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TOPIC: Are your business systems costing you time & money

Are your business systems costing you time & money 13 years 1 month ago #258

  • steph
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When the systems businesses use for capturing and recording GST information fail, often those businesses will go on to report incorrect amounts of GST and make potentially costly errors. We refer to these errors as the integrity of business systems (IBS) risk.

Systems may fail because they are not set up properly to start with or because they are left unchecked for long periods of time. Whether you are a new or established business, we encourage you to review your business systems, processes and controls - they could be costing you time and money!

There are a few key things you can do to lower your risk profile for the IBS risk and ensure your systems are best placed to support your business and report correctly.

Do you have written procedures in place?
Written, documented procedures are important for:
    identifying the correct GST treatment of each supply and acquisition
    identifying processes to be followed for unusual, large or one-off transactions
    tracking and processing adjustment events such as cancellations and payment changes
    preparing your activity statements correctly.

Do you have control over your internal environment?
Strong internal controls over your systems and processes will help you:
    to introduce GST governance and risk management processes
    have levels of delegated authority and clear escalation procedures
    have an established process for seeking external advice
    use your accounting software effectively to generate exception reports
    perform monthly reconciliations
    have a clear separation of duties.

Do your staff receive training and support mechanisms?
When your staff receive training specific to your systems and business needs, this will help you manage risk.
You can:
    have help cards and other material to assist staff
    create succession plans – having several people within your business capable of undertaking the same role
    have a process for mentoring and guiding new staff
    provide training for existing staff to keep their knowledge and skills regularly updated.

Do you conduct regular reviews?
Regular internal reviews can ensure your systems and business processes are on track, allow you to update and include any relevant changes to GST law and help you manage risk.
You can:
    engage the services of a tax practitioner or auditor to perform an external review
    perform an independent internal review of your tax processes
    ask your systems software provider to review your systems
    review and update your written procedures and software regularly
    monitor reporting trends.

Are your systems secure?
System security is import for managing the IBS risk.
You should ensure that:
    access to your financial and accounting systems is restricted and has an audit trail
    you have a ‘lockdown’ process for month and year end
    there are clear authorisation levels for processing unusual or one-off transactions.

Do you have well established relationships when you need tax advice? Knowing where to go and who to ask when you need resolution to a tax or system issue can help you manage business system risk. It is important that you:
    have a good working relationship with your tax agent, accountant, bookkeeper or software developer
    are aware of where you can go to obtain advice.
Stephanie Lee
Imprest Business Services
www.imprest.net.au
Facebook: www.facebook.com/Imprest.Bookkeep
"Professional bookkeeping and administration Services"
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