The ATO provides industry benchmarks for small businesses based on the data they acquire from tax returns and business activity statements. These can be used to compare your business with others in the industry and help identify areas of weakness.
There are two types of benchmarks; performance benchmarks and input benchmarks. These provide a number of different ratios, for example:
- Cost of sale to turn over
- Total expenses to turnover
- Rent to turn
The ATO also uses the benchmarks as an indication of when a tax return may require further investigation.
You can read more about benchmarks and view them by following the below link:
If you find you are well outside your industry standards you may wish to consider discussing this with an accountant.
Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.