The Australian Taxation Auditor said what…
Years ago, while at the now Latrobe University in Gippsland, an Australian Taxation Auditor was explaining about keeping three sets of books. I gasped. Horrified. The explanation went on to explain that these books were
The explanation went on to explain that these books were
- The diary. Throw away after a few years.
- The financial books. Throw away after eleven [ now seven] years.
- A journal of your journey. Alive from the first minute you pen the very first comment into them.These form the unseen backbone of your business. The vision and mission statements form the fibre that hold everything within together.
The journal of the journey was where you initially note all your physical assets. Your businesses physical assets I mean. Now work out the personal assets. Here you bring everything into the list. Include all the educational, skills and training your have.
Next move is to note the where you want to be in fifteen years time. Using the analogy of flying to the moon the question came back “The Moon. Was that where you wanted to stay?” To utilize the system the best for the taxation department, they wanted to know that you were returning. Therefore, before you get to the moon was a speaking circuit being developed for after your return! What about writing the book. Selling the rights to a film to be created. All the backup software and promotional goods. By one arm of the Australian Government supporting your choice to be in business what were they going to get back, besides tax from you that is. How was supporting you going to support the community you were with. What was you social worth going to be?
What you write in the journal is for your life time.
When explaining this concept to others I used what my then account told me. In the journal place what you are going to do in fifteen years time. In this case fly to the moon. Then add the before and after. The after was already covered above.
What of the before? Have you included the lawn mover that you use to mow other people’s lawns? Or loan out for a rate of return? When something was purchased in order to make more money go through the back that was classed as potential income. Potential income meant there had to be a return on investment. Returns on investments were a taxation persons delight. These meant business for the accountant, for the person who made the nuts that put the lawnmower together. When I used it to mow someone else’s lawn I got fitter. Therefore getting fitter to go to the moon, and back to speak on the circuit money was being generated. The Taxation department wanted money generated.
The disclaimer. Please do your own research.
It sounds a simple thing that the more money generated the better the GPI, but how many of us really think anything about it. I did not. To this day I am not sure what that means. However, do realise that I am not an accountant. That times have changed in the last fifteen years since I heard this description of the three valuable books in accounting.. And that anyone reading this post is charged to go and research with due diligence on their own behalf to find out what the current Australian Taxation laws are. Particularly those pertaining to their field.
See you next year too.
Each year the tax time comes around. And each year “It’s not the fist bounce” of getting the books to the accountant … “it’s the second bounce that hurts!” of waiting for the accountants verdict. Was the social worth return on my investment equal too or greater than the financial return on my investment?
Because you now have legitimate three sets of books, smile when your accountant asks for your signature so you can lodged at Australian Taxation time. I certainly hope you do.
Back To The top: Smile Cause It’s Australian Taxation Time.