Industry: Public Practice (Tax-Focused Firm)
Firm Size: 3 Partners | 12 Staff
Service Scope: Year-End Workpapers & Division 7A Compliance
Engagement Model: Blended Remote Support
The Challenge
A tax-focused accounting practice managing several family group structures faced recurring issues around:
- Tracking unpaid present entitlements (UPEs)
- Benchmark interest rate miscalculations
- Missing historical Division 7A documentation
- Year-end review delays
- ATO amendment risk exposure
The firm relied heavily on partner-level review to identify compliance gaps — creating bottlenecks during peak season.
TLS Intervention
TLS implemented a structured end-of-year compliance framework:
- Division 7A reconciliation template embedded into workpapers
- UPE tracking system across trust-company groups
- Minimum yearly repayment calculation validation
- Benchmark interest rate cross-checking
- Documentation checklist prior to tax lodgment
The objective was to shift Division 7A from reactive review to pre-lodgment control.
Implementation Approach
- Historical loan balances were reconstructed and reconciled.
- All related-party loans were categorised and standardised.
- Year-end workpaper format was aligned across entities.
- TLS team prepared audit-ready documentation before partner review.
Measurable Outcomes (Within 6 Months)
- 100% Division 7A loan documentation compliance
- Reduction in year-end partner review time by 25%
- No post-lodgment amendments related to loan miscalculations
- Improved confidence during ATO review interactions
The firm moved from dependency on partner memory to structured compliance documentation.
Practical Impact for Accounting Practices
- Division 7A risk can be systematised.
- Documentation discipline reduces amendment exposure.
- UPE tracking must be proactive, not reactive.
- Offshore review support can strengthen compliance integrity.
For firms managing complex family group structures, structured workpapers are critical.