SMEs need to improve their record keeping regimes to combat a move down the food chain by the Australian Tax Office as the ATO increasingly shifts its focus to the SME sector, argues accounting advisory firm William Buck.
Shane Crockett, William Buck’s Head of Taxation Focus Group, said there has been a definite move away from big businesses by the ATO and many SMEs that have to some degree avoided the ATO’s glare need to tighten up their record keeping practices.
“The ATO is being more stringent in what they’re asking for and businesses that have never had a phone call from the tax office are now being asked for substantiation,” Crockett said. “It’s caused a lot of concern among the businesses we work with, not because they have anything to hide, but they don’t understand the reasons behind the increased scrutiny.”
While the ATO is obviously only performing its role, Crockett said there needs to be more education on the matter by SMEs.
“The lack of communication has led to many becoming frustrated, not only by the consistently large demands that are being placed on them, but because they’re feeling like they’ve done something wrong. There needs to be more education on the why, what and how of what the ATO are doing. The ATO is doing exactly what an administrator should, but they need to take SMEs on the ride with them.”
For any business owners concerned about whether or not they’re complying with the ATO’s guidelines, the use of such tools as cloud accounting software could assist smaller businesses with record keeping best practice.
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