Last updated: 18th Oct 2019
So, you’re a smart operator when it comes to tools and trades, but when it comes to tax and accounting, you hit a wall. Fortunately, not all of it is the minefield it appears to be – like your business activity statement (BAS) . Your BAS summarises the goods and services tax (GST) you owe or are owed for a specified period, and consolidates several other taxes paid in the period, including your pay as you go (PAYG) instalments and PAYG withholding. With the quarterly due date just around the corner we take a look at how you can simplify preparing and lodging your BAS.
Step 1: Gather your information
The reason for lodging your BAS is to report and pay your GST. So the logical first step – and usually the most time-consuming – in preparing your BAS is categorising all sales and purchases, and reconciling your accounts. To do this, you’ll need to gather all your business receipts and invoices for the month, quarter or year, depending on your reporting requirements.
Unless you’re a ninja at keeping records, this step is usually the most time-consuming for tradies so, if it’s not your forte, consider enlisting the help of a professional bookkeeper or using online accounting software, like QuickBooks Online, which organises all your invoices, bills, receipts, and payments in one place.
Step 2: Complete your BAS
With all your records now in order, complete your BAS. If you have an accounting software program, it should track and calculate your GST automatically so that, come tax time, all you need to do is check your BAS summary before you lodge it. If you employ other tradies, don’t forget to calculate the PAYG tax you withheld from their payments and note this on your BAS too.
Fortunately, the government has acknowledged the time and effort that small businesses take to prepare their BAS and have simplified the process. From July 1, 2017, businesses with an annual turnover of less than $10 million will only have to report total sales, GST collected on sales, and the GST you’re entitled to from purchases.
Step 3: Lodge your BAS
There are plenty of ways to lodge your BAS. If you employ an accountant or bookkeeper, they can act as your BAS agent, and can lodge and pay your BAS on your behalf through their preferred channel. You can also do it yourself electronically on the ATO’s online business portal. If you’re using accounting software, like QuickBooks Online, pre-populate the information required for your BAS submission prior to lodgement, checking all the details are correct. However you choose to lodge your BAS, make sure you do it by the due date to avoid any penalties.
That’s it! You’ve lodged your BAS. Once it’s done, update your records with any new information and make copies or backups. By law, you’re required to keep a record of your BAS and the documents you used to prepare it for up to five years.
Evidently, getting into the habit of good record-keeping is the key to easy BAS preparation. And while it might take some adjustment if you’re doing it manually, it will make your life a lot easier in the long run.
Learn more about how QuickBooks Online can help you hold onto your cash.