First class SMSF: How Macquarie saves 40% by using SMSF Sorted Pro


When Christina Mainey from Macquarie Business Accounting began using SMSF Sorted by Cloudoffis in 2020, she quickly witnessed efficiency savings of more than 40%.

It’s big news that SMSF Sorted Lite—a core version of SMSF Sorted Pro which includes powerful OCR tools—is now included with Class at no charge. So thousands of SMSF accountants are ready to enjoy similar efficiency gains.

But with a simple upgrade to SMSF Sorted Pro, much more is possible.

Looking at How Christina and Macquarie use SMSF Sorted Pro shows why—and is just the start of the SMSF revolution on its way with a groundbreaking AI engine that offers next-generation accounting features.

Why Macquarie chose Sorted.

Before SMSF Sorted, Macquarie’s accountants were spending too much time on workpapers—especially with the outsourcing of other firms creating price pressure.

Christina knew there were options, but chose SMSF Sorted for the support and integration.

“We were already paperless, and we’d trialled a few options—but Cloudoffis SMSF Sorted was head and shoulders above the rest”, she says.

According to Christina, the time savings are priceless.

“OCR is my favourite because it saves me time as well as the reviewer. Up to 40%—and with the updates and releases we’re expecting that to reach 50% very soon”.

Christina also says SMSF Sorted delivered more than she’d bargained for.

“I knew it was integrated with Class and BGL—but I had no idea how well. It’s more than trial balances—it has 17 reports with all kinds of checks”.

Next generation accounting.

For Macquarie, SMSF Sorted Pro is opening the doors to the next generation of SMSF accounting—with the release of a new AI engine for industry-first automation that removes whole accounting steps.

“The automated wrap statement reconciliation is next level”, says Christina. “Some of our wrap reports are up to 200 pages—so importing them for automatic reconciliation is a game-changer”.

Christina says this kind of automation can often over-promise but not deliver—but not with Cloudoffis and SMSF Sorted Pro.

“With other software you expect things and it maybe doesn’t work. With Cloudoffis, you can believe it—and it just gets better with every release”, she says.

Automation and optimisation.

The Cloudoffis AI is built on strong foundations of automating and optimising day-to-day SMSF accounting.

Because SMSF accountants have their own methods, Sorted Pro includes 8 ‘Excel-like’ workpapers for easily customised reconciliation checks.

Automated push notifications and query alerts keeps workflow moving and save dead time between necessary changes.

But for Christina and Macquarie, the bedrock of automation is the over 21 that standardise compliance checks with automated red flags.

“With observations, it’s great to double-check my work with observations—whether work tests are met, payment summaries done, pensions allocated—it just really helps”, says Christina.

There’s a portal for that.

The unique Cloudoffis portal—which supports the accounting, review and auditing processes alike—is a huge plus of using SMSF Sorted for Christina.

“Our auditors are already using SMSF Auditomation—so we can take full advantage of what’s possible”, she says. “There are fewer queries about workpapers, and we’re using comments to never write anything twice”.

But the portal dashboard offers more than just seamless audit integration—it’s a “great snapshot of how many jobs, how many ready for review”, says Christina.

“We’re cracking down on budget with very high accuracy”, she says. “It just gets better with every release”.

Your smartest upgrade.

Using SMSF Sorted Pro to revolutionise Macquarie’s SMSF accounting, Christina’s not looking back.

“It’s amazing—“I can jump in at night and do a few things, then jump into Class—it’s so easy”.

And on whether the upgrade to SMSF Sorted Pro is worthwhile?

“Anything less than SMSF Sorted Pro wouldn’t be enough”, Christina says.

Book your live demo today or call 1300-979-457.

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Auditomation and beyond: How a family audit business got its time back

SMSF is about choosing today what gets you ready for tomorrow.

For Daniel Surjenko of award-winning SMSF auditors Superannuation Audit Services, moving to the cloud was about creating a better future—for the firm.

“In moving to the cloud, we knew we’d reap the benefits of modernisation—including speeding up our process, sharpening accuracy and creating uniformity”, says Daniel.

“What we didn’t realise is that moving to the cloud would create a better future—for our family.”

In reducing errors, creating flexibility and reducing stress, Cloudoffis gave Daniel and the team more time for living.

“We have more time to be a family,” says Daniel.

Writing on the wall.

Superannuation Audit Services was founded in 1996 by Denise Surjenko—Daniel’s wife—to provide independent SMSF auditing services to public practitioners. Since then, the business has built a reputation based on continued excellence and a personalised, on-shore service.

They’ve also seen the industry change drastically.

“Audit legislation is an ever-changing game,” says Daniel, “Staying ahead of changes is critical—it’s what clients have always relied on us to do.”

It’s one of the reasons Superannuation Audit Services performs over 1200 audits annually and has retained foundation clients for over a quarter of a century.

“When it came to going paperless, the writing was already on the wall,” says Daniel, “Well before COVID, we’d noticed the digitisation of our industry—we knew we needed to act or face getting left behind.”

For Daniel and the team, improving efficiencies was critical—staying paper-based was restricting their growth.

“In addition, our clients were going cloud-based,” says Daniel, “We didn’t want to be the bottleneck—we had to integrate or wave goodbye.”

Choosing the right software.

Moving to the cloud was not something Daniel took lightly.

“We had reservations about automation in general,” says Daniel, “Our process and filing system was watertight and built to last—we needed absolute confidence that our software could match that.”

Initially, Daniel considered building their own software.

“While on the face of it, it seemed like the better route would be to build software in-house, giving us complete ownership over it,” says Daniel, “But we quickly realised the costs and risks involved.”

According to analytics firm Gallup, custom IT projects overrun by 27% on average and ‘one in six projects had a cost overrun of 200% on average and a schedule overrun of almost 70%.’ ”

“We understood how damaging inaccurate cost estimations and project overruns can be”, says Daniel, “The ease, security and transparency we’d get from choosing to buy vs. build made the decision a no-brainer for us.”

Choosing the right partner.

Having decided to buy, it was time to find the right partner. Daniel interviewed multiple SMSF software providers, even flying to Sydney to personally meet with them.

“Choosing to work with Cloudoffis was a very considered decision,” says Daniel, “They had the best value to service combination, a second-to-none user interface and user experience, and enterprise-grade security.”

