BDO’s national leader for superannuation Shirley Schaefer said a large number of her clients now use direct data feeds so that funds can be processed more efficiently.
“One of the first things we check is [if] the bank statement agrees with the data in system and a surprising number of funds have issues,” said Ms Schaefer.
“It’s a higher number than what you would expect. I would suggest that probably 20 per cent of the funds that I’m looking at have some issues with missing information. It might be missing one day, it might be missing transactions off a particular day, sometimes it’s multiple days – it’s all different, there’s no consistency.”
While some providers are better than others in terms of the accuracy of data, she said, this could place SMSF practitioners in a difficult position with the ATO once the new reporting requirements commence and practitioners are relying on this data to be accurate.
“If you don’t actually check back to an actual bank statement, or you don’t have some assurance from the provider that everything is 100 per cent accurate and complete, you may blindly assume that all the data there is correct. You might push the button on your software and spit out an answer and come up with the wrong one in relation to the balance or what amount of money to commence the pension on,” she explained.
Ms Schaefer said the ATO could allow SMSF practitioners a margin of error so that their client isn’t penalised for these errors with data feeds.
“So if it’s out by, say less than $1,000, you won’t be penalised in any way,” she said.
Why should Trustees be forced to change their procedures just to meet the ATO zest for large quantities of data. Trustees should be allowed to have a choice and many I have spoken to prefer to do things the old traditional way they trust and can relate to.
Technology is great when it works but these are early days still. Just look at the recent Woolies disaster where clients were charged twice. Things do go wrong with systems which still need to be thoroughly checked but I suspect humans will undoubtedly make mistakes in not checking feeds thoroughly. Who is going to sort out the mess with the ATO when truck loads of data feeds all get incorrectly reported and who will foot the bill for the ATO fines for misreporting.
$1,000 is nothing. What is the point. Transactions are regularly $20K or $50K. Missing those would be a big deal. I think having a simple amendment facility without penalties regardless of the amount would be a suitable compromise. By simple, I mean actually simple. Not simple like the RBL system. Just to be clear.
We’ve not had the same experience in our business. I can count on one hand the number of times data feeds have ‘failed’ in the last five years.
Typically it’s either human error from the accountants, or something has changed with the feeds provider – for example the account has changed or even the bank branch has closed or re-located.
The majority of SMSF trustees use popular accounts from the big four banks or Macquarie and these feeds are robust and have been tested by more than one large specialist audit business. In addition most feeds provide balance details as well as transactions so if there is an issue, it can be quickly identified and rectified.
It’s 2017 people we need to move away from paper statements as a source of truth!
The data feed won’t be spot on as many transactions are unable to auto load but with a reporting event you need to review that fund and reconcile it I would suggest.
Could have something to do with the platform you use….