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With the end of the financial year on the horizon and increased compliance laws on the way, now is a perfect time for businesses to ensure that they have all their ducks in a row.
Increased compliance scrutiny is on the way for Aussie businesses, with the FY2024-25 drawing to a close. Due to this, the Australian Taxation Office (ATO) has dotted down a number of focus areas for businesses moving forward, including work-related expenses, capital gains, and rental income – with non-compliance in these spaces leading to serious contraventions.
“Businesses with inconsistent record keeping, unclear financial workflows, or unpaid obligations are more likely to attract attention,” said Fabian Calle, managing director of small and medium business at SAP Concur Australia and New Zealand
“The ATO has invested in advanced data-matching tools and artificial intelligence (AI) to cross-check reported income and deductions against third-party sources, meaning even minor oversights can trigger audit activity or delays in processing.”
According to Calle, disorganised processes and incomplete information are the root causes of compliance breaches, with basic payroll practices slipping through the cracks.
“Now is the time to close those gaps. Businesses should start by gathering complete records for income, expenses, assets, and liabilities,” said Calle.
“Finance personnel need to go beyond general ledgers and profit-and-loss statements, and carefully review reimbursement claims, subscription costs, software expenses, and travel records. The next step is to consolidate the data to get a single, accurate view of payments, especially if the business has used multiple systems to process payments or expenses.
“It’s important to also check whether claims align with ATO expectations. For example, the ATO has emphasised again that work-from-home deductions must reflect actual usage, not estimates.
“It also continues to highlight common errors in rental income reporting and capital gains declarations. These areas are under close watch, and discrepancies are harder to defend when documentation is patchy.”
The end of the financial year is often a time when organisations are targeted by cyber criminals with tax-themed scams, with the Australian Competition and Consumer Commission (ACCC) stating that Aussies lost more than $152 million to payment redirection scams in 2024 – an increase from $91.6 million the previous year.
“The start of the financial year is the ideal time to step back and assess what’s working and what needs improvement. Delays in approvals, hard-to-produce reports, or unclear spending are signs of deeper process issues,” said Calle.
“Now’s the time to fix them. EOFY is an opportunity for businesses of all sizes to improve how they manage spending, reporting, and decision making. Those that invest in better systems now will be better positioned to grow in the year ahead.”
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Compliance often refers to a company's and its workers' adherence to corporate rules, laws, and codes of conduct.
Kace O'Neill
Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.
