A Guide to Legally Outsourced Accounting Services Australia: What You Need to Know

Outsourcing is a powerful tool for businesses in Australia. In fact, it is transforming Australian firms that are looking to save time, reduce costs and gain access to specialised expertise.

The accounting industry, in particular, has seen a significant rise in outsourcing. Companies are choosing to delegate various financial tasks to third-party providers. Two-thirds of the top 100 firms now outsource to offshore accountants.

But how do you know what are the legally outsourced accounting services Australia? And how can businesses ensure they comply with ATO rules when they do?

So let’s explore legally outsourced accounting services Australia. We’ll discuss the benefits of outsourcing accounting tasks and the key considerations for businesses that are thinking about making the shift from in-house accounting to outsourcing. We’ll also look into the legal aspects of outsourced bookkeeping, BAS services and offshore accounting.

First Things First: What Accounting Tasks Are Legal to Outsource in Australia?

Many businesses find that outsourcing various accounting tasks can be both efficient and cost-effective. But beware. While some tasks can be outsourced, others have strict legal requirements.

So, what can be outsourced legally in accounting? In Australia, businesses can legally outsource most accounting services. This includes bookkeeping, payroll processing, BAS (Business Activity Statement) preparation and tax return preparation.

However, there are some services, especially those that require interaction with the Australian Taxation Office (ATO) or specialised knowledge of local laws, that have specific compliance and regulatory requirements.

Here are some legally outsourced accounting services Australia:

1. Bookkeeping and Accounts Payable/Receivable

Bookkeeping is one of the most common accounting tasks that businesses choose to delegate. This includes tasks such as managing invoices, processing payments, reconciling bank statements and updating the general ledger.

As long as the outsourced bookkeeper is registered as a tax agent (if applicable) and follows ATO compliance rules, businesses can legally outsource these services.

2. Business Activity Statement (BAS) Preparation

BAS services can also be outsourced. But they must comply with the outsourcing rules for Australian accounting firms. In Australia, BAS preparation can only be done by a registered BAS agent or someone with the appropriate qualifications.

The outsourced provider must have a registered tax agent status to prepare and lodge BAS for businesses. You must make sure that the external provider adheres to the ATO compliance rules to avoid penalties.

3. Payroll and Employee Tax Filings

By outsourcing payroll to a trusted service provider, businesses can ensure that employee wages, superannuation contributions, tax deductions and other relevant details are handled accurately.

Payroll processing can be outsourced to firms that are compliant with the ATO rules for outsourced bookkeeping. This will ensure everything is filed on time and in full compliance with Australian tax laws.

4. Tax Return Preparation and Filing

Registered tax agents in Australia can legally prepare and file tax returns on behalf of businesses. However, if a business is outsourcing tax return preparation, it is essential that the bookkeeping outsourcing Australia provider is a registered tax agent. And they must comply with all applicable CPA outsourcing guidelines.

While the work can be outsourced, the final responsibility for the accuracy of the return lies with the business owner, as the ATO rules mandate that businesses must ensure their tax filings are correct.

Offshore Accounting Legal Services: What You Need to Know for Compliance

It’s tempting to outsource to overseas providers in countries where labour is cheaper. However, this raises concerns about compliance with Australian tax laws. Specifically, can businesses outsource tax returns offshore legally?

The answer is yes, but with conditions. If the offshore provider is registered with the relevant Australian authorities (e.g. ATO) and the business ensures that ATO compliance in outsourcing is met, offshoring can be legal.

Businesses need to ensure that the outsourced provider understands and adheres to Australian tax laws. And that proper processes are followed to ensure confidentiality and security of sensitive financial data.

It’s also worth checking that the service provider has the necessary knowledge of Australian-specific requirements. Things like GST reporting, superannuation obligations and BAS services.

Outsourcing vs In-House Accounting Australia: Which Option is Best for You

When deciding whether to choose outsourcing vs in-house accounting, there are several factors to consider.

The key to deciding between outsourcing vs in-house accounting is ensuring that whichever option you choose, the business remains compliant with ATO compliance and Australian tax laws.

What Are the Legal Limits of Outsourcing Accounting Work?

While there are many legally outsourced accounting services Australia, there are some legal limits to outsourcing accounting work.

Certain high-level financial activities, such as signing official documents, holding a directorial position or making financial decisions on behalf of the business, must be handled by internal personnel or a registered tax agent. For example:

• Directorial Duties: A company secretary or internal employee must manage corporate governance, and cannot be outsourced.
• Tax Responsibility: While businesses can outsource tax return preparation, the ultimate responsibility for compliance lies with the business owner.

Businesses must ensure that they are outsourcing accounting work to providers who are fully compliant with ATO rules for outsourced bookkeeping and other legal requirements.

The business owner remains ultimately responsible for ensuring all outsourced accounting services comply with Australian law.

FAQs

1. What accounting tasks are legal to outsource in Australia?

Most bookkeeping tasks, BAS services, payroll and tax return preparation can be legally outsourced in Australia, as long as the outsourcing provider is registered with the relevant authorities.

2. Can I outsource tax returns offshore legally in Australia?

Yes, tax returns can be outsourced offshore legally if the provider is a registered tax agent and adheres to ATO compliance and Australian tax laws.

3. What are the legal limits of outsourcing accounting work in Australia?

While bookkeeping and other accounting tasks can be outsourced, key duties such as signing official documents, corporate governance and ultimate tax responsibility must remain with the business owner or a registered agent.

4. How do I ensure ATO compliance when outsourcing accounting services?

The outsourcing provider must be registered with the ATO and understand Australian tax law. They also need to follow all compliance requirements including BAS services and tax return filings.

Conclusion

It’s clear that outsourcing accounting services in Australia can provide significant benefits, from cost savings to accessing specialised expertise. Legally outsourced accounting services Australia can include bookkeeping, BAS services, payroll and tax return preparation.

However, businesses must ensure compliance with ATO outsourcing rules for Australian accounting firms and other legal guidelines..

For businesses considering outsourcing accounting in Australia, it’s important to weigh the benefits of outsourcing vs in-house accounting and ensure that any third-party provider follows CPA outsourcing guidelines.

With careful planning and the right partners, outsourcing can become a valuable strategy for businesses looking to grow and succeed.