Countdown to EOFY: reconcile super and PAYG payable
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.
- Go into the reconciliation and bring up the first account to reconcile
- What you are looking for is that the only unreconciled entries relate to unpaid SGC or PAYG.
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 can’t get the particular account to come up as an account to reconcile, then you will need to change the account type to a “Bank Account”.
- If you don’t know where to start or there are lots of transactions from prior years that haven’t been reconciled, ask your accountant.
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.