“We also had access to their key staff and we trusted them. The exceptional training they provided for our staff meant no one was left behind.”

The future doesn’t wait—Cloudoffis’ plug-and-play solution took Superannuation Audit Services from on-boarded to auditing in a matter of weeks. Like Superannuation Audit Services, the Cloudoffis team is based in Australia. It means businesses and their clients can access personal support from an expert local team—on-demand.

“We went paperless—without the learning curve,” says Daniel, “Everyone’s loved it.”

Prepped ahead of a pandemic.

With young kids at home, Daniel and Denise often worked remotely—and encouraged their staff to do the same.

“Before Cloudoffis, we were still running around with stacks of paperwork,” says Daniel, “Once we moved to the cloud, we could do everything securely online—from document organisation to receiving files, reviewing work, sharing jobs and populating reports. We were well ahead of the technology curve.”

When COVID hit—and competitors scrambled to stay afloat amid world-wide lockdowns—Superannuation Audit Services didn’t miss a beat.

“We had clients messaging ‘are you still around,’ ” says Daniel, “and we were like ‘nothing’s changed here!’ ”.

In fact, Daniel and the team were helping their clients get on the cloud too. “Cloudoffis offers training for clients in how to use their portals,” says Daniel, “Going that extra mile has kept us highly competitive.”

More time for living.

Going paperless has shown Superannuation Audit Services the way of the future.

“We can standardise every job—no matter the source. We have uniformity across all staff members—making reviewing easier. We’re freed up to do marketing because we’re not drowning. And we’re quicker—with a faster audit process there’s just more time for everything,” says Daniel.

That includes being a family.

“We’re less stressed and have a better lifestyle. Despite lockdown, we’re able to stay fit—we go to the park at lunchtime with the kids and have time to help them with school and assignments,” says Daniel.

“With SMSF Auditomation we got our time back, achieved growth and are closer than ever as a family.”

There’s also excitement about what’s possible with new Cloudoffis AI features in SMSF Sorted for Accountants—which will make the workflow for Auditors even more efficient..

“We’ve seen Cloudoffis evolve—they’re consistently reducing pain points and we couldn’t be happier,” says Daniel, “Compliance review still has a manual, human side—so we’re excited about the possibilities from new releases on the administration and transfer to audit side, like AI-driven data matching, which could transform our efficiency.”

Consistent, compliant and automated, SMSF Auditomation leverages tech to free you from the grunt work—leaving more time for what counts.

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Book your live demo today or call 1300-979-457.

How pandemic breakout affected the business & brought a breakthrough

It’s a trying time for businesses.

The global economy is reeling from the effects of Coronavirus, impacting the livelihood of people worldwide.

In Australia, auditing and accounting businesses walk a tightrope—on one side, remote work has become a safety challenge-on the other, there’s no margin for error in SMSF accuracy and compliance.

With the help of Cloudoffis, SMSF business leaders-like hmh Advisory’s Sarah Molinaro-have been able to innovate amidst adversity.

Cloudoffis was built for SMSF to be ready for tomorrow-so hmh Advisory used it to stay in front of the remote work revolution.

For over a decade Sarah ran the SMSF department at hmh Advisory-in their physical offices of course. “When lockdown hit, we had to adapt fast,” she says.

“From one day to the next, our entire SMSF team was confined to home. Our paper-based accounting audit system was great—but it wasn’t going to cut it during the pandemic.”

Poised for paperless.

As a specialist, Sarah came to hmh Advisory to run the SMSF department. She’d re-designed and re-built their paper-based systems for very high standardisation. Sarah supervises a team of 3 to 4 staff and personally reviews every fund before it goes to audit.

She’d been looking at going paperless—but was wary of risking quality, and wary of the initial admin investment.

“We have over 240 funds, from $100k to $15M—with about half of our clients using our financial planning services. There’s high complexity around member balances, pensions, investments such property and options trading”.

“We’d seen Cloudoffis at the SMSF Association conference in the Gold Coast”, says Sarah.
“We knew from using their SMSF Auditomation product that they offer great support—but we feared the admin burden, and had some older staff who were unsure about the technology side”.

Pandemic plug and play.

Then lockdown hit—and software was a non-negotiable.

Remote work was suddenly required. After APES-110 industry changes, hmh found auditors using Cloudoffis SMSF Auditomation, and made the jump to using Cloudoffis SMSF Sorted for the accounting side.

Fears of too much admin were soon blown away.

“We were up and running in a matter of weeks,” says Sarah, “The tools worked seamlessly with Class and our existing software, and the onboarding process was smooth—even for hesitant members of our team.”

It helps that the Cloudoffis team is based in Australia—giving businesses access to all the local support and guidance they need to succeed. We also run on Amazon Australia servers covered by Australian security law and protocol.

“No other provider came close to giving us the reassurance we got from Cloudoffis,”
says Sarah, “Having support—and our data—here in Australia was priceless.”

Remote and flexible with the cloud.

For Sarah and her team, opting for cloud SMSF software meant they could continue to service their clients even while working from home-at the same standard and quality they’d built their reputation on.

“We have team members  working in different locations. With a secure digital ecosystem, we can confidently deliver anywhere and anytime.” says Sarah, “Working remotely has been a big success.”

Digital transformation might be a necessity during the remote revolution. But the future of SMSF isn’t just about today. At Cloudoffis, it’s about getting ready for tomorrow. Our SMSF tools leverage technology to transform underlying processes and supercharge SMSF businesses.

“Cloudoffis technology reduces time spent on routine, repetitive tasks, resulting in a much more efficient end of year process,” Sarah says, “It improves profitability, efficiency and allows the team to better leverage their value elsewhere.”

Ready for tomorrow.

The pandemic has changed the way we all do business.

For Sarah and the hmh Advisory team, it’s shown them the way of the future.

“We can work from anywhere. We’re saving hours per fund. There’s no double handling.
And we have an excellent workpaper system that’s easy to use,” says Sarah.

There’s also a buzz about what’s possible with the new Cloudoffis AI features.

“We use BT Panorama for financial planning clients —we’re keen to try the new features like AI driven, automated platform statement reconciliations—they could be a gamechanger for our efficiency”, says Sarah.

Cloudoffis features have helped hmh go paperless, optimise processes and enjoy an
end-to-end workflow. It’s transformed their ecosystem into a streamlined, automated,
well-oiled machine—all in the midst of a pandemic.

