Unlike the millennium bug of last year, the GST comes with a guarantee. As sure as night follows day, the GST will arrive on the first of July.
In fact, many businesses are already feeling the implications of the GST, as the numerous action items that must be ticked off to render accounting systems GST compliant by this date become increasingly apparent.
While some organisations will choose remediation of existing systems, many others will bite the bullet, evaluate their accounting needs and upgrade to fully GST-compliant systems.
Those electing to bite the bullet will find a market stacked with solutions offering far more than just GST compliance. The versatility of these new products will take organisations far beyond the scope of traditional financials and monthly reporting, to a realm which can manage not only GST reporting requirements but also deliver greater business flexibility and competitiveness.
Many CEOs, CFOs and CIOs are starting to see a whole new world of possibilities opened up by the GST - specifically, in ways they can improve their business. Generally, management's aim has always been to become more competitive, faster to market and more dynamic, but these aims may have been hampered by outmoded IT systems. In many ways, the GST now provides the opportunity to achieve all of these goals.
For example, as a part of the pending GST requirements, all Australian businesses will now need to provide a more detailed breakdown of revenues. Consequently, this will also provide them with much more information about their customers. Likewise, greater scrutiny of suppliers and otherexpenses will necessitate more information about the company's outflow of cash and expenditure. The net result is a better view of the company and its customer base. As this information is a by-product of GST compliance it makes sense for companies to take advantage and use the information to facilitate better business management.
At a recent presentation, Australian Tax Office (ATO) the assistant commissioner for Small Business, Andrew Waite, outlined ATO's plan for tax reform and electronic commerce (TRECS). It included the need to move clients to comprehensive use of technology to minimise paper-based operations, become more efficient, reduce government red tape and minimise the tax-compliance burden through greater self-reliance. The ATO will be encouraging businesses to file reports electronically by using the Business Activity Statement.
While these electronic reporting requirements initially appear to besolely for the ATO's benefit, there are also some significant benefits for businesses. Small business will come more closely in line with larger corporations, and the electronic reporting capability required to submit Business Activity Statements provides a sound platform for future e-business growth.
In addition to reducing the ongoing cost of GST compliance, electronic reporting capabilities also provide Australian businesses with an excellent opportunity to improve their overall business-to-business communications, thus increasing the quality of business management, especially in improved productivity from better debt and cost control.
The GST may be a thorn in our side but it's not all bad news. Although the short term may be paved with challenges, the long-term benefits promise a revolutionary platform that will generate a new style of business activity, previously unattainable. The GST can therefore be expected to bolster businesses and open up opportunities to become more pro-active, customer-driven and globally competitive.
Scott Rumsey is the Australasian Financial Controllerat great plains software. e-mail him at email@example.com