The ATO has announced a number of initiatives that they would like implemented by 2020, which will completely change the way they interact with taxpayers and hopefully be more efficient for both parties.
As reported by SmartCompany some of the ATO’s visions are:
• Businesses will use software to keep their records [no doubt many already do this, but the ATO is keen that this is expanded];
• The software will automatically provide the interaction needed between the ATO and those businesses and/or their advisors for tax and government programs (e.g. social security, etc) compliance;
• Using a standard chart of accounts, developed in consultation with industry, businesses will be able to keep records, deal with their bank and meet their tax obligations;
• The use of standard business software will enable the seamless provision of the data to the ATO; and
• The ATO will use the standard chart of accounts to determine a business’s tax obligations.
It’s easy to think that it will take some time for the ATO to achieve this, but it is worthwhile noting this is currently either mandated or voluntarily used in some form in more than 25 countries. You also have to consider the immediate benefits the ATO and other government agencies gain from having access to all this big data and it’s a no-brainer for the government to implement this. The technology is already here and businesses should start thinking about any benefits that can be made from investing in (better) software.
Current cloud accounting systems offered by the likes Xero, Sassu, MYOB & Quicken offer an immediate benefit on costs (A cloud accounting system could be accessed for approximately $30 month when compared with desktop accounting packages costing approximately $450 plus annual licence fees). Other noteworthy benefits are:
• Ability to set up direct bank feeds and setting up rules for recurring transactions which results in less time inputting information.
• Multiple users can access the real time data from various locations. No more time wasting on having to send files to various people.
• No backups required or upgrading or software.
• Real time reports to help you run your business more effectively.
• Accountants have more time to provide value adding advice rather than providing tax compliance services and if they are still only providing tax compliance services, ask them for a discount!
It doesn’t make any sense to delay making changes to your accounting system and to wait until the ATO makes this mandatory. Costs are no longer prohibitive to change accounting system and there is a lot to like about the cloud accounting systems on offer and all the advantages they can provide.
