Tips on how to approach an ATO audit!
Audits are necessary to ensure there is fairness, legality and compliance for all businesses. Most people will cringe when they hear the word “audit”. Instantly there are is a foreboding feeling of facing mountains of receipts and a to-the-death-battle to clear your good name.
However, there are ways to make the process of an audit easier on yourself, your business and for the ATO.
Turn the mountain of receipts into a mole-hill through organisation.
It is vitally important to keep written documentation of all major purchases and income received in your business. This is your primary asset in an audit.
You need to keep written evidence for a period of five years, so instead of keeping these in a jumbled shoe-box, be methodical with your organisation. Store your documents by financial year and in date order. Also, keep any information which can provide context to any unusual transactions.
Having organised, detailed and easy to access records can save you a lot of stress in the event of an audit.
2. Play nice, not foul.Dol
Few people will say they enjoyed the experience of an audit. Essentially, an ATO audit implicitly communicates a sense of doubt or uncertainty that your tax compliance is accurate. It may be tempting to be uncooperative or difficult with the ATO, but this is the wrong approach.
You need to remember, the professionals conducting an ATO audit are people too. They have a job to do, same as you. Make the audit process smoother by having requested documents ready and forwarded in a timely manner. By cooperating instead of fighting the system, the audit will be completed with less stress and unnecessary drama.
Contact us at Dolman Bateman or Buildersbooks if you are looking for an experienced accountant or Bookkeeper.
This information is not to be relied upon without speaking to your accountant, tax agent or financial adviser depending on the advice