Review your business systems, prepare for successful financial year
As the End of Financial Year approaches, The Australian Taxation Office (ATO) is encouraging businesses to review their existing systems and processes to prepare for a successful financial year ahead.
"The benefits of implementing effective business systems and maintaining thorough financial records from the start of a new financial year are numerous and will save Australian businesses considerable time, energy and money," says Assistant Commissioner Jennifer Moltisanti.
"For example, an ATO review of business activity statements which were adjusted as a result of audits revealed that over 80 per cent of adjustments were as a result of unintentional GST errors. Many of these may have been avoided with appropriate systems in place," adds Moltisanti.
To support business owners in reviewing and updating their existing systems, the ATO has developed some practical tips to make it easier to meet GST obligations in the new financial year.
1. 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
2. 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
3. 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)
For more tips and advice, please see Key reasons to invest in your systems.