Becoming Succession Ready: Tax Lodgements Review

Updated: Jun 27

When making plans for your practice's future, it's crucial to consider and review many aspects of your practice.


Your tax lodgement performance history and current status are important and interesting statistics in your practice.

What is your tax lodgement performance percentage over the last three years?

Are you consistently 85% and above or below this level?


High-performing firms consistently achieve 90%+ year on year. A lodgement performance percentage of over 90% points to an efficient team and a well-managed client base. Typically, a higher lodgement performance percentage indicates a well-run, profitable practice.


During your succession journey, your successor will review your tax lodgement history when due diligence is conducted on your practice. Your tax lodgement history provides insight into the management and quality of your client base. Without question, a consistently low tax lodgement performance percentage will be cause for concern.


What are the reasons for your low tax lodgement performance percentage?

  • Is it due to the quality of your clients that you service?

  • Is it because of resource challenges in your practice?

  • Are there inefficiencies in your workflow processes?

  • Are there other reasons?

Whatever the reasons for a consistently low tax lodgement performance percentage, it will undoubtedly lead to a deeper investigation and may lead to a lower overall valuation of your practice.

Housekeeping: At a minimum, it would be wise to review your clients on your ATO portal and remove any clients who have left your practice. If clients don't need to lodge, notify the ATO of your clients' current lodgement status.

As you prepare your practice for your succession, if your tax lodgement performance percentage is below 85%, it would be wise to start implementing strategies to address this issue now. To help maximise your practice value, you would ideally be aiming to deliver a tax lodgement performance percentage of 85+%. You will be rewarded for your efforts through your succession journey.


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