Small Business Tips

Top 4 Tips for lodging your BAS

Top 4 Tips for lodging your BAS

A BAS is also known as a business activity statement. If your business is registered for GST then it is a MUST that you submit a BAS. Lodging your BAS will assist you in paying a variety of tax obligations. With the due date for the first quarter BAS coming up soon on the 28th of October, we have compiled 4 useful tips you should take on board to help make your lodging process a little easier and by using Financials for Office365 to help with reporting.
 

Tip #1:  Know your dates 

When is it due? What are the penalties if you’re late lodging? Do you know how often you report? We know birthdays are hard enough to remember, so BAS dates can’t be much better. Thus, we have broken down the different due dates so you know exactly which dates you need to mark on your calendar. The reporting periods are either monthly, quarterly or annually.
 
Monthly
 
The BAS return should be lodged and paid by the 21st for the following month. Monthly reporting is required of your business if GST turnover is over $20 million (GST Turnover = Gross – GST) or you have simply chosen to report monthly.
 
Quarterly
 

If your GST turnover is under $20 million, your business will likely report quarterly.
 
                              Quarter               Date Due
Q1 July-August-September 28 October
Q2 October-November-December 28 February
Q3 January-February-March 28 April
Q4 April-May-June 28 July
 
 
Annually
 
If you choose to report GST, pay or claim a refund annually or to pay GST in installments, then the deadline is the same as the date to lodge your income tax return. If lodging an income tax return is not applicable then the deadline for BAS is 28 February the following year.
 
When you miss the deadline, you can be fined $180 for every month it is delayed. Each overdue BAS incurs a separate penalty, so If you know you will be late in lodging your BAS or are struggling to gather funds for payments, contact the ATO immediately!  
 
 
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Tip #2: Check and Double-check your information

 
Ensure you keep all receipts and invoices as proof even if when paid in cash or for expenses like office stationery and equipment. Check all your information is recent and accurate. Bank statements should match your business’ accounting statements. A way to ensure your transactions are imported into Financials for Office 365 via a CSV which can then be populated into a journal. Each transaction should include the total amount, the GST paid as well as a description.  
 
1. If your business reports BAS quarterly, you can do Full Reporting or the Simpler BAS Reporting Method.
 
Full Reporting: If turnover is over $10 million you use this method. It provides more detail regarding your business activities. Total, export and GST-free sales, GST on sales and purchases as well as capital and non-capital purchases will be reported in the BAS.
 
Simpler BAS Reporting: If turnover is under $10 million In your BAS, you will need to only report Total Sales, GST on sales and GST on purchases. 
 
The calculation sheet as seen below, can be imported into Financials for Office 365 letting you calculate your GST settlements directly into a bank reconciliation and automatically matches it. This calculation sheet is a summary of the business transactions and provides calculated GST amounts that will help you fill out and lodge your BAS forms.
 
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Tip #3: Reconcile your bank and credit accounts

 
 This ensures expenses and any purchases are accounted for and justified. This means each and every payment of a sale, sales receipt, cash expenses and business expense should be posted into your Financials for Office 365 software. This way all the transactions can be processed and included in your BAS lodgment. If you miss out on some transactions therefore missing out on payments and GST that needs to be paid back.  Reconciling your bank accounts often can reduce the likelihood of this occurring. Our cloud software can help you with this task and assist with bank reconciliation.
 
Bank reconciliation allows you to match your business transactions against your bank statements. It also allows you to correct any errors in addition to adding missing transactions, this ensures the information you use and send off is as accurate as possible.
 
 
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Once all the information is checked you can run an activity statement from the software. This will allow you to gauge how much GST you might be owing or are owed.
 

Tip #4: Cash or Accrual Accounting Method

 
Understand what method you are using. For small and growing businesses, you have the option of using cash or accrual methods of accounting for GST.
 
 
               Method of Accounting                                                       Advantages
                       Cash Basis
  • Cash flow is easier to manage since money coming through is better aligned with activity statements
  • Transactions are recorded once the expenses and sales are paid
  • Simpler method
  • You pay or gain credits for GST once you have paid or been paid
  • If your business is mainly handling cash this method is more suitable
                       Accrual Basis
  • Means expenses and sales are noted if an invoice is sent or received
  • Tracks revenue rather than cash
  • Better record of credit and debts and financial status of the business
  • GST is payable once you send an invoice
  • GST can be claimed even when you have not paid but have the invoice
 
 
When you have decided which method may be more suitable for your business, you should ensure your accounting system reflects this choice.
 
BAS reporting may seem like a chore now, but with Financials for Office365 and our 4 tips, the entire process can be much easier for you.  
 
 
If you feel as though your small and growing business can benefit from this:

Contact us today at 1300 191 222 or visit your website http://www.o365financials.com/