28th May, 2018
Reviewing the superannuation account and the PAYG Payable account works in much the same way as your bank accounts and credit card accounts with one exception and that is that the ‘new statement balance’ will always be $0.00.
If your payroll has been setup correctly, the super guarantee contribution (SGC) and PAYG Payable will accrue each pay period in a balance sheet liability account and when the payment is made to the superannuation funds and the ATO respectively, that amount will be coded to the same liability account.
You can then tick off the individual payments that make up the larger monthly or quarterly payment.
We suggest that the reconciliation is undertaken each month as any coding errors, underpayments or overpayments can be identified easier.
Quite often we find that clients code the actual payments back to the Profit & Loss account and therefore overstate their superannuation expense. The other advantage of reconciling these accounts monthly, is that you can identify if a payment has been missed and will never be behind in your SGC or PAYG.
If you missed last week’s blog, head to countdown to tax time: What you need to do 6 weeks from 30 June – review your creditors.
The information provided here is of a general nature for Australians and should not be your only source of information. Please consult an experienced and registered tax agent as each small business’s circumstance will vary.