AJ Buckingham & Associates - Chartered Accountants
  • Home
  • About Us
    • The Team >
      • Andrew Buckingham - Principal
      • Sheridan Buckingham - Practice Manager
      • Fiona Powell - Accountant
      • Adeel Khan - Graduate Accountant
    • Mission & Vision
  • Services
    • Business Advice
    • Taxation Services
  • Audit Shield
  • Blog
  • Contact
  • More
    • Testimonials
    • Client Directory
    • Quarterly Newsletter
    • Useful Links

Dealing With the ATO  

23/10/2015

 
​It is estimated that one in fifteen small businesses fail because of inaccurate or poor record-keeping. The ATO’s record keeping requirements have a dual purpose, tax collection being the primary one, but to also give small business owners more financial control. Up to date financials let you make informed business decisions.

Picture
Since you have to comply with the ATO requirements, it makes good business sense to make the process and figures more meaningful. Current data will give you greater knowledge of your business’ strengths and weaknesses and help you identify the need for finance before it becomes a crisis. Of course, to obtain finance from a bank you need up to date financial statements.

With the ATO audit activity on the rise they now have a large database of over 30 industry standards they use for benchmarking business performance. These include gross profit margins in your industry, the ratio of wages to turnover and other key performance indicators. Any significant variance in these benchmark ratios could trigger an ATO audit, particularly if you operate in a cash industry. The ATO also reconcile BAS information, PAYG information and end-of-year tax returns and expect you to be able to explain any differences between the various statements.
 
Late lodgement of documents is also an issue, with late BAS statements incurring fines of up to $850. It’s better to show a BAS estimate, 99% correct, on time, than show a 100% correct BAS late.
 
Record Keeping Guidelines
 
  1. Get on top of the paperwork and the software you are using. If you are struggling, engage someone else to do it (like a bookkeeper or our office) and have them report back to you. Get to know your key numbers.
  2. If you’re behind with the ATO let us negotiate a payment arrangement for you. Accountants have a rapport and extensive experience with the ATO. They also have greater confidence in negotiating with us rather than an individual client.
  3. Comply with the deadlines. An approximate BAS on time is better than a late BAS and the ATO has increased the fines and penalties for late lodgement.
  4. Check the industry benchmarks on the ATO’s website or talk to us to make sure your business is operating within the guidelines.
 



Comments are closed.

    VLOGS

    Is it the Right time to Start a Business?
    2020-21 Federal Budget Summary
    Car Expense & Home Office Claims
    Business Lessons from a Pandemic
    Marketing in Preparation for a Post Pandemic World
    Working Remotely? The Ins and Outs of Claiming Home Office Expenses
    JobKeeper Payment Scheme - Extension and Changes
    Stage 4 Restrictions Affecting Businesses
    Post-Pandemic - Survival Then Revival
    Pivot, Adapt, Survive and Even Thrive
    2020 Year End Tax Planning
    Temporary Early Access to Superannuation
    Tax Office Launches Tip Off Service
    New Financial Year Brings Change
    The Importance of Local Search for Small Business Owners
    Thinking of Renovating your Investment Property?
    Buyer Beware - Before you Buy a Business
    How to Reduce your Business Risk
    ATO Releases Further Guidelines for 'Downsizer Contributions'
    Single Touch Payroll
    Financing Your Start Up Business
    Cents Per Kilometre Rate Change
    Common Bookkeeping Mistakes To Avoid
    Tax Office Launches Mobile Strike Teams
    Plan Your Success in 2019
    Cash Flow – The Lifeblood of Your Business
    Tax & Your Christmas Party?
    Franchisee gets massive fine for poor Record-Keeping
    Expand your customer base with Facebook Advertising
    Thinking of starting a business?



    RSS Feed

Picture
Picture
Call us 03 9435 4444
or contact us >>
Picture
Liability limited by a scheme approved under Professional Standards Legislation.
Copyright 2020 www.ajbuckingham.com.au