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Small business accounting honesty

Following on from last week’s instalment where I discussed ATO benchmarks and how they are being utilised by the ATO to potentially catch out small businesses who may not be doing the right thing, I would like to mention the data matching programs that are also utilised by the ATO. This process starts when you provide your tax file number or ABN when doing business, whether it be opening a bank account, buying some shares or just supplying and receiving tax invoices with ABN’s printed on them.

The fact is, the powers of the ATO allow it access to a very wide range of information about you.From simply accessing banking records to determine if you have declared all of your bank interest income to accessing RTA records to see what motor vehicles are registered in your name, the ATO pretty well has you covered.

So the message here is that you need to be honest and open with your small business accountant about your entire business and personal affairs. If you are not honest and try and keep information from your business accountant, then in the long run it is only you that is going to suffer. Keeping information from your accountant also prevents any decent forward planning to be conducted on your behalf, again you suffer. The simple lesson here is to be upfront, so your business accountant can give you the best advice possible to allow you and your small business to prosper.