In the lead-up to Single Touch Payroll (STP) on 1 July, we’ve been busy working to help small businesses get prepared – raising business impact awareness around this new Australian Tax Office initiative.
Given that STP requires businesses to use digital accounting and payroll software, a big part of this is about understanding how online financial management improves small business operations.
We know that the shift to STP and new technology is daunting for some – 30 per cent of 500 small businesses we recently surveyed were ‘concerned’ about the prospect of STP compliance. That’s understandable.
But the data also tells us something else that’s important. The majority of early adopters – those who have already switch on STP – are feeling the broader business benefit.
As Kochie’s Business Builders reported, the survey of 500 small business owner found almost 70 per cent of those who are using STP are finding it beneficial to their business, with more than 60 per cent saying it’s proving to be a time saver. One-third of users say STP has given them back more than two hours per week.
Avoiding death by admin
A recent conversation with small business owner Odi Reuveni, founder of CUP O FLORA, brought these figures to life. I feel compelled to share his story with others who might be concerned about STP and the digital transition it involves.
For Odi, that digital transition took place two years ago. Driving it was his knowledge that he needed to spend more of his time on business strategy and less on administration.
Odi’s design for a simple but stylish, self-watering glass plant pot has won design accolades and generated six-figure revenue but, like the plants he’s trying to nurture, he’s been working on further growth. The key challenge was that he was only able to work on the business one day a week and at weekends.
Odi told us that being realistic about available resources and tapping into online technologies like QuickBooks helped a lot by allowing him to automate manual and mundane tasks.
Tasks that previously felt overwhelming or required support are now done automatically. The software provides reminders for actions that might otherwise slip a busy small business owner’s mind.
Integrations with third-party applications mean that data entered into one system automatically carries across into others. He now has visibility of his company’s true financial position thanks to synchronisation with various bank and PayPal accounts.
A small adjustment
Odi feels prepared for STP, calling it a “small adjustment” that should make life easier at the end of the year as super and payroll information has already been shared with the ATO. He’s even jumped the gun and become an early adopter of STP ahead of the 1 July deadline.
For those businesses yet to make the online accounting switch, Odi says it’s been well worth the effort for his business. He recommends tackling the task incrementally, accepting that trial and error is all part of the journey. Prioritise implementing the functions that are most important to your business right now. Accept you’ll make mistakes along the way but will soon enough wonder how you ever managed before.
It may be a tax office initiative, but STP is really an incentive to upgrade how you do business.