Cloud Technology – no need to take the “big bang” approach
The Four core areas where technology will make a difference in small business are:
By including them in your Management Reports everyone will learn the importance of them. In fact the ATO uses them to monitor whether your % profit and % expenses to income is in alignment with other businesses like yours. If your percentages are too high or too low, it may trigger an audit so keeping an eye on them are important.
Some businesses deliberately try to keep their profit low so they do not pay taxes. Potentially, this could create a problem if you or your Tax Accountant suggests an increase to your expenses just before tax time. Tax minimisation is a strategy, but be cautious and make sure you question it.
It is therefore a good reason to understand what other businesses in your industry are doing and more importantly, how your business is performing in comparison to industry averages. It is not measurement for the sake of making the numbers look good. There are legal reasons for not using this strategy. Ask your Tax Agent about it – he/she will definitely know about it. It is more about knowing what you should be earning and what your expenses should be.
written by Sylvana Livissianis