What is a Business Activity Statement (BAS)?
As a small business owner, you’ve got your fair share of responsibilities. Completing your Business Activity Statement (BAS) is one of them.
A BAS is a document that every business must lodge with the Australian Tax Office (ATO) if you have an ABN and are registered for GST.
It’s a summary of the taxes your business has either paid or needs to pay to the government during a specific period. These taxes can include Goods and Services Tax (GST) and Pay As You Go (PAYG) among others.
Your BAS isn’t just a regulatory requirement, it's a tool to help you manage your cashflow. It lets you report your financial transactions to the ATO, which helps the government calculate your tax liability.
The frequency of lodging your BAS depends on the nature and size of your business, with options for monthly, quarterly, or annual reporting.
How does a BAS work?
Your BAS reports on your taxable sales, taxable purchases and other tax obligations. The ATO uses this information to calculate the amount of tax that your business owes, or whether you’re eligible for a refund. If you need to pay, make sure you do by due date. You can check your due dates with the ATO.
What you need to know to prepare your first BAS
Now that you have a basic understanding of what a BAS is and how it works, let's dive into some tips to help you prepare for your first BAS as a small business owner.
Keep accurate records
Proper record-keeping makes your life so much easier. Use accounting software or a bookkeeping system to track your income and expenses. Make sure that you maintain records of all your transactions including invoices, receipts, and bank statements. Remember to keep your BAS records too.
Understand BAS labels
Familiarise yourself with the different sections on the BAS form and what they represent. Knowing how to categorise your transactions correctly is crucial for accurate reporting.
Set money aside for GST
When you collect GST from your customers, remember that it's not your money to keep. You're essentially acting as a tax collector for the government. To avoid cashflow problems, set aside the GST amount you collect in a business savings account so it's available when it's time to pay your BAS.
Submit on time
Make sure you meet the lodgement and payment deadlines for your BAS or you could be charged penalties and interest. Again, check your due dates with the ATO. It's good practice to set reminders for these dates and plan ahead so you have the funds available for any payments.
Seek professional help
If you're feeling overwhelmed or uncertain about your BAS obligations, get in touch with an accountant or a registered BAS agent. They can guide you through the process so everything is accurate and compliant.
Consider online BAS lodgement
The ATO provides an online portal for lodging your BAS. It's a user-friendly platform that simplifies the process and reduces the chances of errors. Online lodgement often results in faster processing and quicker refunds.
When it comes to managing your business finances, consider the benefits of opening a business bank account dedicated to your BAS obligations. Having both a Business+ Saver and a Business+ Account can also help you keep your personal and business finances separate, making it easier to track your business expenses and income.
Preparing your first Business Activity Statement as a small business owner is no joke. But with the right knowledge and little preparation, your BAS won’t wipe the smile from your face.
Remember to check out our Business Hub. You’ll find heaps of free resources and plenty of helpful information to keep your business humming.
