Home » Tax » An Easy Guide To Preparing Your BAS

An Easy Guide To Preparing Your BAS

The deadline for the latest quarterly Business Activity Statement is looming; in fact, it’s around the corner and stress levels are rising.  While the ATO tries its hardest to make the process of BAS lodging as painless as possible, there remains some work to be done become your business activity statement (BAS) is fully prepared.  This is an easy guide providing simple steps on how to effectively complete this preparation for BAS lodging.

Step #1: Deciding How To Process The BAS

The first, and arguably most important, step to take is deciding how you will be processing your BAS.  Online accounting software makes the organisation of necessary information much simpler; however, you must ensure the information show in the report generated is accurate.  It is recommended that you recruit a BAS registered agent to help you with this situation in order to produce the best statement possible.  You may even benefit from an additional four weeks extension on BAS lodgement and payment.

Step #2: Preparing The Information

Despite seeming difficult, the process of lodging a BAS on your own is not necessarily difficult dependent on how well you have saved your records.  If the records are “in a mess”, the chances are that it may be quite time-consuming.  You should keep in mind that accurate completion of the BAS is essential because errors can result in penalties.

To avoid any errors and reconcile accounts, it is necessary to ensure that your information is accurate and recent.  This can be done by taking a detailed and thorough look at financial records and ensuring that back statements mirror your accounting information.  You must also ensure that the purchases and case expenses are duly recorded, that information regarding creditors is correct, and that all outstanding funds are justifiable.  The information can be gathered from receipts and invoices showing business transactions; as well as receipts and invoices showing cash transactions.  If you use the accounting software Xero, you can run a bank reconciliation summary and review the general ledger for any exceptions.

Step #3: Enter Any Missing Transactions

Accounting software like Xero is beneficial in that it streamlines the process through direct connection with the business bank account.  This is far less time-consuming than completing the task manually.  If you have any receipts or invoices that are not reflected in the summary, it is necessary to enter these missing transactions.  Each transaction entered will need a date, the total amount of the transaction, a description of the transaction, and a GST.

Step #4: Complete A Total Of The Records

Once all the information is successfully and correctly recorded, you can run an activity statement using the accounting software.  If, however, you are completing the BAS manually, you must add the amounts to determine what GST amount you are owed or owe for the current tax period.  This step requires absolute accuracy; therefore, it is imperative that you review your work before moving onto the next step in BAS preparation.  In fact, review the work several times to ensure no errors were recorded.

It is also necessary in this step to calculate your PAYG amount.  The PAYG is the amount of tax withheld from an employee’s wage.  To complete this calculation, you must review the payroll and record the amount of tax being withheld; as well as the gross wages for your staff.  If you do not have any employees and are not paying wages, it is required to enter zeros in the section.

Step #5: Updating Records And Lodging

When the BAS has been completed, it is necessary to update your records with the current information.  It is also necessary to make photocopies or electronic backups of all the documentation.  A hard copy of the BAS form must be sent to the ATO, as well as being filed electronically via the ATO e-portal.  If you are unsure of how to complete this, or would rather have a professional complete the task for you, it may be beneficial to hire a BAS agent.  It is essential that you make your payment on time and meet deadlines or contact the ATO to make arrangements for the payment.

Final Words On The Matter

As it stands, these steps are the most basic guide to lodging a BAS.  While not challenging, modern technology, such as accounting software, have made it far simpler than in the past.  Use the information in the guide and electronic technology to your advantage as BAS payments are an important part of your business.  Best of luck!

Leave a Reply

Your email address will not be published. Required fields are marked *