Sarah’s advice to SMSF accountants and administrators poised to go paperless with Cloudoffis?

“Just do it,” says Sarah. “More and more  of our clients are sending documents electronically,
-it’s the new normal and Cloudoffis helps you get ready for it”.

The future knocks on every door—at Cloudoffis we’re here to help you answer.

Book your live demo today. In 15-mins, our support team will show you how to get your SMSF business ready for tomorrow..

A Guide to Transfer Balance Account Reports for accountants & auditors

Auditors and accountants alike have to adapt to the new legislation on SMSF reporting. There have been significant changes in SMSF processing, and it’s crucial to keep up with them.
In July 2018, a new framework for SMSFs was introduced which requires certain events to be reported to the Australian Taxation Office (ATO). Event-based reporting is a new obligation SMSFs need to fulfil.
SMSF annual returns are still mandatory. However, this new reporting style aims to capture information about other events as they occur. In certain cases, SMSFs have to file transfer balance account reports (or TBARs).
There is now an increased need for real-time accounting. TBARs may need to be filed at any time during the financial year. Additionally, there’s a strict time limit on TBAR reporting.
Hence, the SMSF industry is going to have to make some fundamental changes. Accounting and auditing will have to become faster and more cost-efficient.
When you file a TBAR depends on both the event and the members of the fund. In many cases, you’ll lodge within 28 days of the end of the quarter. Some TBARs need lodging sooner, whereas you only need to lodge others annually.
What about auditing?
TBARs give auditors a new set of challenges. They’re still invaluable to the process, but the use of TBARs means they have to adapt to a new environment.
Let’s overview the top facts about TBARs, as well as the ways that auditors will have to update their practices.

What Is a TBAR?

The ATO introduced TBARs to help them with a specific issue. Previously, the ATO had to wait for extended periods to receive data about how much people have allocated across the various phases in their superannuation funds. In some cases, they have to wait for almost 11 months to receive data about SMSFs.
TBAR allows the ATO to track a member’s significant events and key transactions during retirement phase.
The ATO has applied a transfer balance cap of $1.6 million to this retirement phase. TBARs allow you to track a transfer balance account to work out if there’s space for further activity. It also highlights if you’ve exceeded the cap through recent activity.
TBARs allow the government to track large transfers. SMSF members now have their total superannuation balance monitored too. This is the sum of all their accumulation and retirement phase superannuation interests across all their accounts and funds. If it goes over $1 million, the SMSF has to lodge more frequently.

Which Events Require TBARs?

It’s crucial for accountants to keep track of each SMSF member’s transfers and superannuation balance.
Accountants must report key events that alter an SMSF member’s transfer balance. Check the ATO’s guide here. A short summary follows:

  • The Type and Value of Pre-Existing Income Streams
    Details of pre-existing income streams being received on 30 June 2017 that will continue to be paid or will remain in retirement phase on or after 1 July 2017. It’s not necessary to file a TBAR when the interest from an income stream has been exhausted.
  • The Type and Value of Death Benefit Income Streams and New Retirement Phase Income Streams
    Reversionary death benefit income streams should be filed starting from the date of death. Note that it’s not necessary to file a report upon the death of an SMSF member
  • New or Re-Financed Limited Recourse Borrowing Arrangement (LRBA) Payments
    ‘New’ refers to borrowing arrangements entered into on or  after 1 July 2017 and the payment results in an increase in the value of the member’s interest that supports their retirement phase income stream.
  • Personal Injury Contributions
  • Commutations of Retirement Phase Income Streams that occur on or after 1 July 2017 or Compliance with a Commutation Authority 

There are some exclusions to consider in the reporting too. For example, accountants don’t have to worry about filing a member’s APRA fund interests as the funds will report these. Information filed directly via a Transfer balance event notification form (NAT 74919) also doesn’t need to be included in the TBAR.

How Does TBAR’s Introduction Change the Compliance Process?

It was necessary to file all information about pre-existing streams by 1 July 2018. After this date, TBARs cover new events.
If every SMSF member has a total superannuation balance lower than $1 million, the TBARs aren’t urgent. They can simply be filed once a year along with the Annual Return.
But this changes if any member has a total superannuation balance of over $1 million.
In this case, the SMSF has a new obligation. When an event occurs, they have to file a TBAR within 28 days after the end of the quarter. Events apply to all members, including members whose total superannuation balance is under $1 million.
Let’s overview the main points.

  • The ATO will notify you in the event that you exceed the $1.6 million cap. It will ask you to rectify the event.
  • There is no legal limitation on the superannuation balance of SMSF members. But if anyone’s total superannuation balance goes over $1 million, a TBAR must be filed.
  • The ATO now has more insight into all SMSF income streams.
  • When you file depends on the fund’s composition and each member’s total super balance. As mentioned previously, you’ll often file within four weeks of an event. However, there are plenty of exceptions. For example, in the case of commutations, the SMSF may have only ten days after the end of the month to file a TBAR.

This is a new piece of legislation, so we may see changes made over time, particularly in regards to caps. For example, the $1 million superannuation criterion might be re-evaluated over time.
Furthermore, the Treasury has a new proposal to change the audit cycle from one year to three years. If the measure passes, it will commence on 1 July 2019.
However, the idea is still under much debate. Interestingly, this proposal sits at odds with the value and oversight that event-based reporting provides.
With longer audit cycles, the ATO’s level of oversight would decrease. This might undo some of the positives that come with TBARs.

Your Responsibilities

When the July 2018 deadline came around, many SMSFs failed to comply with the new legislation.
In most cases, the failure came from a muddled understanding of the rules. Some SMSF accountants didn’t understand the proper treatment of income streams under the new legislation.
Some of the clients failed to comply with the transfer balance cap. This often happened because they failed to inform their accountant about their other super fund balances. People simply didn’t know which data was relevant.
Since July, various SMSFs struggled with sending up-to-date TBARs. Many accountants had to get used to the new software in order to generate these reports and have had to change their practices to ensure data is up-to-date and accessible.
As an auditor, ensuring you have a solid understanding of TBAR reporting is one of your responsibilities. This means you have to have clear oversight over  all of your client’s income streams, other key events and any breaches of the transfer balance cap.

What Does This Change?

