transaction on a Wesbank statement. And my balance and their balance matches to the last cent.

*Not any more.*
Now the balance shown is the capital portion still outstanding. The interest portion is added each month, and your instalment reduces that balance.

The upside of this is that you know what your settlement balance is at any time. Apparently, this capital balance now has to be reflected anyway in terms of the NCA - so why not base the whole statement system around it.

The downside is that I expect you can't write down the finance charges in equal instalments over the period of the contract. You are going to have to capture those interest charges each month - which means you will be writing down way more finance fee in the first year and carrying over more long term liability than previously was possible. This will result in a shift in your total debt to equity ratio - in the wrong direction.

At some point over the next few days I'll have to figure out exactly how I'm going to change over to this new system on my books. Oh well. Something to look forward to.

So anyway, if you notice that there's this mysterious gap between your closing balance on one statement and the opening balance on the next, this is probably why.

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## Dave A

A bit of an update. It looks like Wesbank has continued tweaking their statements, and in the end I have no complaints about how they've got it set up now.

The transactions list is based pretty much as set out in the post above, but there is also a line which says *Actual Contract Balance*. This works quite nicely for me for 2 reasons:

If there is a rate escalation, all I need to do is capture the differeence between what the Wesbank statement says and what my books have as the actual contract balance. So my record keeping system still works.Normally, I have to rely on my accountants to calculate the current portion of finance charges on any given fixed asset finance account. Now, all I need to do is pull out all the statements and add up the interest charges as shown on the Wesbank transaction list for the period. No more waiting for accountants to know my finance charge spend for the year.
I think I can say "Well done, Wesbank."

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## murdock

with another interest rate looming at the end of january...best thing wessbank ever did for me was to repossess my car and black listed me (thank you wesbank) after a serious accident which left me cripple for a couple of years...now everything i own is paid for in hard earned cash.

shame i see a lot of people sweating...houses going up for sale...the banks sure know how to put you in a fix...offering people cash back on home loans...second bonds... access bonds.

i have been watching how lots of people i know have taken second boonds because the house they purchased 10 years ago for only 2/300 000 are now valued at over a million...the banks have been handing out the money... now they are up to their ears in debt...repaying R10000 + bonds a month and the noose is just tightning as the interest rate goes up.

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## Ann Williams

Hi Murdock

I've been in a similar situation....

In the last big bond crunch (early to mid 90s?) I had just moved to a new job in Pietermaritzburg as a young manager. Had just finished paying off my car but new job gave company car so sold mine and put most of the cash into the deposit on a flat - my first home. (Had been renting previously; and with no mommy and daddy to give any kind of backup had already been pretty much on my own for years.) The rest of the cash went on buying a stove and a washing machine.

You know. The SA dream. Work hard; get reasonable job (in those days still being paid half what one's male counterparts were earning of course); buy small starter home; continue working hard etc etc

Scenario nine months later.... Bond rate has increased from 12% to 26% (yes, absolutely true). Rentrenched from new job with two weeks pay. Company I was with has been in business for over a 100 years but is closed down. So are many large companies in the area. 

No job, no car, a tiny payout and no backup. 

Can't find job in area at all. (Not helped by fact that women in heavy industry are still extremely rare. Will tell an interesting story or two about how that reared it's ugly head another time.)

Nine months after that my small pension is gone as is my UIF and still no permanent position. Move to East London to a room in my Aunt and Uncle's home (talk about life saving). 

Start waitressing for 80 hours a week. Continue search for jobs. Nothing permanent but get paid as a Kelly temp to completely rehash Mercedes Benz's quality documentation (good one; more experienced and qualified than most of the auditors/ staff in the QA division but once again not the right sex!) for a few months contract.

In the end, I sold my flat for a R20 000 rand loss for which the bank gave me a loan (at a really nice and hefty interest rate) which took another four years for me to pay off. In the year and a half or so that I was in East London before I managed to actually find a buyer for the flat in 'Maritzburg, the rent that I received for the flat only paid about 55% of the bond - so I not only had to keep food in my own mouth, pay my family a very modest rent, etc, etc; but I was still basically paying off what most people would at the time have considered a normal bond. By waitressing and odd jobs!

Quite frankly it was hell, but I also learned that I would rather have everything paid for as soon as possible. We now own our home (three bedrooms on a golf estate), own our cars (although mine is currently a 14 year old Uno, have just bought hubby a new Corolla and will probably buy a new one for me this year if the Uno finally konks in) and don't ever buy anything that we can't pay for within the next month. Credit cards are used as a convenience against carrying cash around rather than as a means of borrowing money.

And that includes the business. Yes, we don't live the high life with fancy cars, clothing, beauty treatments, flashy gadgets and dinners in 'larny' restaurants etc, and it can be a bit limiting for the business. But then again we ain't going to have the bank knocking on our doors to take everything including our home away.

The big blessing. I started writing articles for the local newspaper (I just pitched up on their doorstep with a handful of pieces to start with. Have no formal qualifications.) A year and a bit later, I was a full-time sub-editor and stand-in editor for their stable of community papers.

From there it's been on to Business Day Online Editor and then to my own business. So, onward...

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