All business owners have their own fair share of financial reporting woes and calculating payments for tax filing can be a nightmare. You may try avoiding this obligation, but it is part and parcel of running a business. You can be faced with numerous obligations as a business owner but you should always keep an eye on your PAYG (Pay As You Go) payment. Just because you have forwarded the payment does not necessarily mean you are off the hook. There will be instances when you need a copy of the payment summary and when it is not available, you will have a difficult time running through the payments you have made.
PAYG has two important tax topics: Pay As You Go Installments or PAYGI and Pay As You Go Withholding or PAYGW. PAYGI refers to the tax installments that business owners make to the ATO. PAYGW refers to the tax you collect from the employees, payees and workers. As a general rule, employers or business owners are required to provide a summary to payees showing the amount withheld and the payment made based on the financial year.
The Importance of PAYG Payment Summary:
It provides a detailed summary of accounting information.
A summary of payment also includes relevant information of each payee. The tax numbers, tax liabilities, salary and earnings can be found in the summary. If the payee needs this information, it is available for access anytime. You may also need this information for generating financial report in the future and you don’t have to spend too much time harvesting this information.
It provides an easier process of filing taxes.
The tasks involved in filing taxes can be long and tedious. Aside from doing all the calculations, you have to make sure that the numbers are correct. You may have to redo the task once the data you encoded are incorrect. If organizing employee and accounting information takes a large chunk of your time, the summary of PAYG payment makes the process a walk in the park. The information you need for filing taxes is already available so you don’t have to enter them manually.
You generate reports faster.
Generating reports will be more efficient when you have a record of the payment summary. The process that used to take hours or even days to complete can be significantly reduced once you have PAYG payment summary. When less time is spent for generating reports, you can pay attention to other tasks without necessarily compromising on the quality of information that is present on your financial report.
Information on the payments made is clarified.
There can be a time when payees will ask for a copy of the payment they made and the payment summary will serve as proof. In case there are payment disputes, all you need to do is to refer to the summary for any clarifications. You can also spot irregularities or incorrect entries if you have a summary of the report. It will also help your payees understand why the deductions were made. When everything is recorded, you can remove any doubt and they are updated for under or over-payment.