With these changes, the accounting and auditing process has to become more proactive and the access to up-to-date data is imperative.
SMSF professionals have more data to go over and processing frequency will need to increase. However, your main task lies in understanding the compliance and data requirements that will allow you to support the fund under this new framework.
Many auditors hesitate to rely on data feeds. But if you find feeds that have a reliable source and structure, you won’t compromise the quality of your work. Data feeds can be secure and almost entirely error-free.
At the same time, auditors will need to have a more active relationship with their clients. Being able to source reliable data and communicate regularly with clients  can make it easier to keep on top of your requirements, identify areas of focus, and help to better support the SMSF with the new compliance regime.

The Final Word

TBARs whilst complex, have made a positive contribution to the industry in providing more visibility and transparency of key information. Clients and their SMSF professionals  are still in an adjustment period. But the reporting process should soon become routine.
It’s impossible to keep up with these changes without altering your process. Becoming well-versed in data feeds and understanding what online access to data and reporting you can receive is one of the ways that can assist Automation enables you to more easily and cost effectively identify areas for focus.
But there are many other ways to improve your processes. At Cloudoffis, we offer a variety of industry-specific innovations. To learn more, get in touch with us any time.

Anything that you wanted to know about Auditing Investments platform

Auditing an investment platform can present some challenges. Here, we tackle some of the biggest questions that you may have about this task.

There’s a trend among modern investors to make use of investment platforms and the efficiencies they can offer. This presents some interesting challenges to auditors and accountants. Each investment platform comes with its own set of features and reporting. You have to learn about these if you want to carry out audits with ease.
Furthermore, you have to learn how to work within the confines of the platform itself and understand the tools available to you. Failure to do so could lead to you struggling to find the key information needed for the audit.
Investment platforms aren’t something that you can avoid either. The rise in popularity of managed accounts has led to more people using platforms to help manage their investments. They allow users to oversee their accounts and gain transparency. This makes them very attractive to investors at all levels.
What you may not realise is that investment platforms also offer tools to accountants and auditors.
This article examines managed accounts and their relevance to investment platforms. It also looks at what investment platforms offer to accountants and auditors. Plus, it examines whether you can rely on data feeds when auditing these platforms.

What is a Managed Account?

It’s crucial that you understand what managed accounts are. After all, it’s their rise in popularity that has led to more of your clients using investment platforms.
With a managed account, each investor has direct or beneficial ownership of the individual underlying investments. They then hire a professional manager to oversee the investment portfolio on their behalf.
This is the key difference between managed accounts and managed funds. With a managed fund, the investor has a share of a pool of assets via issued units rather than direct or beneficial ownership of the underlying investments.
The individualised aspect of managed accounts is what has made them so popular. Using them allows the owner to tailor their investment strategy to their own goals. They allow for greater ease of portfolio management, which results in saved time. They also provide access to greater transparency through professional management, as well as more comprehensive reporting.
Often, an investment platform will be used to deliver or enable managed account services.  
Investment platforms offer a good access point to managed accounts. This is because they offer a very efficient method of reporting on transactions and managing the investment. Hence, as managed accounts gain popularity, so too do investment platforms.
There’s another important point to make here. You may have to audit more than one managed account when auditing the output from an investment platform. Managed accounts are only one type of investment that these platforms offer and clients can have numerous managed investments. Others include fixed interest, equities, and cash investments. Investment platforms also generally offer access to managed funds.
There is an increasing trend towards using investment platforms that looks likely to continue. This means you’ll have to audit the outputs from more investment platforms more often as time goes on.

What Can an Investment Platform Offer an Auditor?

This trend towards investment platforms can seem like a scary proposition. While most auditors have worked with the outputs from platforms before, there’s an issue of complexity to consider. Managed accounts and other investment types make the auditing process more difficult. Their increasing prevalence means that auditors need to adapt.
The good news is that many investment platforms offer an array of features. These features often benefit auditors and aim to make it easier for you to do your job.
These features include the following:

  • Direct access to investment information for accountants and auditors. For example, some investment platforms can offer you access to live reports. This gives you an up-to-date picture of your client’s finances and actions. Better yet, these reports can often complement the end of year reports received and provide more detail. They cover every aspect of the transaction. Plus, they’re often automated. This cuts down on issues related to human errors.
  • Access to audit reports issued for the investment platform. The issuing of these reports allows auditors to rely on the year end data that the platform produces. The reports also offer greater transparency to auditors, clients, and advisors.
  • You may have access to data feeds if the platform supports them. In fact, many platform providers have introduced data feeds into their offerings that cover all investment types. These feeds provide greater automation of data entry and can provide greater transparency around the underlying transactions that the client undertakes.

It’s also important to remember that each investment platform offers different features. These are only a couple of examples of what the platforms provide to accountants and auditors. Your client’s platform may not have all these features. Or, it may have extra features that can provide you with even more help.
These differences affect your auditing approach. They call on you to learn about the specific features that a platform has to offer.  But taking the time to do this usually leads to you saving a lot of time later on.

Can I Use Data Feeds?

The use of data feeds when auditing investment platforms is a contentious issue.
On one hand, some platforms don’t yet have the required functionality. The use of feeds doesn’t come as standard across all platforms and the treatment of different investment types (particularly managed accounts), differs across the software consuming the feed. That’s not to say you should automatically not use feeds. You just have to be aware of the source and any limitations, as you do with any feed that you use.
But things have started to change. Investment platforms have started to evolve their feeds and many include tools that offer greater support to auditors and accountants who use the platform’s data.


It’s crucial that auditors come to grips with the evolution of investment platforms. The popularity of managed accounts has led to more people using them. You need to adapt to the greater complexity of the investments that people oversee using these platforms. You also need to know about the new tools that they provide in regards to accessing up to date data and providing online access to platform users.
The key lies in understanding what these platforms have to offer. You have to take full advantage of the resources that the platforms provide.
This may require some research on your part. However, there’s a strong payoff. Accessing these tools can save you a lot of time during the auditing or accounts preparation process.
Of course, using a good audit platform can speed up the auditing process further. That’s where Cloudoffis can help.
Cloudoffis is an automated SMSF audit solution that allows for even greater efficiency.
Arrange for a live demonstration with our team today. With Cloudoffis, you can make SMSF audits more efficient than ever before. Simply schedule your demo on the form below. 

