Help us to help you

I read an article by a local tax agent this morning complaining about a new client that had contacted him. The potential client had kept no financial records for the last three years and wanted the accountant to prepare his taxes in a hurry (so he could apply for a loan) based on made up figures he had plucked out of the sky. The extent of the information given was similar to the following.

              Fuel : $4,500

              Tools: $2,500

              Phone: $500 etc.

The numbers given were the same for each of the three years and there was no backup and no paperwork showing how these numbers were calculated. When the accountant balked at completing the work without details, the client said, “I thought that was your job.”

This is an extreme example, but it is the kind of situation advisors are faced with regularly. It appears that clients believed all the hype about accountants and bookkeepers being superheroes during the COVID years and now think we are also magicians. They think we can magic up numbers for the ATO, for banks and for finance companies without any of the preparation work. We are good, but we are also not in the same magical class as David Copperfield. We need your co-operation to do our work accurately. In other words, help us to help you!

At tax time, your tax agent needs paperwork to prepare your return. Their professional reputation and registration are based on the accuracy of the data they supply. And the Australian Tax Office are very definite about the types of records that need to be kept for individuals. You can find their rules at the following link.

https://www.ato.gov.au/individuals/income-and-deductions/records-you-need-to-keep/

If you are a total technophobe and have no capacity to collect these records digitally, help your tax agent by keeping them in a shoe box until tax time. It is not ideal, and the agent will not be ecstatic, but it will do at a pinch. Or, if you can operate a smart phone but do not want to pay for cloud software, you could test drive the ATO deduction app to capture all your expenses. The app details can be found at the below link.

https://www.ato.gov.au/General/Online-services/ATO-app/myDeductions/?=redirected_myDeductions

This app also includes a mileage section that you might like to use for collating all your business mileage.

For businesses, there are extra requirements on record keeping by the ATO. These can be found at the following link.

https://www.ato.gov.au/Business/Record-keeping-for-business/

These rules are extensive and are often the reason Appy Books and other advisors pick up new clients. Business owners have other things to stay on top of and compliance record keeping is just too much for them.

So next time you visit your advisor, please go forth with paperwork and receipts. Whether you have been with them for a while or if you are a brand-new client, they still need your ingredients to bake you a beautiful financial cake.

That is our job.