Saturday | 22 November, 2008
Small business stuck in rut over GST compliance
Helen Han 04/07/2000 12:01:01

Accounting software maker MYOB was inundated with calls on the weekend from business customers seeking "reassurance" that its software and pricing systems were GST-compliant.

Businesses took advantage of MYOB's extended customer support hours, lodging over 5000 calls and sending 5000 emails to 100 support staff on the weekend, according to MYOB's CEO, Craig Winkler. The majority of calls came from retailers seeking information on how to calculate new software prices under the GST.

"We wanted to make sure our customers had the assistance they needed over the weekend," Winkler said. "Providing service is what it's really about, not just making software."

Small-to-medium businesses sought "clarification" that they had raised invoices correctly, established items on which they could claim wholesale tax rebates, priced products correctly under the GST price shift, and upgraded to MYOB software to ensure accounting systems were GST-ready, Winkler said.

Sybiz, a local financial software company, was hit by higher numbers of GST-related customer calls over the weekend, mostly from retailers. Support staff received 50 GST queries this morning, three times the Monday morning average of calls, according to Peter Lucas, Sybiz's managing director.

Most businesses were experiencing "procedural problems", Lucas said. "They wanted to confirm if they could charge GST on settlement discounts and their products," he said. Like MYOB, Sybiz was also playing business adviser. "We're helping them charge their sales tax claim back," Lucas said.

Bruce McCabe, research director at Gartner, had little confidence in the state of GST-readiness among Australian business, saying it was "not good".

McCabe described all sectors as caught in "frantic" catch-up mode, still making price conversions after the GST came into effect last Friday.

Forty-three per cent of businesses surveyed this year by Gartner said they "wouldn't have everything done", McCabe said.

The retail sector showed slow ramp-up time in making GST-compliant price conversions, according to McCabe. Retailers were more concerned with "getting on with business", therefore "absorbing and simplifying" GST pricing requirements, he said. "Re-pricing all of your products overnight is extremely time-consuming."

IT companies' GST-compliance rated "above average" in Gartner's research. Large, lucrative IT companies invested up to $50 million in overhauling their systems for GST-compliance, McCabe said.

McCabe attributed the lag in pricing and systems changes to a "lack of education" by the Australian Taxation Office. "But it's hard to point the finger at (the ATO)," McCabe admitted, explaining the department was "under-resourced" and therefore unable to respond swiftly to GST queries until, at best, a month after calls had been lodged.

McCabe believed the ATO would be more relaxed in the next few months towards businesses still playing catch-up. However, the ATO would "tighten policing" in the next six months to formalise legislation, he said.

The overhauling of systems under the GST will cost organisations across the corporate, government and small business sector between $3.2 billion and $4 billion, Gartner estimated. The bill accounts for investment in training, software services, human resources and pricing changes.

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