Are you using your accounts as a mere tax extraction tool for the ATO?
It is common practice to take advantage of the extended deadline for tax lodgement. Rather than an occasional and temporary relief, the exception has become the norm from overuse. The result is that accounts are commonly prepared months and even years after the fact.
By that we inadvertently make our accounts a mere tool for the ATO alone, with no utility for the business whatsoever. Its sole purpose is to extract tax from you and your business, instead of providing an informed basis for business decisions as it is designed to be.
Is your accounts serving your business?
Sound decisions are decisions based on facts. By that, we are not suggesting you ignore your gut feel and instincts. On the contrary, you want to dial up your instinct and sharpen your intuition. Stay tuned to your inner voice, but use it as a radar rather than a rocket launcher. Let it frame questions and hypotheses, then seek evidence to verify the validity, variability and range of the key drivers, the outcome of each examined scenario against your expectation.
Are your accounting records late, incomplete or inaccurate?
If your answer is yes to any of the above, your accounts are not a very sound basis for decision-making.
How proactive is your accountant?
Your accountant has a leading role to play in keeping your accounts up to date. Are they providing leadership and trigger points for reporting, lodgement and payment processes?
Are they providing the financial process, structure and rigour to integrate financial management practice into your business cycle, so it become part of your business process.
Does your accountant keep your accounts current?
Do you get reminders ahead of deadlines and follow-ups to make sure all lodgements are completed on time.
Do you have a choice of service level that is appropriate for your business, be it monthly to weekly or daily?
Does your accountant help manage tax debt and balance cash flow?
After working out your tax position, we would review your cash flow and discuss a strategy for managing the tax debt, by controlling the specific timing of the lodgement on the one hand, and arrange an appropriate payment plan with the ATO on your behalf.
Do you get surprise revisions or penalties?
When there is a tax debt involved, we view that as a separate cash flow management exercise, rather than letting it become a roadblock for finalising the year-end accounts.
In fact, we would envisage having a realistic assessment of your cash flow requirements and devising a plan for it, rather than turning a blind eye, leaving your finance and tax to chances, risking unexpected tax liabilities and the resultant penalties and interest,and letting them snowball into a financial crisis that may threaten the very survival of your business and your family’s livelihood.
Is your accountant keeping up with your business?
Your accountant may have been the right fit when you first engaged them, but things change and you may need to reassess whether they are still a fit for your business.
Your business may have grown and increased in complexity. Does your once perfect accountant have the competencies and experience in the new dimensions and at the new level of complexity of your business, now and going forward? Can you still function effectively as your business partner and adviser in creating your business’ future?
Is your accountant keeping up with their business?
Is your accountant providing the agreed and expected level of service? Have they outgrown themselves? taking on too much without developing their team and growing their capabilities? Are they months or years behind in your BAS and tax returns? Are they reachable and accessible? Do you feel they can provide the advisory support you need?
Are they killing your business opportunities?
It is sad but true that tardy returns and late lodgements only bring you tax fines and audit risks, but can cause incalculable opportunity costs for your business.
This can occur in a number of ways due to the tardiness of your accountant which results in the unavailability of tax returns and financial reports, and consequently missed application deadlines for grants and subsidies, project and business proposals.
Are you doing what’s best for your business?
You have a choice: either continue to let your tax and accounting service deteriorate and drag your business down, or make a call. Decide that you do not want to put up any longer with tardy accountant that’s causing your business to bleed. Make a change. Get the accounting service that your business deserve.
by: Wilson Duong, Wilson & Assoc Chartered Accountants
Disclcaimer: The information provided within this article is general information only. None of the comments in these notes are intended to be advice, whether legal, financial product or professional. You should obtain specific advice regarding your particular circumstances from a tax or legal professional.
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About Wilson & Assoc
Wilson & Assoc Chartered Accountants provides taxation and business advisory services to individuals, investors and businesses wherever you are based. We provide specialist services to startups and health care providers.
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