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Writer's pictureJulie Taylor

Getting Your SMSF Clients Ready For the 2024 Financial Year


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It’s not many Accountants or Advisers that want to be looking back at 2023 financial year SMSF transactions in May 2024.


Most would love to have their SMSF clients returns done by Christmas and well and truly before the May lodgement deadline.

 

So how can you change your reality and give yourself some true breathing space to plan in May and June each year (and not be stuck still doing last year’s work).

 

Here’s our top 5 tips:

 

Utilise the software

 

You’re paying a small fortune for SMSF specialist software these days so make the most of it. Set up any bank feeds, data feeds, registry feeds. Set up rules and functionality to code transactions automatically.

 

Set up external systems that help code transactions

 

If you haven’t made sure that all your SMSF member employers (even the related ones) have the SMSF Electronic Service Address recorded in their payroll systems, then you are missing out on being able to externally verify the SMSF’s contribution data automatically. That’s one less query item each year.

 

Dedicate real time processing staff

 

Having staff that are looking at current transactions means you can stay on top of new banks and platforms to be set up for feeds and you can see when a new payroll department has come onboard that needs to be updated with the SMSF ESA.

 

Systemise your Queries

 

Using a checklist to record your Queries in the one place is an easy way to save time. Many SMSFs don’t change a lot year on year so typically many of the queries you have in one year, you will have again in the next year.

 

Help your Clients Streamline their information

 

Letting your clients know that you are happy to receive information as transactions occur via a dedicated email/upload means current transactions can be recorded accurately and you can reduce the number of queries for the financial year.

 

Don’t forget to remind your SMSF clients of these important Year End checks:

 

Review the Investment Strategy

 

The Investment Strategy should be reviewed regularly and updated as needed to ensure that it meets the needs of the members and the SMSF's risk profile. The auditor is expecting to see a strategy that is tailored and specific to the SMSF, and shows how the fund investments meet each member’s retirement objectives and goals and includes a detailed discussion of the selected investment assets that considers risk, return, liquidity, and diversification.

 

Our sister business, Best Practice SMSF, has developed some handy Investment Strategy Checklists that can assist you and your clients – get access here

 

Review Contributions

 

When reviewing contributions, remember that the concessional contribution caps can be different for each member as some members may have access to carry forward contribution caps. The carry forward amount, however, is dependent on their Total Super Balance (TSB) which includes all balances, not just the member’s balance in the SMSF. Check that all the member’s super is linked to their MyGov account so you can see what the ATO have recorded as their TSB. Also check all records with your client to make sure that this balance is correct, particularly in relation to accounts held outside the SMSF.


Other aspects of contributions to consider:


  • If the member is over 67 years of age and wants to claim a personal tax deduction, have they met the work test?

  • Will contributions be received in the SMSF’s bank account by 30 June?

  • Has any member paid any expenses on behalf of the SMSF such as accounting fees or property expenses?

 

Market Valuations & In-House Assets

 

Your clients are now required to value SMSF assets annually. Ensure that you have the Trustees getting up to date valuations as close to 30 June 2024 as they can for all investments, including property and collectables.

 

If the SMSF is carrying an In-house Asset you will need to review the estimated valuations of assets to see if there is any action required to keep the value of the in-house asset under the 5% limit as at 30 June. Be mindful that correcting a compliance breach relating to exceeding the 5% limit can be difficult and, in some circumstances, can only be fixed with the sale of the asset.

 

Cryptocurrency

 

Due to the high-risk nature of Cryptocurrency, SMSF Auditors are understandably nervous about getting the comfort they need to sign off the audit. If your client has gone out and got themselves some Crypto in their SMSF, as their Adviser or Accountant you are perfectly placed to educate them on what the SMSF Auditor will want to see at audit time. This might include:


  • Updated Investment Strategy covering off specific risks

  • Wallets addresses

  • Screenshots of wallet at 30 June

  • Reconciled Tax reports

 

It is important that your clients are aware of what they need to do on or around the 30th June each year.

 

Pension Payments

 

When reviewing pension payments, make sure that the minimum pension has been met or exceeded and received by the member on or before 30 June. Waiting until 30 June to make any required payments may be a costly mistake. 

 

The reduction no longer applies from 1 July 2023 so it will be important to revisit periodic payment amounts so your clients meet their 2024 minimum pension requirements.

 

At Keep It Simple Super we value working with our clients to ensure simple processes and simple outcomes. If you want to avoid complex and costly outcomes for your clients, speak to us today to get access to our award winning SMSF Administration service.

 

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