The bank deposit total includes money that may not be customer sales
Classify source evidence for mixed bank credits used in an estimate response, distinguishing customer receipts, internal transfers and funding without prescribing tax treatment from labels alone.
Corporate Recovery Partners
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The bank total needs a transaction explanation
While responding to an ATO estimate, you use all credits into the business bank account as a sales figure. The account also received funding and transfers. Give the registered tax adviser a transaction-level explanation before relying on that total. A bank credit shows money arrived; its tax treatment depends on what it represents and the applicable rules.
For material entries, collect the invoice, transfer counterpart, loan document or other supporting record. Identify who paid, when and why. Keep unknown credits on an exception list rather than placing them in whichever category lowers the result. Do not describe an amount as a loan solely because the payer is a director or related business.
Business.gov.au recommends maintaining tax and financial records, including bank statements. Link each proposed category to the underlying evidence and let the tax adviser assess the treatment. The purpose of this schedule is factual support; it does not decide assessable income, GST consequences or whether a particular funding arrangement is legally effective.
Imagine the business moves cash from its savings account into its trading account during the period under review. A second credit is a customer payment, and a third is unexplained. Show both sides of the internal transfer, the customer remittance and the unresolved item separately. Do not count the transfer as a fresh sale or assume the unexplained credit has the same character.
Confirm whether other accounts or payment processors also received business money. A careful explanation of one account can still be incomplete if sales arrived elsewhere. Preserve gross transaction records and identify net settlements for adviser review. Do not subtract costs or loan repayments from receipt totals without explaining the calculation and its purpose.
Have the adviser review the schedule alongside the notice and relevant reporting requirements. Keep the submitted version and subsequent confirmation of any account change. Continue addressing related legal documents as advised. The useful result is a traceable explanation of the receipts being used, avoiding a tax response based on a convenient but misleading bank total.