Change in audit proposal leads to domino effect for new solutions

If enacted, from July 2019, some SMSFs may qualify for the three-year audit cycle. This change would lead to a domino effect of new struggles and new solutions.

Everyone in the industry is discussing this proposed change to the audit cycle.
The 2018-19 Federal Budget includes the three-year SMSF audit proposal. The idea is to reward SMSFs that have kept good records and a history of compliance. Instead of getting audited annually, these SMSFs would go on a three-year auditing cycle.
According to the Treasury, this would reduce the amount of red tape that SMSF trustees have to deal with. However, the changes to the auditing industry would be significant.
What consequences will SMSFs and auditors have to deal with if the proposal passes? How will it alter established auditing practices?

The Proposal

Let’s look at the particulars.

1. When Does the Proposal Go Live?

This proposal goes into effect from 1 July 2019 if passed. For the moment, we don’t know the exact audit year it would apply to and whether there would be transitional arrangements.

2. Which SMSFs Would Be Eligible?

It’s not clear yet how many SMSFs would be able to switch to three-year audit cycles. The criteria are:

  • Three consecutive years of clear audit reports.
  • A history of timely SMSF Annual Return (SAR) submissions. It’s not yet decided what this means. It might be enough that the SMSF has no outstanding SARs currently. SMSFs might qualify if they haven’t had any late SARs in the past three years. It’s also possible that only SMSFs that never submitted a late SAR would be eligible.
  • Certain key events will influence the timeline of the three-year audit cycle. If such an event occurs, the SMSF will be audited every year since its last audit, and the cycle will restart. Events include the addition, removal, or death of a member. If a member commences a superannuation income stream for the first time, the SMSF will have to be audited. LRBAs and investments from a related party would also qualify as key events.The eligibility will be based on self-assessment by SMSF trustees. However, there’s a real chance of erroneous self-assessment. If the ATO determines there’s a mistake, an audit will be necessary. The ATO might also take additional action.

3. Where Can You Discuss This Proposal?

The consultation period for the proposal ended on 31st August 2018. That being said, the Treasury received substantial feedback on the proposal from those within the industry.

4. Why Was This Measure Proposed?

In theory, SMSF trustees would have lower administrative costs as a result. There is a chance that the delays in SAR submissions would go down. The main goal is to ease the compliance burden on SMSFs.

5. Will the Proposal Affect Other Legislation?

This proposed change seems to be at odds with some new regulations.
The introduction of TBARs and event-based reporting has had significant benefits so far. The industry is now moving to more real-time processing. This allows for greater transparency and oversight. Some speculate that the three-year audit cycle would cause this oversight to plummet.
The Treasury’s proposal is also in contrast to the main takeaways from the ASIC Report 575 SMSFs: Improving the Quality of Advice and Member Experience.
Now, let’s look at the main consequences for SMSF members, accountants, and auditors.

The Effects

The industry will change in various ways if the proposal passes. None of these changes are beneficial to auditors. Most of them will have a negative impact on the SMSFs as well.

Auditing Becomes More Difficult

This proposal would make it more difficult for auditors to conduct comprehensive and accurate audits. Three-year-old data would be considerably harder to track down.
Some institutions may not maintain old data. In some cases, the SMSF may have used multiple accounts or software packages during a three-year period. This can make accessing reliable data more challenging and may present hurdles when trying to access supporting documentation. Auditors will also have far more data to analyse. This means that the time necessary to complete an audit will increase.

Auditors Will Have to Change Their Workflow

Currently, auditors have a steady workflow and increasingly better access to more timely data.But the three-year audit cycle will undo these benefits. As audits become less frequent, the workflow will fluctuate a great deal. Furthermore, the cycle will case issues with data and document access. It may also have an impact on how knowledgeable an auditor is in regards to their client and their circumstances.
Many audit firms will have to make changes in staff and workflow. The structure of the industry will change. Since the number of businesses specializing in SMSF auditing will go down, the fees are likely to increase. The increased workload will also have an effect on fees.

SMSF Trustees Will Have Less Guidance

At the moment, trustees rely on auditors for guidance as well as oversight. In many cases, non-compliance happens by accident.
In the absence of yearly audits, some SMSFs may opt for regular ‘health checks’. In other words, they would hire auditors to do a high-level review at the end of each year.
This health check would be less comprehensive than the audit at the end of the three-year cycle. But could still be the best option for SMSFs that want to avoid accidental non-compliance.
Note that the check-ups would be an additional cost for the trustees. Between that and the increased auditing fees, it’s not likely that SMSFs will actually save on administrative costs in the long term.

The Penalties Will Become Higher

The longer timeframe may make it considerably more difficult to rectify non-compliance issues. When problems stay undetected for a long time, SMSF trustees have to pay higher penalties.

The Eligibility Criteria Can Lead to Problems

As discussed above, SMSFs would self-determine whether they qualify for the three-year audit cycle.
For now, there are no guidelines for monitoring this. The key events that reset the cycle might go unnoticed. Trustees might have to deal with extra penalties and complexity if they misjudge their eligibility.

The Timing of the Audits Is Unclear

There’s still speculation over who will handle the timing of these audits in practice – the auditor, the trustee, or the ATO?
This is one of the main sources of ongoing discussions. Who will assume the burden of determining exactly when the audit will take place?

New Challenges Related to Auditing and Accounting Software

As the cycle changes, auditors and accountants will need software updates to accommodate the changes and their new workflows. There will be changes in both cloud audit and administration software. This adds further cost to the broader SMSF industry.
Additionally, there has to be a learning period for the new software, implementation of integrations and designing new workflows. This makes the end of the first three-year cycle especially chaotic.

How Can Auditors Stay Afloat?

With triple the amount of data to audit and increasing complexity, you can’t avoid automation.
There are some other ways that automation can make auditing more cost-efficient. With these solutions, it may be possible to keep workflow at a manageable level. Cloud-based software integrations and new automation tools will make it easier to manage the altered workflow. The software industry will adapt to create packages that support auditors and accountants. These solutions will likely involve the use of new workflow models. These will ensure the automation and collaboration benefits still get delivered under the new framework.
The health checks mentioned above would maintain the active relationship between auditors and their clients and would provide a new way to continue providing guidance to SMSF trustees.

