It is probably not news to many business owners that red tape is a pain in the neck.
A typical business can have many government agencies to report to, including the Tax Office (primarily Business Activity Statement and Income Tax), ASIC, APRA, ABS as well as State and Territory revenue offices for payroll tax. They all have their own method of communication and access to information. Some have portals you can access, some requiring a digital certificate, some have user IDs, some have passwords and, to make it worse, they are all different.
If you have a really organised person within the business who can keep track of all this or a well-organised external accountant, you are lucky. If not, it can be just one more headache you have to deal with as a business owner, as well as trying to manage everything else.
This tangle of red tape is about to be made much simpler and more seamless as a result of an initiative led by the Australian Treasury called ‘Standard Business Reporting‘ (SBR). SBR will be available from 1 July, 2010.
What is ‘Standard Business Reporting’?
The main purpose is to reduce reporting burden for businesses. SBR will allow business, accounting and financial systems to become the portal to report to government. It will no longer be necessary to re-enter data into different systems or interpret terms for one agency that have a slightly different meaning for another.
SBR will be built into the accounting systems that businesses use to manage their records. Once mapped, the information can be used to satisfy a range of reporting needs.
Businesses will be able to use a single sign-on, not only to send reports to multiple agencies, but also to log onto the web portals provided by the agencies involved in SBR.
SBR is harmonising common definitions across a number of state and federal government agencies. For the first time in Australia, the federal, state and territory agencies are working together to produce a ‘standardised’ set of terms. For example, most government agencies require an Australian Business Number (ABN) in their reports. In the early SBR analysis, it was revealed that there were nine different names used across multiple forms to describe the ABN across the participating agencies.
SBR is a voluntary program and Treasury expects take-up rates for the use of the technology by businesses will be on the basis of the time and money that can be saved.
The Benefits of SBR
The obvious benefit to business is time and money saving. With SBR, it will no longer be necessary to re-key data into different systems, or interpret terms for one agency that may have a slightly different meaning for another. SBR will allow your accounting software to become your personal ‘portal’ to report to government. It will operate like a post office — simply moving electronic messages from your accounting software to the right agency, and returning an electronic receipt. Treasury estimates a saving of around $800 million to business when SBR is fully implemented.
Providing assurance with SBR
A concern in the past — voiced by both business and government — is around the issue of accuracy and quality of information being sent directly to government agencies. Paul Madden (Program Director of the SBR project at Treasury) advised that the accounting profession has been consulted in the development of SBR. Their feedback was that while the majority of small businesses have good bookkeeping skills and practices — if they are unsure about accuracy of the data they are submitting, they should seek professional advice before pressing the button.
SBR will enable business to complete the bulk of their reporting requirements directly from accounting or bookkeeping software. It will also allow users to finalise the details and check accuracy prior to lodgement.
Software capability with SBR
Software companies have been working in partnership with SBR for the past two years. Paul Madden wasn’t able to say too much about this, due to commercial confidence, but you can bet software companies are working hard to be ready by 1 July, 2010. Treasury would like to encourage businesses to contact their software provider, to determine what SBR enabled software (and government reports) they will be delivering for the 2010/2011 financial year.
Implementation of SBR
SBR has more than 50 reporting forms currently under review, including business activity statements, PAYG payment summaries, TFN Declarations, superannuation and income tax. The key to savings will be on the correct implementation of SBR. Treasury advises that information will be readily available for the accounting profession, as well as the general public, on implementing SBR. This will include checklists to help with smooth implementation.
Future of SBR
Australia is following the example of the Netherlands SBR program. Banks in the Netherlands have begun using SBR technology to gather risk management information from customers. In a recent CPE TV interview with one of the General Managers, John McAlister, Assistant Commissioner with the Taxation Office, commented that a number of Australian banks are already looking at this opportunity.
This sounds like a great initiative by Government to help reduce red tape for business. To realise the benefits of SBR, businesses should start talking to their financial and accounting software providers to find out what SBR enabled products they will be offering.
To find out more, you can visit www.sbr.gov.au where you will find information tailored for software developers, business, accountants, bookkeepers, tax agents, payroll providers and other business intermediaries and government agencies.
Sue Hirst is a director of CAD Partners, a nation-wide mobile CFO “On-Call”/financial control/business accounting service for SME owners.