Share

21st March, 2018

4 ways for accountants to be AIM ready

The accounting income method (AIM) becomes available for small businesses at the beginning of the new financial year – so learning how to talk to your clients about it is a must.


1. Get familiar with AIM


The first thing you need to do is get familiar with AIM.

To be eligible for AIM your clients will need to have a turnover of $5 million or less, they can’t be a partnership or trust and need to have AIM capable accounting software.

The way your client’s opt-in to AIM is to file an AIM statement of activity and make payment.

The key difference between AIM and the existing provisional tax methods is that AIM uses the last one or two months’ profit and loss instead of the previous year’s data.

AIM will be great for any business that wants to stay on top of their tax obligations, but it will be especially beneficial for new businesses and those impacted by seasonality – as they only pay provisional tax when they’re making money.

You can watch our primer on AIM below.


2. Identify which clients will benefit from AIM


The next thing you’ll need to do is review your existing clients and identify which ones stand to benefit from AIM.

Once you’ve identified who they are get in touch with them to educate them about AIM and why they’ll benefit from adopting this new method.

You need to be clear who will responsible for what as it is likely this will differ from client to client.

In some cases, your clients may rely on you for all tax obligations whereas others might look after GST and provisional tax themselves but depend on you for their end of year tax return.

For GST registered businesses that report on GST monthly, AIM will also be reported and paid monthly.

Businesses who are not registered for GST or do GST every two or six months, will report and pay provisional tax every two months.


3. Update your clients’ accounting software


AIM is only available to businesses that are using AIM-capable software which for some clients this may mean updating the software they use.

This is a great opportunity to move clients to an online accounting solution like MYOB Essentials so they not only have the ability to use AIM but they can also benefit from other online features such as:

  • Linking to their bank accounts to import bank transactions, and setting up automatic reconciliation, saving up to 10 hours per month on data entry
  • Staying on top of their invoices and data entry with our free mobile app MYOB Invoices, and taking control of their sales with real-time invoice tracking
  • Getting a more accurate view of their cash flow and making their tax obligations easier by storing their bills and supplier invoices securely in their accounts
  • Accessing their accounts anywhere and providing their accountant with access to their data for better collaboration
  • Pre-fill and file their GST return directly to Inland Revenue from their accounting software

MYOB is the only software provider that is giving you the flexibility to offer AIM to your customers however you choose to collaborate with them.

Whether you want to empower them to manage provisional tax themselves, work with them to manage it or you want to take care of it for them.


4. Help set up AIM in your client’s software


The last step is to make sure your clients are set up and ready to go well before the first AIM statement of activity is due (28 May for monthly filers and 28 June for bimonthly filers).

Once your clients are on AIM-capable online accounting software there’ll be a one-off set up that is required so that you or they can easily generate the AIM statement of activity when required.

Even if clients intend to handle provisional tax themselves, they may need your help with mapping the chart of accounts to the AIM form.

It’s unlikely that they’ll be as familiar with this kind of information as you are.

In MYOB software some smarts have been built in to make this process as simple as possible. For example, only presenting accounts that are relevant to the field in the AIM form you’re mapping to.

Once the set-up is complete filing is a breeze because the accounts are already mapped so generating the form will be as simple as a click of a button.

The form will auto-prefill information direct from the ledger data. If you have data from outside the ledger you can enter it as an adjustment.

Then you submit the statement of activity directly from the software to Inland Revenue, easy as that.