A Final Word

Businesses that focus on SMSFs have had to go through significant changes lately.
With this proposal, the changes would be self-contradictory. SMSFs are still subject to increased oversight in the form of event based reporting. But with longer audit cycles, this oversight becomes more diluted. The consequences for non-compliance would be more severe with the delay.
Most auditors hope that this proposal will never pass. But if it does, there are ways to adapt to the change.
For the moment, the best way to prepare is to start improving your productivity. Find solutions that offer streamlined access to documentation and accurate data. In particular, you must look for a solution that integrates well with other cloud-based solutions.
If you want to learn about the ways automation can make your work easier, contact us at Cloudoffis.

Data feeds are time-saver, but all data feeds are not equivalent

The purpose of data feeds is to allow for the automation of data entry. Hence, data feeds are a time-saver. But there are differences between data feeds that auditors have to take into account.

Data feeds are a divisive topic among SMSF auditors.
A data feed is an automated process of receiving data from a data source. Using data feeds can save an auditor a great deal of time and effort. It also reduces the administrator’s workload.
The upsides are obvious. Relying on data feeds lets you go over more information, which can result in more comprehensive audits. The feeds also reduce the time needed to perform your analyses.
This is a competitive industry, and auditors need every advantage they can get. Hence, it’s important to make your audits as efficient as possible.
However, many auditors dislike using data feeds. They do not trust the accuracy of these feeds. Many believe that the electronic delivery process is not secure enough. There’s also a possibility that processing and technological errors may occur. This has an impact on the integrity of the data.
All of these concerns have merit. But you should consider the facts before you discard data feeds from your auditing process altogether.
It’s crucial to recognize that there are different kinds of data feeds. Some of these are poorly rated, but others can be extremely useful and trustworthy. Once you know what to look for, it isn’t particularly hard to tell the difference.

The Reasons Why You Can’t Treat All Data Feeds the Same Way

While they’re changing the face of the industry, data feeds are still a mystery to some auditors.
But with the introduction of Transfer Balance Account Reports (TBARs), data feeds will be increasingly used to provide up-to-date data. This means more auditors will need to consider how data feeds can be incorporated into their processes.
So, how do you know where to place your trust? Let’s look into the differences in different data feeds.

1. They Come from Different Sources

Using data feeds simply means getting your data electronically transferred from the source. Each institution (e.g. bank, broker, or wrap) has its own data feed setup. The quality of these sources varies.
Here are a few factors you should take into consideration:

  • How does the institution source the data that is coming through your feed?
  • What is the format of the data feed?
  • Does the format impact the accuracy of data treatment?
  • Does the feed include a daily reconciliation of transactions?
  • When you set up the feed, do you also get access to historical transactions?
  • Is there a chance of someone manually altering the data at the source?

Some sources have trustworthy and robust feeds. But always look into the data source before you decide how much to trust your feeds.

2. There Are Two Different Kinds of Data Feeds

The two types of data feeds are as follows:

  • Direct-Connect Feeds

When a direct-connect feed is set up, the data comes directly from the source. This happens via an encrypted link. There are no third parties involved in this process.
Since direct-connect feeds are purpose-designed, the format of your data should suit your needs. These feeds are authenticated, so you can be sure the source is valid. Additionally, you can monitor and track these feeds on your own schedule.
Direct-connect feeds can automatically process income entitlements. Instant tax statements can even be set up for some of the institutions your clients are working with. With direct-connect feeds, you can also see historical transactions.
If you’re worried about consistency, direct-connect feeds have you covered. The process is automated and while errors might pop up on occasion, it’s unlikely data will stop arriving altogether as it can’t be intercepted or altered.

  • E-mail-Scraping and Screen-Scraping Feeds

This is the more affordable alternative for providers. However, scraping feeds aren’t as reliable as direct-connect feeds.
Here is how scraping feeds work: the source sends emails to a third-party intermediary. The intermediaries are data aggregation services which prepare a feed based on the emailed data. This process is called scraping.
The scraped data can be sourced from the body of the email. It can also come from the attached PDFs. In either case, errors can happen. For example, the computers may not be able to read the data formatting in the PDFs.
How do errors get resolved? The intermediary has to repair them manually.
So while the scraping itself is automated, there can be delays. There is also a real chance of data loss. It’s also easy to see how this can compromise the security of the data.
You also don’t have authentication in place when your data feed uses scraping. There’s a chance the initial data came from a false source.
Additionally, consider the risk of interception. When this happens, there’s no guarantee that you’ll notice the data is compromised.

3. Some Data Feeds Come with ASAE 3402 Certification and Others Don’t

As an auditor, you require first-hand confirmation. Second-hand data cannot typically be relied upon.
Some data feeds come with certification based on the Auditing and Assurance Standards. The ASAE 3402 (Assurance Reports on Controls at a Service Organisation) certification helps auditors to place reliance on the feeds based on the assessment of the design and effectiveness of the controls in place.
A feed can only receive this certification if there are measures in place to minimise data errors. When errors do slip in, there are rectification steps you can rely on. The certification also helps auditors to understand how the data has been sourced and gain comfort that it was free from manual interception.  

Why You Need to Use Data Feeds

Once again, TBARs are changing the way SMSF administration and audit work is approached. TBARs require up-to-date accounting, and data feeds are a key part of that. Automating this process makes the accountants’ lives much easier.
If you’re an auditor, data feeds give you a more comprehensive access to data confirmation. But it’s very important to stay up-to-date with the various feeds.
Over the past few years, auditors have been under increasing fee pressure and it’s becoming very difficult to operate  at these competitive prices and maintain a quality audit.
The only solution is to speed up the data confirmation process. Hence, you should make data feeds a part of your testing procedures. You can do this as part of a wider move towards automation that includes the use of data feeds in your testing procedures. In fact, this is key to operating successfully in this environment.
Always check whether the source of your data is verified. Make sure you have a clear idea of what happens to the data on its way to you. Remember that you don’t have control over what happens to the feed. Verification is a mark of trust that means you can rely on the feed.

The Final Word

With changing legislation, how to best incorporate data feeds and automation into the SMSF life cycle is  becoming a key discussion topic. It’s an important area for both auditors and accountants. If you want to stay afloat, you cannot avoid making use of automation.
Incorporating data fees into the auditing process helps you to save huge amounts of time. Moreover, it can help you to identify issues that need further attention.
How else can you automate your work?
Cloudoffis can help you complete cost-effective and accurate SMSF audits. The platform lets you cut down on the time spent on your audit process by as much as 40%.
With Cloudoffis, you can download data directly to the platform from leading SMSF software such as Class and BGL.
Find out more about our cost-effective solutions, schedule a live demonstration with our team today on the form below.

