Change is never easy. Particularly when it feels like it’s not our choice – or when it’s mandated by the tax office. But that doesn’t mean it can’t represent a window of opportunity. So it is with STP (Single Touch Payroll). Having been passed by the Senate for review by the lower house of Parliament, the new system is now one step closer to becoming a reality for small businesses.
STP is all about increased visibility and automated information sharing. Real-time data is sent to the Australian Tax Office (ATO) every time you pay your employees, including wages, deductions (like workplace giving) and super information. This increases efficiency and reduces tax evasion.
It’s estimated that almost 700,000 businesses with 19 employees or fewer would need to comply by the July 2019 deadline should the law come into force. The ATO has recommended that small businesses use STP-ready accounting software to comply.
As a technology provider that works closely with small businesses, we know there’s anxiety about shifting from trusty old methods like Excel or other manual tools. The fear is that adapting will be hard and they’ll have more to lose than to gain.
The truth is the change can be a positive one and the upside is twofold. Yes, you may need to upgrade your accounting software and you or your payroll staff will need to be trained. But overall the news is positive for small businesses – and there are ways to smooth the transition. Benefits include:
Beyond these STP-specific benefits, the bigger picture is that moving to an STP-ready accounting solution will deliver benefits extending far beyond STP compliance.
Advantages of the right online accounting software include:
If you currently use accounting software, first check with your supplier if the software is STP-ready or will be ready by 1 July 2019. Some other ways to get ready include:
Partner: Work with your bookkeeper or accountant. Not only can they keep you up to speed on your compliance obligations under STP but also with how to get your technology ready.
Technology: If you need to start using online accounting software, pick a provider that is STP-enabled or offers a low-cost STP solution for small businesses. The right software provider will be able to quickly guide you through common queries as you get started.
People: Make sure you keep your staff updated on why you’re implementing the new system – including the benefits that extend beyond STP compliance – and get them ready. The success of any IT implementation is about people, not just technology.
Stay informed: Keep an eye out for the latest ATO factsheets, as these contain helpful information about what to expect.
As the Rolling Stones once sang, we can’t always get what we want – but sometimes we get what we need. For many small businesses, the Single Touch Payroll system is a great reason to make the inevitable leap to digital accounting software and start channelling the power of real-time information in their business decision-making.
Nicolette Maury, Vice President and Country Manager, Intuit Australia