STP for advisors – 5 things to discuss with staff
For a seamless and stress-free implementation of Single Touch Payroll (STP) with your practice’s clients, make sure you get your staff on board first.
With the introduction and roll out of Single Touch Payroll (STP), your staff need to be well-versed and enthusiastic about the change. Their confidence and the way they embrace it will in turn have positive benefits for client engagement, resulting in their ongoing patronage.
They need to have a good understanding of:
- What STP is
- The STP-enabled products your practice is recommending
- Your practice’s STP implementation and rollout plan
Set the STP scene for your staff by educating them first. You may also consider making a staff member your practice’s STP Champion. This will make sure you remain focussed on other areas of your practice and that you’re sending a message of confidence and empowerment to your entire team.
Here’s my five must-have conversations to have when it comes to STP education for your team.
- What is STP?
- Why are the ATO introducing STP?
- How does STP work?
- How will the ATO and others use your STP data?
- What benefits will STP bring to your practice and your team
STP is a new way your clients will report their payroll information to the ATO.
For employers with 19 or less employees, STP officially started on 1 July 2019.
The ATO recognise that accountants and bookkeepers will often be helping their clients transition to STP and have allowed you until 30 September 2019 to help make the tradition as smooth as possible for everyone.
If you’re unable to get all clients reporting by 30 September, you can apply for a deferral (and I’ll share how to do that in a later article and why it actually may be a good strategy for certain clients).
There are three main reasons:
- It creates a more level playing field (Australia’s has an estimated black economy of $50 billion)
- It helps protect employees’ superannuation entitlements (there’s approximately $2.85 billion of unpaid employee superannuation guarantee)
- The ATO wants to interact with businesses in a more ‘contemporary and digital’ way
When clients process their payroll, their STP-enabled software will send the ATO:
- Gross wages
- PAYG withheld from wages
- Superannuation payable for each employee.
- Then, when your clients pay their employees’ superannuation to their super funds, the super funds (excluding self-managed superfunds) will report to the ATO:
- The date your client made the payment
- The amount of superannuation your client paid
The ATO will analyse and compare information it receives from employers and employees’ super funds and will identify anomalies, making contact as necessary.
Specifically, the ATO will be able to see whether or not the employer has correctly paid their employees and whether payments have been made in a timely manner.
The ATO will also be sharing information with various government departments.
Each pay, your employees’ myGov accounts will be updated and they will be able to see their year-to-date for:
- Gross wages
- PAYG withheld from wages
- Superannuation payable
- Superannuation that you have paid to their superannuation fund
Over time, more and more government departments will be able to use your STP data for compliance and statistical purposes.
Initially, the ATO will be sharing STP data with Centrelink, Human Services and Home Affairs.
I believe STP is a gamechanger for accounting and bookkeeping practices, and it will give you an enormous opportunity to re-design and contemporise your practice.
In addition to streamlining processes in your practice and improving your practice’s profitability, STP has a whole heap of added benefits, including giving you and your team the freedom and flexibility to work away from the office.
I’ve listed a number of benefits for STP below so that you can choose the best few that will resonate with your staff and clients alike:
- It’s a reason to introduce clients to a more contemporary way of doing business, such as moving to the cloud
- It’s a perfect way to get clients more engaged with their numbers and to start to take more responsibility for them
- It’s an opportunity to have a more streamlined practice (no more shoeboxes!)
- It’s an opportunity to have better quality clients and to attract better quality new clients. (Start them off in the cloud and with good accounting and bookkeeping habits and there will be more time for you to provide value added services. Plus, it’s more likely clients will contact you for higher level advice.)
- STP is an opportunity to shift towards a better quality of work for your team to be working on – a way of work that’s so much more rewarding and betters utilises their skillsets
- Less stress for you and your staff, as it is more likely clients will keep their data up to date and they won’t be bringing in their work at the last minute
- It will potentially reduce the need for client payment arrangements, as they will be more aware of their PAYG and SG obligations
- It’s an opportunity for your staff, as they will have less of the headache and non-rewarding jobs assigned to them
- It reduces the chance your clients’ employees will miss out on their super
- It reduces the chance that your clients will fall behind with their ATO debts as the ATO will have mechanisms in place to contact them earlier than ever before
- It’s an opportunity for you to overhaul your practice, to reset your practice rules and even reset your client base by removing non-profitable or non-rewarding task and clients
After the initial groundwork is done and your team now understands STP and all that it entails, you’ll be ready to move onto the more practical, ‘next steps’ part of your implementation plan and rollout.
You will need to decide on the list of STP products you will be recommending, your STP internal processes and your pricing structure.
Chances are your team are so excited about the opportunities and positive changes it will bring to your practice, they’ll be able to allay any fears your clients will have about the impending changes and you will be lodging your first STP reports in record numbers.
Amanda Gascoigne is an industry expert in STP and has worked closely with the ATO since its inception. Amanda offers a number of workshops and training for bookkeepers, accountants and small businesses on STP. For more information visit her website.