OCR technology in SMSF Audits. What is it and why it’s a breakthrough?

OCR technology is the next big thing in SMSF audits. To understand why, you need to know what it is and how it can help you.
Every so often, a new technology comes along that has the potential to disrupt an industry.
Take the printing press as an example. Prior to its invention, printing was a costly process, both monetarily and in terms of labour. Type parts broke down quickly and every book needed many work hours to come to fruition.
The creation of the printing press changed all of that. Joseph Guttenberg leveraged his knowledge of metallurgy to create more durable types. His press allowed for mass printing of books. This quenched the thirst for literature from an increasingly literate population. The invention of the printing press also created a shift away from the handwritten texts of old.
You may wonder how all of this applies to your auditing work.
Today, there’s a similar shift in auditing as there was in literature so many centuries ago. The industry is moving away from the manual processes that have served it so well for decades. The introduction of technologies like Artificial Intelligence (AI) signals a shift towards greater automation.
However, it’s Optical Character Recognition (OCR) technology that may have the most disruptive effect. This technology increases efficiency tenfold, allowing you to carry out more audits in less time.
To understand why, let’s look at what OCR is and what benefits it has to offer auditors.

What is OCR?

OCR allows you to convert your documents into recognisable data. This includes everything from physical documents to image files.
The key is that OCR creates searchable and editable data.
For example, imagine that you have a physical contract from a client. You can scan that contract onto your computer. However, this creates an image file that you can’t edit or search. The scanner just creates a raster image comprised of thousands of black and white dots. You can’t open that document in a word processor and make changes.
OCR technology can single out all of the information held in that scanned image. It identifies the letters in the image and combines them into words. These words then become sentences and you end up with a document that you can search and edit. The same goes for any scanned documents, images, or physical documents.
The key to all of this is the technology behind OCR.
People recognise objects based on the three basic IPA principles. These are integrity, purposefulness, and adaptability.
OCR technology makes use of these three principles to replicate human recognition. For example, you can read the words on the scanned contract mentioned above. You just can’t edit them. OCR technology can also read those words. Plus, it can turn them into documents that you can actually use.
The software behind your OCR technology analyses the document’s structure. It then divides the document into different blocks. This leads to having several blocks each for the images, documents, and tables that the document contains.
It then divides these blocks down to individual words and then individual characters.
The software then compares these characters to those already logged in its databanks. After comparing against all of the data that the software has, the technology produces a document. The more advanced the database, the more accurate the resulting document. The most advanced versions of OCR technology can even recognise handwritten text.
This mirrors the object recognition process that the human brain undertakes. You see something and your brain compares it against the multitude of images and patterns that it has stored. This allows you to recognise what the object is. If it’s an object – or language – that you haven’t encountered before, you can’t recognise it.
OCR works in much the same way.

The Benefits of OCR to Auditors

The introduction of OCR technology will change the way that you conduct SMSF audits.
That’s because OCR offers an array of benefits to auditors.

Benefit #1 – Increased Efficiency

The process of preparing an audit file requires a lot of manual labour. You may have to sift through hundreds of documents when conducting an SMSF audit.
Think about all of the documents that you have to process as part of an SMSF audit. These used to include all of the relevant financial documents and transaction statements for the year.
The documents may also involve details about the fund’s trustees and minutes from every meeting they held. You have to process broker statements, bank statements, asset details, contract notes, rental statements, tax statements and a host of other documents.
That’s hours upon hours of reading, sorting and identification before you even get to the analysis portion of the auditing process. OCR can handle all of this for you.
The use of OCR technology allows you to quickly work your way through all of your documents. You can scan them into the software in bulk and allow it to identify all of the key data on your behalf. The technology can even be used to automate the addition of this data into your reports.
The end result is a lot of time saved on previously manual processes. For example, Cloudoffis’ OCR technology allows you to scan up to 300 pages in a matter of seconds.
OCR allows for automation of the data identification process. This frees up time that you can spend elsewhere.

Benefit #2 – Reduction in Human Errors

No matter how experienced you are, you’re not perfect. It’s possible for you to make mistakes when auditing, especially as your workload increases. With hundreds of figures to work your way through, it’s all too easy to misread something.
OCR technology takes the human error component out of the equation. With quality OCR technology, you won’t have to worry about human errors in this area of the audit process. The technology will identify objects consistently. Plus, it can even conduct analysis based on the objects it recognises.
This reduces the amount of time that you have to spend on checking your figures. Of course, it also means far fewer mistakes get made during the auditing process.

Benefit #3 – It Can Learn When Combined With AI

Modern auditing platforms can combine OCR with AI to create a constantly-learning technology.
The benefit here is that the technology doesn’t come to a standstill when it comes across objects that it doesn’t recognise. You can build on the existing databanks to ensure the technology recognises even more objects.
In this sense, OCR technology can learn in much the same way as the human brain. When you see an object you don’t recognise, you can look to other sources to identify it. For example, you could look for translation when reading a phrase in another language. OCR technology can do the same when combined with AI. This ensures the technology doesn’t become redundant.


OCR technology has the potential to revolutionise the auditing process. When used correctly, it can save thousands of hours that auditors spend on reading and analysing documents. It also cuts down on the human errors that lead to inaccurate reporting.
Finally, when combined with AI, OCR technology can learn constantly. Storing more objects in the technology’s databanks make it even more versatile. This proves particularly useful when working with documents that contain multiple languages.
All of this means that OCR can save auditors both time and money.
Of course, you also need to find the right platform for the job. Cloudoffis is the first auditing automation platform that makes use of OCR technology. Request a live demonstration below to see it in action.

This article was also featured on SMSF Adviser.

5 Emerging trends in SMSF industry in 2017 – Good time to take stock

With the substantial changes to superannuation rules in action since July 2017, it’s a good time to take stock of the emerging trends in the SMSF industry.

