How to Prepare Your BAS – Minus the Stress
Your BAS – a Business Activity Statement – is a report that needs to be submitted to the Australian Taxation Office either monthly or quarterly. Generally, businesses need to complete a BAS in order to report and pay GST. The report needs to be lodged by every Australian business registered for GST.
As of July 1 2017 the ATO has introduced a simpler system to make BAS quicker and easier for businesses to generate their BAS. The changes are solely made to GST reporting and small businesses now only have to report:
- Total sales (G1)
- GST on sales (1A)
- GST on purchases (1B)
It does not change how PAYG income tax instalments or PAYG tax withheld are reported.
Preparing BAS Manually
Doing your BAS manually is much trickier than using small business accounting software as there is a much higher chance of making an error. The ATO can impose high penalties on errors, especially if they happen regularly or if the ATO deems it due to ignorance of tax law. When you receive your letter from the ATO stating that BAS is due, it will include a ‘cheat sheet’ that can help you prepare your BAS statement.
Many businesses will give their BAS to their accountant to complete. However, this can be quite expensive to do every quarter or every month. Even if you do decide to hand it off to your accountant, you will still need a system for keeping track of all your business records and categorising them as needed for the report.
How to do Your BAS Using Small Business Accounting Software
Using small business accounting software takes the time and complexity out of preparing BAS. By simply inputting your financial details into the software in the relevant columns, it will quickly generate your BAS in the correct format to send straight to the ATO.
To make it as easy as possible, all this method requires is that you make sure you regularly update the system with your business financial information, rather than trying to do everything at once.
Otherwise you will run into the same problem as with manual entry and will have to spend a lot of time making sure the information you enter is accurate. However, with accounting software like Cashflow Manager, it is easy to regularly input your data and maintain updated financial records. Your accounts will be categorised automatically, removing the need for you to painstakingly do it yourself.
To ensure that your information is accurate, check that your bank statements match your accounting information. Collect all your receipts and invoices, or locate them on your digital receipt storing system, to assist you. If there are any transactions missing you can then enter them in.
The software you have should calculate your GST automatically, reducing the possibility of you making a mistake and significantly shorten the time it takes to create your BAS. You can then generate your BAS and lodge it with the ATO.
Up to date software will be across the changes to BAS reporting brought in by the ATO and will ensure that you are sending the correct information. Hosted online, Cashflow Manager Cloud is always kept current and compliant with ATO requirements.