The number of Australians using self-managed superannuation funds (SMSF) is on the rise. SMSF assets are now worth a whopping $884.6 billion – around 25% of all superannuation investments. This increase in popularity has put immense pressure on accounting firms, financial planners, and auditors to meet the wide range of ATO compliance and reporting requirements for SMSFs – especially at the busy year-end tax time.
The ATO imposes strict compliance regulations on SMSFs
SMSFs are entitled to tax concessions on their investment income, but only if they comply with ATO regulations. Each year, SMSFs must lodge a timely and accurate tax return by 28 February (or 31 October for newly registered SMSFs). The ATO imposes a fine of $313 for each 28 days the lodgement is late, up to a maximum of 5 fines totalling $1,565.
SMSFs must also undergo an audit by an ASIC-registered independent auditor each year, no later than 45 days before they lodge their SMSF annual return. The auditor:
- examines the validity and accuracy of the SMSF’s financial records
- ensures the fund complies with superannuation rules, such as contribution limits, investment restrictions, and regulatory reporting requirements.
SMSF administrators also need to keep on top of ever-changing legislation, to ensure compliance and effective management of their funds.
Outsourcing SMSF administration and/or auditing saves time and money
To deal with the busy year-end workload and meet compliance requirements, many accounting firms, fund managers, financial planners and auditors are outsourcing SMSF administration and/or auditing. Outsourcing can save your company money by:
- accessing SMSF administration or audit services without paying for in-house wages, training, and office expenses
- avoiding financial penalties due to late or incorrect tax return lodgements
- maximising tax benefits and enhancing returns for SMSF members.
In addition to cost efficiencies, outsourcing can give your company extra staff capacity during peak periods, without slowing down to train or recruit additional staff. It’s an easy way to free up time for your in-house team, which allows them to focus on core activities and grow your business.
Tips for choosing your SMSF outsourcing partner
While there are obvious advantages to SMSF process outsourcing, you need to ensure your company chooses a strategic partner who functions like a seamless extension of your existing team. Otherwise, you may feel like you have lost control over the processes you’ve outsourced.
Consider the following factors when searching for your outsourcing partner:
- Experience – As one of the earliest offshore service providers for the administration and auditing of SMSFs, Sundaram Business Services has been assisting clients in the SMSF space since 2004.
- Expertise – Sundaram provides specialised knowledge in both SMSF administration and SMSF audit services – handling everything from setting up new fund details in reporting software, to compliance reviews and financial audits.
- Track record – With over 20 years of experience, our team of 70+ professionals handle around 5,000 super funds every year.
- Location – Two of the most popular outsourcing nations are India and the Philippines, due to their large talent pools and low costs. To make your decision easier, we’ve unpacked the advantages of each location in this article.
- Data security – With 2023 the worst year on record for data breaches, cyber security can easily be compromised by choosing the wrong outsourcing partner. Sundaram is certified in both ISO 9001: Quality management systems and ISO 27001: Information security management systems, highlighting our unwavering commitment to data security.
How we helped this accounting and business advisory firm reduce its SMSF workload by 80%
One of our valued clients offers wealth management services, catering mainly to SMEs, as well as SMSF management and compliance. They were having trouble recruiting and training new staff, with their existing team overworked and struggling to meet strict SMSF-related deadlines.
They partnered with Sundaram and we provided them with:
- a specialist team in both SMSF administration and SMSF audit services
- a back-office team in India
- qualified staff onsite for short-term engagements
- an expert team deployed at peak periods.
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