Trend #1 Catering to a unique population

The superannuation population now consists of a really interesting and challenging age mix. The Baby Boomers, Generation Y and the Millennials. An ageing and increasingly diverse community along with the current technological advances are bound to reshape the superannuation sector. Super funds will increasingly tailor their offerings to this new reality.

The millennial investors are more digitally savvy and happy to embrace automated investment advice compared with aged investors (60+). Studies also show that millennial investors are strong adopters of mobile apps and cloud-based technologies.

Trend #2 The age of Automation

Yet another emerging trend is the advent of automated processes and tools. Like any another industry, automation is bringing in significant change and efficiency in the way SMSFs are managed.

Cloud-based technologies are automating a variety of cumbersome day-to-day processes. Live reporting and greater visibility offer better decision making for trustees. Automated audit platforms are revolutionising the way in which SMSF audits are conducted. These tools are saving auditors a significant amount of time and helping create high quality audits.

Automation ensures a high level of accuracy, improves client experience and allows firms to improve their scalability.

Trend #3 The need for events-based reporting

The ATO is asking firms to notify them of some events 28 days after the month in which they happened and to notify them of other things 10 days after the end of the month in which they occurred. Increased events-based reporting means firms will need to have automated processes in place.

Surprisingly, in a recent poll on the SMSF Adviser, only 23% of the accounting firms said that they were ready for ATO’s events-based reporting requirements.

Trend #4 The swing towards managed funds

The investor market seems to have an appetite for managed funds. Studies show that investors tend to have more faith in managed funds, as they provide more stability and confidence in a volatile world. While SMSF trustees are interested in investing in a diverse portfolio of funds, they don’t have enough time to select and research their SMSF.

The new Super reforms from July 1st limit the role of accountants – they can no longer provide SMSF advice to their investors without obtaining a licence. This means, Advisers specialising in Managed Funds will benefit significantly. The SMSF space will also see new licensing requirements for accountants who want to provide more holistic advice to their SMSF clients.

Trend #5 Greater innovations for the future

With increased life expectancy, trustees look for a better control over their financial future. They are on the look out for innovative strategies for the future. Real-time tools that offer personalised interaction with members through portable devices; the ability to make get instant decision making strategies on a personal level; and a clear forecast on the returns.

Trustees are also interested in innovative strategies/tools that spread awareness and demands engagement from an early age. Some of the examples being cradle-to-grave products.

In the age of information revolution, smart phones, cloud-based technologies and social media, 2017 will look for newer ways to bring in efficiency in SMSF investments, administration and audit – not just in the face of regulation but to meet consumer expectations for the future.

The content provided on this blog is for information only. Cloudoffis cannot be held responsible for any loss incurred as a result of using information on this blog. Persons accessing this information are strongly encouraged to obtain appropriate professional advice before making any investment or financial decision.

Top 10 benefits of automating your SMSF audit process at high standard

SMSF audits require a high standard of consistency and quality control, and automation plays a key role in achieving these goals. In fact, it’s transforming the SMSF industry, as most practices are fast adopting audit automation processes. If you haven’t, it’s time to jump in before it’s too late.

Here are the top ten benefits to help you make that decision

1. Improve accuracy and create error-free audits

One of the key reasons to use automated software for SMSF audits is of course… it’s ‘automated’! Using any form of manual method to look for information increases the room for error.

The auditomation technology in Cloudoffis – a unique technology developed by SMSF auditors for SMSF audits – imports the trial balance directly from BGL/Class and auto-segregates them in to relevant buckets. Since client or fund details are populated automatically, you can be rest assured your audit reports will be error-free.

2. Save time and improve efficiency

Automation allows you to conduct faster audits without having to do repetitive tasks such as compiling checklists, checking things repeatedly or identifying red flags.
Powered by auditomation, Cloudoffis analyses the scope of the audit as soon as the data is imported and creates relevant checklists for that particular account, so you don’t have go through irrelevant items. This means you have to check source documents only once. Additionally, there is also a ‘Customise Checklist’ feature to tailor to your practice/client needs!
The auditomation technology in Cloudoffis also identifies items needing closer attention and red flags them automatically. Gone are the dreadful days of sifting through reams of data looking for issues such as negative balance, interbank entries, reverse balances, etc. In fact, auditomation saves up to 40% of an auditor’s time.

3. Discover the power of a single window interface

Advanced SMSF audit automation software offers a structured environment with all the necessary processes and documents an auditor needs in one place.
The single window interface in Cloudoffis provides one coherent view of the lead schedules, checklists, red flags, supporting documents, review points, etc. Putting all the key ingredients for the audit within easy access. This means you don’t have to juggle across multiple views or open multiple documents and you can create end-to-end audits in a single window.

4. Intuitive and easy to use

The real test of any automation software lies in its simplicity. Cloudoffis enriches the user experience by providing a user-friendly, step-by-step navigation flow. Powered by auditomation, it’s packed with intuitive tools that complement the auditor’s skills at every step.

5. Store and share documents securely

By automating the process of moving data offline, you can save time and reduce the potential for error.The Document Management System seamlessly integrates with Cloudoffis, offering secure online storage.

6. Powerful search function

The powerful search functionality in Cloudoffis enables you to easily locate documents by simply using keywords or figures. You can search for and open documents in the same window, and simply drag and drop source documents to complete an item of audit!

7. Collaborate in real time

When an auditor has a query or needs any documents from a client, they no longer have to waste time making calls or writing emails. The in-built collaboration platform in Cloudoffis allows an auditor to connect with colleagues and clients in real time – saving a huge amount of time for everyone.

8. Monitor the progress of jobs easily

An automated system not only lets you see the status of any individual item, it also gives you the bird’s-eye view of your whole system. With the power of auditomation, the Cloudoffis dashboard gives senior management real-time status / percentage completion and staff-wise allocation of each job, etc.

9. Increase scalability

Processes that took weeks before can now be achieved within minutes thanks to auditomation. A well-conceived SMSF audit software such as Cloudoffis accelerates the audit time, enables your firm to complete more high quality audits in a shorter frame of time, helps meet client deadlines, and increases efficiency and productivity in several ways.

10. Increase your firm’s profitability

With the changing dynamics on the SMSF landscape, practices are under increasing pressure to deliver high quality audits cost effectively.

By investing in sophisticated cloud-based technology powered by auditomation, you can simplify and speed up the audit process. Most importantly, you can ensure that you are not just in the game, you are well ahead of it!