The SuperStream program is the first major foray by the Australian Tax Office into accounting’s digital future.
It presents some real opportunities for accounting firms. Superannuation transactions are, quite simply, big business. They cost $3.5 billion annually, and account for more than 100 million financial transactions every year.
Changes to the way superannuation is processed affect the entire business world. For many, it will be their first venture into the world of automated processing; an area of significant growth for the profession of accountancy.
This guide will provide you with an overview to making your accounting practice SuperStream ready.
What is SuperStream?
The changes have been brought in to make it easier for both businesses to process payments to their employee’s super funds and for employees to make changes to their investments.
Currently, payments can be made in a whole range of ways: via cheques, bank transfer, forms filled out through a fund, or online banking systems. Some of these methods may seem old world but they are more prevalent than you think. An industry survey undertaken less than a year ago found more than one-third of all funds were processing transactions manually and without business software.
According to the ATO, the average employer deals with 40 different funds, each with its own particular methods. Under SuperStream, all payment data will need to be sent electronically and in a similarly structured format and according to a single standard.
For clients with more than 20 employees, SuperStream kicked off on July 1 2014. They must meet compliance requirements from June 30, 2015.
Small businesses, or those with fewer than 19 employees on the payroll, can choose to start adopting the scheme now, if they are equipped with the right software solutions. But SuperStream only officially gets underway from June 30, 2015. They are only obliged to meet requirements when sending superannuation contributions from June 30, 2016.
Get your clients planning early
Now is about the time to get moving. The ATO recommends that once clients have finished assessing their options – and if they have come to you seeking advice you can, happily presume they have – they should allow 90 days to get ready.
Get the information you need
Under SuperStream you will need to send not just payments electronically, but send the right data. Depending on the type of super fund used, this can include: employee Tax File Numbers, Unique Superannuation Identifiers, and the fund’s ABN and “electronic service address”.
For anyone employed in the last year, this information will be readily accessible: it’s in-built on the standard superannuation choice form. Otherwise, the data will have to come from individual funds.
Much of the data needed is specific to self-managed super funds (SMSF) the trustees of which will have to provide to their employers on time.
The ATO maintains a handy register of all funds, products and their addresses, identifiers and bank accounts.
Assess your software capability
The right software is the most important step you can take toward becoming SuperStream ready. Compliance with new regulations may seem like a headache for many businesses, especially the one-third who are not yet digital. But there’s a simple solution and that’s ensuring your software is SuperStream compliant. You can check your current business software capabilities against a checklist here.
The right software will also ensure every payment processed generates the data required: including the unique reference number and links them to contribution files. This will ensure that payments can always be reconciled by recipients.
Have a backup plan
Change can be very intimidating. Even if your software is completely compliant there is always room for errors or nervousness on the part of clients.
Ensure you have a fallback plan such as reverting to manual processing so you can assure clients.
And remember: The ATO has signaled that they will be flexible for clients who are at risk of missing deadlines, if they can show they are making a genuine effort to comply on time.
Reap the benefits
The right software will instantly slice, dice and meet your client’s superannuation obligations. It will turn a time consuming task into one that can be achieved with the push of the button. Instead of sending contribution to the average of 40 different funds manually, efficient accounting software can make payments and send information according to the new standards. Transactions that once took a fortnight to complete and be processed can be done in as little as 30 minutes and with only a few clicks.
To find more about the importance of being compliant and staying on top of latest regulations and trends, download our ebook, Beyond compliance: Five trends changing the world of accountancy, below.
To read more about latest changes within the world of accountancy, download our free ebook: Beyond compliance: Five trends changing the world of accountancy.
Please note that this article is intended for general information only and is not legal advice. You should seek professional advice suitable to your own circumstances.