The Worst Word to hear from your Accountant
By Vik Naidu
“Audit”... When you have hired an accountant to monitor your business, one of the worst words which can come out of their mouth is Audit … Don’t worry, here’s how to stay safe from audits and ensure your business runs smoothly!
Conducting an audit is the last thing business owners’ hope to ever go through when managing their business. In case of an audit, how can they make sure they are safe?
You might be so sure that you are doing everything right in your business, but your accountant could weave his way through the records to identify and rectify any shortcomings.
Conducting an audit does not mean your business is about to go down the drain. It could be to make sure that future losses are mitigated or just to make sure everything is on point. However, to help you avoid false alarms it is essential the information you provide is accurate. Below are some points to memorize every morning to avoid an audit in your business.
Make sure bookkeeping is done accurately:
One of the most important aspects of a business is bookkeeping … but who on Earth likes to spend hours and hours, days upon days seated making your accounts right?However, hiring an experienced and efficient bookkeeper could yield you a lot of benefits when at the edge of conducting an audit in your business. Make sure all the income and expenses are recorded to the last cent and accordingly everything is deposited in the bank. Ask yourself, whether you have recorded everything so far … If not, it’s time to think again!
Bookkeeping on time:
Delaying lodgement of your transactions or to record your transaction can be one of the best ways to fall into trouble. Being a late lodger can make you get noticed to ATO because, then you will not be able to lodge your BAS, IAS and tax returns on time. It is easy if you log everything on that day itself, isn’t it? Make sure you lodge everything on time and accurately.
Keep personal transactions separate:
Are you also one of those business owners who mix business with pleasure? The level of difficulty is EXTREME especially if you are a sole trader. However, it is very important that you keep your business and personal transactions separate. To start, have a different bank account for personal transactions and another separate for business transactions.
Always follow the benchmarks:
ATO has kept certain benchmarks or margins for every type of business. Make sure you are aware of these margins for your type of business and work accordingly to avoid any likelihood for an audit.
ATO compliance is applicable by law to all business owners in Australia. The E-Audit conducted by ATO can bring in a number of disadvantages if the standards are not properly met. ATO audit is usually not covered under your accountant’s fees which can cost you thousands of dollars.
But, we as accounting and tax engineers will focus on you growing your business further and guarantee that you are RED ZONE SAFE! With our comprehensive Accounting and Taxation reporting technology which eliminates human errors, we make sure you don’t fall in traps of missed compliance. With so much to gain, ask yourself; “what do I have to lose?”
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