An SMSF bank statement shows that money moved. It does not always show whether the payment was a contribution, loan repayment, pension payment or reimbursement. Those distinctions matter when the annual accounts and audit are prepared.
A useful evidence pack answers three questions about a transaction: what happened, why did it happen and which document supports the treatment? Organising records around those questions saves trustees from reconstructing a year’s decisions from an inbox.
Keep the accountant’s work and the audit roles clear
An SMSF needs an approved SMSF auditor each year. The ATO requires trustees to appoint the auditor at least 45 days before the annual return is due and provide further requested information within 14 days. The audit examines both the financial statements and compliance with relevant superannuation requirements. See the ATO’s guidance on your SMSF auditor.
The accountant may prepare the accounts, tax return and supporting schedules. The independent auditor makes their own assessment and determines what audit evidence is needed. Trustees retain responsibility for the fund. A well-prepared pack supports that process; it cannot promise a clean audit opinion.
Make cash the starting point
Provide statements for every fund bank account covering the whole financial year, including accounts closed during the year. Reconcile the opening balance, movements and closing balance. Explain transfers between accounts so they are not counted as income twice.
Identify unusual receipts and payments individually. A large deposit may include a rollover and a member contribution, each needing its own documentation. A payment described only as “transfer” might be a pension or an investment purchase. A short explanation linked to the relevant record is more useful than asking the accountant to infer the purpose.
For borrowing arrangements, supply the loan statement and agreement. Separate principal and interest in the accounts, and investigate differences between the lender’s balance and the ledger. Keep records of any changes to terms during the year.
Support both ownership and value
Investment evidence should establish what the fund holds and its value at the reporting date. Broker statements, holding statements, purchase and sale confirmations, distribution tax statements and corporate action notices each answer different questions. An annual income report may not prove the closing number of units.
For property and unlisted investments, document the basis for the value. The ATO’s guide to valuing SMSF assets explains the need for an appropriate market value and supporting evidence. Do not assume last year’s figure remains suitable simply because the asset was not sold. Whether an external valuation is needed depends on the asset and circumstances.
For a rental property, collect the lease, agent’s annual statement, invoices paid directly by the fund and evidence of rent received. Reconcile outstanding rent to the lease terms. If the tenant is related to the fund, identify the relationship and provide the documentation needed to assess the arrangement.
Member movements need their own trail
Keep contribution and rollover records by member. Give the accountant any relevant notices, acknowledgments and correspondence, together with evidence of receipt. Record the transaction date accurately, including where money was initiated before year end but received later.
For pensions or other benefit payments, provide the supporting commencement and payment documents and the bank evidence. Any question about a condition of release or the character of a payment should be raised promptly. An accounting label added at year end does not determine whether a payment was permitted when it occurred.
Trustee decisions belong in the pack too. Retain actual minutes and approvals for material decisions, the investment strategy and relevant reviews, and changes to the trustee or fund documents. Do not create a false historic record to fill a gap. Explain the missing evidence and obtain advice about the appropriate response.
Use a short issues register
Before sending the records, list unresolved matters with the amount, document required, responsible person and expected response date. For example: “Property insurance reimbursement, $2,800; insurer’s settlement letter requested; trustee to supply.” This lets the accountant and auditor see the outstanding work without searching through multiple emails.
Keep the final signed accounts, audit report, tax return and supporting schedules as one completed annual file. The ATO says the SMSF annual return should be lodged after the audit has been finalised; the fund’s particular due date still needs to be checked. See lodging SMSF annual returns.
Retention periods differ. The ATO identifies financial records generally kept for five years and specified trustee records kept for ten years. Its SMSF record-keeping requirements should guide the retention schedule; preserve foundational documents and any records needed for longer-running transactions.
Target Advisory supports the accounting, tax and evidence preparation within the agreed scope and works with the appointed independent auditor. A monthly habit of saving the explanation beside the document can make the annual process considerably more manageable.
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