Small businesses and the GST: changes in management accounting routines

Abstract

The external imposition of the Goods and Services Tax in 2000 necessitated a change in management accounting routines in Australian businesses. The tax was not levied on certain food items for social and political reasons, complicating the accurate tracking of tax inputs and outputs where those food items, other food items and other products were sold within the business environment. The lack of resources available to small corner stores and their idiosyncratic nature made the record keeping, necessary to comply with the legislation, difficult to implement and maintain. The research investigated steps over time taken by these small businesses as they changed their routines and technology to meet the new requirements. Using a theoretical framework developed to explain management accounting change, it was discovered that changes in routines occurred to varying degrees form a simple increase in the number of columns in the ledger to the introduction new technology including computers, new registers and databases. All respondents reported fulfilling the requirements of the taxation department and were satisfied with their accounting processes.