Acronyms can be ambiguous

A common acronym is LOL. It can mean:

  • Laugh Out Loud
  • Lots Of Love
  • League Of Legends

A recent development in Australian taxation system is the introduction of STP or Single Touch Payroll. The purpose of it is to allow the Australian Taxation Office (ATO) to easily monitor employers’ taxation and superannuation obligations daily. This should go some way towards eliminating the tax loss through fraud, evasion, and business failure.

STP for many accountants will mean Something To Ponder:

  • Is this the thin end of the wedge in reducing their usefulness to businesses?
  • Will the ATO be able to pre-populate Business Activity Statements (BAS) and Instalment Activity Statements (IAS)?
  • If so, with many businesses who use accounting firms to prepare their BAS decide why should they pay somebody to do something that’s already done?
  • Will there be a reduction in end of year tax planning activity as all salaries and wages for business owners will been declared and on an ongoing basis?
  • Will it mean that businesses will engage bookkeepers more than accountants?
  • If there is reduced BAS and tax planning activity will I have the time to deliver services that will assist clients have better businesses or greater wealth creation/accumulation?
  • What skills and experience do I have to deliver other services?
Accountants need to ask and answer these, and other questions relevant to their practice, and be on the front foot. Many practitioners shunned financial planning to their detriment. This latest development should be a wake-up call that the business environment is in a state of flux.
Businesses on the other hand should ask their accountants “how specifically can you help me improve my business or my life?”
Having practiced as an accountant and been a client of several in my different businesses, I help accountants with practice development and businesses select an accountant best suited for their needs.