Rustling through piles of self-managed super fund (SMSF) documents can be frustrating and time consuming, but in this ‘electronic age’, is it feasible to have a paperless fund? And can it be audited?
The simple answers are yes, and yes.
How to go paperless
The most important component of the paperless SMSF is the use of administration software that provides document management, storage and electronic delivery. The software needs to allow documents to be easily attached to transactions and funds.
The first documents required to set up a paperless SMSF are the fund establishment documents. These will include the trust deed, product disclosure statement (PDS), registers and application forms created when the fund was established.
The easiest way to collect these documents is with an automated establishment process that is integrated with the SMSF administration software so that it automatically attaches these documents to the fund ledger. Furthermore, having these documents available on the web provides easy access for trustees, administrators and auditors.
The second set of documents you’ll need include those that support fund transactions, such as broker buy and sell notes, rental statements, dividend statements, distribution statements, supplier invoices, bank statements and year-end tax statements. Your SMSF administration software needs to support both the manual and automatic attachment of these source documents to your transactions.
How to source your documents
Many of these source documents can be obtained by SMSF administrators automatically or through a web request to trustees. Using an integrated contract note service, obtaining dividend and distribution statements direct from registries and using the web to request other source documents from trustees means the process of obtaining most source documents can be fully automated.
Once the SMSF administrator has completed the work for the fund, the next step is to deliver the documents to the trustee and to have the documents signed – digitally! The trustee can view documents on a web portal through a web-based automated document delivery system and sign the documents digitally. Once signed, the SMSF administrator would be notified that the fund is now available for audit.
A paperless audit
The final stage of the paperless SMSF is the audit. All audit work can be completed on screen: audit planning can be documented, work papers prepared and reviewed, checklists completed and the audit report prepared. And because all source documents are already attached to transactions, the auditor can easily view, notate and lock documents.
The benefits
Running a paperless SMSF is possible. SMSF administration software available today provides administrators with the ability to:
- establish SMSFs through a web portal fully integrated with their SMSF administration software,
- attach source documents to transactions,
- collect many source documents automatically,
- request source documents from trustees via the web,
- deliver documents to trustees electronically,
- digitally sign documents, and
- complete an electronic audit.
A paperless SMSF can make life a lot easier for SMSF trustees, allowing them easy access to their paperwork no matter where they are in the world.
The challenge for SMSF administrators is to embrace this new technology and use the technology to make the paperless SMSF a more widespread reality.
Ron Lesh is the Managing Director of BGL [1], a compliance computer software firm.
Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Anyone should consider the appropriateness of the information in regards to their objectives, financial situation and needs and, if necessary, seek advice.