Running a self-managed super fund gives you greater control over your retirement savings, but it also brings annual reporting and compliance responsibilities. A little preparation throughout the year can make the independent audit and SMSF annual return significantly smoother.

Start with complete financial records

Your accountant needs a clear record of every transaction made by the fund during the financial year. Gather bank statements for every SMSF account, investment platform reports, dividend statements, contribution records, pension payment details and evidence supporting any expenses paid by the fund.

If the SMSF owns property, also provide rental statements, rates, insurance, repairs, property-management records and an appropriate market valuation. Keeping fund and personal transactions completely separate is essential.

Arrange the independent audit early

Every SMSF must be audited each year by an approved independent SMSF auditor before the annual return is lodged. The ATO advises trustees to appoint the auditor at least 45 days before the return is due. The auditor examines both the fund’s financial statements and its compliance with superannuation law.

Respond promptly if the auditor requests contracts, minutes, valuations or further evidence. Missing documents are one of the most common reasons an audit takes longer than expected.

Review contributions carefully

Check that employer, personal and rollover contributions have been recorded against the correct member and financial year. Contributions received close to 30 June deserve particular attention because the date the money reaches the fund’s bank account can affect the year in which it counts.

Check pensions and member payments

If the fund is paying an account-based pension, confirm that the required minimum pension was paid during the year and that payments were made from the correct fund account. Keep pension commencement documents, trustee minutes and member requests together with the accounting records.

Payments to members must satisfy a condition of release. An SMSF is not a personal bank account, even where every member agrees with the payment.

Update the investment strategy

Trustees must formulate, regularly review and give effect to an investment strategy. The strategy should consider risk, return, diversification, liquidity, the fund’s ability to meet liabilities and whether insurance should be held for members.

Prepare valuations and trustee records

SMSF assets must generally be reported at market value. Listed investments are usually straightforward, while property, unlisted investments and collectables may require stronger supporting evidence. Retain valuation material with the fund records.

Also keep trustee minutes recording important decisions, signed financial statements, changes to members or trustees, and supporting documents for investment purchases and sales. Some SMSF records must be retained for at least five years and others for at least ten years.

Before lodging the return

• Confirm the audit has been completed and auditor details are correct.
• Review member balances, contributions and pension information.
• Check that the fund’s contact and bank-account details are current.
• Arrange payment of any tax liability by the due date.
• Keep a complete copy of the lodged return and supporting workpapers.

Golden Mane Advisory can help trustees organise their SMSF accounts, financial statements and annual return and coordinate the information required by the independent auditor.

This article provides general information only and does not constitute personal financial advice. SMSF trustees remain responsible for their fund’s decisions and compliance obligations.