Tips to help you get ready for the new financial year
The Australian Taxation Office (ATO) is urging businesses to review their existing systems and processes to prepare for the new financial year, and has released some practical tips to make it easier to meet GST obligations.
Assistant Commissioner Jennifer Moltisanti says there are many benefits to be had from implementing effective business systems and maintaining thorough financial records from the start of a new financial year — such as saving time, energy and money. Aside from that, it would obviously make the tax office’s job easier.
"An ATO review of business activity statements which were adjusted as a result of audits revealed that over 80 percent of adjustments were as a result of unintentional GST errors," Moltisanti says. "Many of these may have been avoided with appropriate systems in place."
So on to those handy tips:
Manage the risk of error
- Ensure you have strong internal controls over your accounting systems and processes.
- Conduct regular internal reviews of your systems and processes and make sure they continue to support you in meeting your tax obligations.
- Train employees on how to use your business systems and avoid errors.
- Ensure your systems are secure — access should be restricted and have clear authorisation levels.
Respond to changes in your business
- If your business is undergoing a change, you’re at greater risk of financial error, particularly incorrect reporting of GST. Include a systems review as part of managing change in your business.
- If your business is growing, check that your systems continue to accommodate your business and tax obligations.
- Ensure significant one-off transactions are properly documented and processed.
Keep detailed financial records and check these regularly
- If you have paper records, consider scanning them so they’re also available electronically.
- Keep business and personal expenses separate. One way to do this is to have a separate bank account for your business.
- Use the correct GST accounting method to record transactions and avoid unnecessary amendments to your BAS.
- Check invoice details, including the ABN number and whether the vendor is registered for GST (especially new vendors).
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