BAS Errors You Need To Avoid

When it comes to preparing and lodging Business Installment Activity Statements (BAS), you might be unaware of the mistakes you have already committed. It is important to pay heed to these statements and make sure you avoid these common mistakes.

1. Selecting the cash method

Do you understand the implications of a turnover? Perhaps, you need to be aware of these things because they play a critical role when it comes to registering for GST with the ATO. If your business has a turnover of less than $2 million, you need to select whether you are going to use the cash or accrual accounting method. More often than not small businesses opt for the cash method, but this may not always be a good choice. For cash-based businesses that have no debtors and creditors to pay, the accrual method is a great option to consider. This option allows you to claim the GST back on purchases immediately. You will not hurt your cash flow this way. Make sure you update your bookkeeping system with this method and correct reports must be printed.

2. Not declaring the wage amount when preparing a quarterly BAS

If you are withholding more than $25,000 per annum in PAYG Withholding from your employees, the ATO will decide to move you to a lodgement cycle which is on a monthly basis. The advice will be done in writing. Once advised, you will need to lodge monthly Instalment Activity Statements (IAS) and quarterly Business Activity Statements (BAS). You should also take note of the lodgement schedule for GST and PAYG. GST must be reported once a quarter while PAYG should be reported once a month.

3. Varying your PAYG Income Tax Instalment without the accountant’s advice

When calculating your tax amount, the ATO is usually working about one to two years behind the actual amount you should be paying. You have to understand that circumstances can really change over these years especially when businesses grow or shrink. These circumstances may lead to changing your income tax instalment amount. You need to check with your accountant or bookkeeper before you consider revising the amount paid. If you choose to vary your instalment downwards without the advice from your accountant, you may end up paying fines and penalties.

4. Failing to lodge by the deadline

Take note of the lodgement dates so you will no risk falling behind. For BAS, you need to lodge on the 28th day of the month following the quarter except for the December quarter where the due date is moved to 28 February. For businesses lodging via a Tax agent or BAS agent, you will be given an extra lodge in addition to your lodgement date. Avoid late lodgements as the ATO will fine you $180 for each month of delayed submission of BAS.

Improve Your Bookkeeping System With These Techniques

These days, businesses have been more open to welcoming changes in workplace environment. More and more business owners have realised the potential of a mobile workforce to increase productivity by bringing innovation into your workplace. If you used to dread repetitive tasks because they are slowing you down, you need to adopt new and intelligent technology to change your business operations. There are three techniques you can employ so you can improve the overall performance of your business.

1. Improve your filing system

More often than not, business owners find themselves filing receipts and invoices to comply with the ATO. While this is the best practice to follow, the task may take long to carry out. You will need to file and manage receipts and invoices regularly to make sure that the essential documents are still intact. When filing receipts, use cloud-based programs so you will no longer have problems retrieving files when you need them. When you use bookkeeping software or cloud-based applications in filing your receipts, it will be easy for your people to access information from any device at any time.

2. Improve your information sharing capability

One reason that can delay the pace of your business operations is when  essential information is not available to your employees. When they have to go from one person to another just to get the information they need, the task can be really time-consuming. Instead of finishing the report in a day, you can end up dealing with it for days. This is why you need to improve the accessibility of your information so it will be much easier for your employees to coordinate with others in case you want to generate financial reports. When you integrate technology with your business, it will be much easier for your employees to collaborate. They can also access documents from their own mobile device. You can also increase productivity when your employees find it easy and convenient to access all the necessary information they need.

3. Streamline your bookkeeping processes

It is necessary to enhance your bookkeeping system if you are struggling with your accounts payable processing. When you lose sight of your cash flow, BAS payments to the ATO may also suffer. Real-time bookkeeping must be encouraged, which can be done with the help of bookkeeping software. The software will help you determine the suppliers you need to pay and vice versa. Week payment schedule will not be forgotten if you have a streamlined business process. You can even pay off each bill before the due date.