For SMEs, tax time is one of the most stressful periods of the year. As most SMEs do not have the budget or resources for a dedicated accounting team, most of the tasks and tax requirements fall on the business owner.
To make matters worse, the added tax requirements following COVID-19 and JobKeeper payments has meant tax time has become more complicated than ever.
However, once it’s broken down, tax time is simply admin time. While there is a heavy lift for SMEs to prepare documents before submitting to the Australian Taxation Office (ATO), there’s a number of ways SMEs can be more efficient and productive throughout the process.
Here are two ways SMEs can simplify tax time and reduce time spent on administrative tasks.
Better organise documents through digitisation
A well-managed business should keep track of tax documentation and business income throughout the year. However, this is not always possible. A primary challenge in keeping track of all business-related documents is that not all documents are the same. Some business expenses come in the form of crinkled up receipts, while others come as digital invoices.
The best way for businesses to prepare for tax time is to convert all paper-based documents to digital documents. This can be easily done through a mobile phone and a scanning app, for example Adobe Scan, which is free to use. By digitising all documents, SMEs can keep track of all expenses, file accordingly and combine them all into one PDF document, if required. It also means that once the documents and receipts have been digitised, SMEs can ditch the shoebox and not worry about expenses going missing.
The start of the new financial year is the best time for SMEs to get on the front foot for the year ahead by beginning to scan each and every document.
The use of e-signatures has grown quickly over the last year. Adobe conducted research into the use of e-signatures and found that almost half (48 per cent) of Australians have signed documents electronically in the last two years.
This behaviour is set to become the norm, with 80 per cent of Australians stating that they will continue to e-sign documents after the pandemic is over. In fact, this service will be expected with three quarters (73 per cent) believing companies that don’t offer e-signature options are behind the times.
With snap lockdowns and hybrid working models causing logistical challenges for many businesses, it’s important SMEs understand how e-signatures can help create efficiencies across the business.
The ATO specifies it accepts electronic signatures for tax returns, therefore e-signatures can become critical to productivity at tax time. SMEs can e-sign tax documents, share these with tax preparers, sign off on financial statements and also witness signatures with their accountant or business partners through a Microsoft Teams call.
As we finish one financial year and look towards the next, it’s crucial for SMEs to truly embrace the new world and accelerate their business growth through digital documents and e-signatures. Not only does this technology improve proficiencies during tax season, but through broader business application, SMEs can save countless hours of administrative work, promote business continuity, and lead to overall business efficiency.