17 Essential Steps for Preparing Your BAS Preparation
Preparation of a Business Activity Statement (BAS) can be an intimidating task, but it is a critical aspect of running a business in Australia. BAS is a report to the ATO, displaying GST, PAYG, employee withholding, and other owed taxes/charges for Australian businesses.
BAS ensures tax compliance, accurate financial records, and precise reporting, ensuring businesses meet their obligations. Regular BAS preparation ensures ATO compliance, avoids penalties, and promotes financial health of your business.
17 Essential Steps for BAS Preparation:
- Gather financial information:
Gather invoices, receipts, bank statements, and relevant financial documents to prepare BAS, ensuring a comprehensive view of business finances.
- Organize financial information: Once you have all the financial information, organize it into categories like income, expenses, and taxes. This will make it easier for you to calculate the relevant amounts for the BAS.
- Identify taxable sales and purchases: It’s important to identify the taxable sales and purchases for the reporting period. This information is essential to calculate the GST owed.
- Calculate the GST collected: Add up all the GST collected from sales for the reporting period to determine the total amount of GST collected.
- Determine GST payable: Subtract the GST collected from the GST payable to determine the amount of GST owed to the ATO.
- Calculate PAYG withholding: Add up all the amounts withheld from employee salaries for the reporting period to determine the amount of PAYG withholding owed.
- Determine other taxes and charges: Review financial information to identify additional owed taxes or charges during the reporting period. This could include fuel tax credits, wine equalization tax, or luxury car tax.
- Identify credits and adjustments: Look for any input tax credits or GST adjustments that need to be made to the BAS.
- Determine installments and payments: Verify if any due installments or payments exist for the reporting period, ensuring their inclusion in the BAS.
- Review the BAS: Before submitting the BAS, it’s essential to review it to ensure all calculations are accurate and all the information is complete.
- Complete the BAS form: You can complete the BAS form online or on paper. If you’re not sure how to fill it out, you can refer to the ATO’s guidelines or seek assistance from a professional.
- Review the completed BAS: Once you have completed the BAS form, review it again to ensure all the information is accurate and complete.
- Calculate the balance due or refund owed: Based on the information provided in the BAS, calculate the balance due or refund owed for the reporting period.
- Make payments: If there is a balance due, make sure to make the necessary payments or arrange for payment.
- Lodge the BAS: Once you have reviewed the BAS and made any necessary payments, you can lodge it with the ATO.
- Keep records: Keep a copy of the BAS and all supporting documentation for five years.
- Prepare for the next reporting period: Review and update financial records post-BAS lodgement, preparing for the upcoming reporting period.
Conclusion
Preparing a BAS may be daunting, but it’s crucial for ATO compliance and effective financial management of your business. By following these 17 essential steps, you can ensure that your BAS is accurate, complete, and submitted on time.
It is important to note that the BAS is a crucial aspect of running a successful business in Australia. Accurate BAS preparation and submission prevent penalties, fines, and maintain the financial health of your business. Regular BAS preparation and submission aids in detecting financial irregularities, enabling timely corrective measures to be taken.
Additionally, having accurate and complete financial records can help you make informed business decisions and achieve your business goals. Regular BAS preparation ensures financial stability by keeping track of finances and maintaining a sound business. We provide affordable BAS preparation services globally that will help you to save time and you can focus on other important activities. Let us handle your accounting and we will make sure that you will never get any penalties.
