Small business financial reporting – doing your BAS rightKelly
As a small business owner you often don’t have a lot of left over time to spend keeping your records, so it helps to get your reporting done right the first time. One part of financial reporting for your business that can cause confusion is the completion of your Business Activity Statement (BAS). Here are some tips that will help you to complete your BAS quickly and easily.
What is a BAS?
Businesses use a business activity statement (BAS) to report and pay a number of tax obligations to the Australian Tax Office (ATO). The BAS is an ongoing requirement for businesses once they are liable to pay business taxes. Whenever you file your BAS you must pay any tax due, which allows the government to collect revenue sooner and helps business to even out their cash flow by spreading out the payment of their taxes throughout the year.
Your BAS is personalised and reflects the reporting options you have chosen. For instance, it shows only the items you need to report against, which may include:
- Goods and services tax (GST
- PAYG instalments
- PAYG withholding
- Fringe benefits tax (FBT)
- Luxury car tax (LCT)
- Wine equalisation tax (WET)
- Fuel tax credits
You can lodge and pay electronically, by mail or in person. You must lodge on time to avoid interest and penalties.
Unfortunately, doing your BAS can be one of the least fun parts of running a small business. Your BAS can be complicated and time consuming and when you could be doing a million other things in your business. There is also the possibility that you could underpay your taxes if you make a mistake and the ATO is very strict on penalties for this.
So how can you do you BAS quickly and easily, avoiding getting fines from the ATO?
Install a Small Business Bookkeeping Program
Work out what business financial reports and statements your business requires and make use of a small business accounting software that can help you to produce these regularly.
This is a very simple and time saving method not only for preparing your accounts but also for producing your BAS – especially if you do it yourself. You can also lodge your BAS directly from some accounting programs. Cashflow Manager allows you to lodge your BAS with the ATO using the Standard Business Reporting language (SBR).
If you hire someone to help you with your BAS, accounting software will save you a lot of money as it will save your agent a lot of time. Which brings us to our next point…
Use a Registered BAS Agent or Accountant
Registered BAS agents were brought in as part of reforms in the Tax Agent Services Act of 2009. This stated a clear set of standards and experience that a bookkeeper must achieve to charge a client for BAS services.
As a result of these changes, a certified BAS agent:
- must complete a recognised accounting or bookkeeping course such as a Certificate IV in Bookkeeping
- is bound by a strict code of conduct and their registration is terminated if they do not adhere to this
- has insurance that protects you financially if they make an error or omission
- has completed over 1,000 hours of work experience
So if you do choose to pay someone to do your BAS you can be much more confident with the quality of the work that is produced for you.
As mentioned earlier, you can help your BAS agent or accountant out enormously by presenting them with complete and accurate data to work with generated by your accounting program. Not only will you avoid fines or penalties, BAS agents also have a bit of extra time in which to lodge the statement. This allows you more time to ensure your papers are correct and you have enough cash flow to make your payments.
For more information about your BAS, please visit the Activity Statement page on the ATO website.