A simple, informative breakdown of BAS for small business owners

What is BAS? How to lodge your BAS online and how often you need to

If you’re new to the world of business, understanding the Australian tax code can be difficult. Nonetheless, as a business owner, it’s important that you at least have a fundamental understanding of GST and how to report it on your BAS. So often, we come across business owners who have done it on their own for years and ended up in a tricky situation, but there is the simple solution of outsourcing this reporting and allowing an accounting professional to ensure your BAS is lodged correctly.

If you’re looking to gain a better understanding of BAS and GST, then this article is for you. We also cover your options for easily outsourcing this task in a way that saves you more money than you spend. 

Firstly, let’s determine what GST is

As your BAS statement heavily relies upon your GST, it’s best we start here. GST stands for “goods and services tax”. This is a type of tax that applies to the vast majority of goods sold in Australia. GST is paid by businesses and consumers in the final price tag of most goods and services, and it’s then up to the business to pass on these proceeds to the government.

GST plays the role of providing the government with revenue while simplifying the need for state-based taxes. Once the revenue has been collected, the federal government then distributes these funds back to the states. 

Now, let’s understand what a BAS is

Any business that is registered for GST is required to lodge a business activity statement (BAS). Lodging this statement allows a business owner to pay their GST, PAYG withholding tax, as well as other taxes. When a business registers for its ABN and GST, they will receive its BAS when it’s time for it to be filed. 

How to do a BAS

Leading up to lodging your BAS statement, it’s important that you have all the relevant data and information readily available. This refers to having up-to-date and accurate recordings of all sales, expenses, fees, wages and other costs associated with running your business. 

Managing your books can often be a time-consuming process, and most business owners outsource their bookkeeping to a service like ours. They’re often too busy growing the business and handling all the day-to-day tasks, and having the online bookkeeping accurately managed on their behalf is the best way to free up more time. 

How often do I have to lodge my BAS?

Depending on your turnover, your pay cycle for GST will vary. Here’s everything you need to know on how often businesses are required to lodge BAS statements. 

Monthly: If your GST turnover is 20 million or more (or you can choose to pay your GST monthly)

Quarterly: If your GST turnover is 20 million or less. 

Annually: If your GST is under $75,000 and you voluntarily registered.

In the situation of a natural disaster, or if extraneous circumstances have meant that you can’t pay your GST on time, a registered BAS agent can negotiate a BAS payment extension with the ATO on your behalf.

Finalising your BAS 

As you complete your BAS, there are a few key things you should remember. 

  • Ensure that all of your transactions are recorded and reconciled, 

  • Enter whole dollar amounts, and don’t round up to the nearest dollar, and

  • If you use cash accounting, your sales and expenses must be within the same period you received payment.

Many business owners get confused by all the fields they need to complete as they sit down and look at their BAS. A simple solution is to focus only on the fields that are relevant to your business. These are generally total sales, GST on sales & GST on purchases.

If your accounts are up to date, this process is infinitely easier. If you are registered for GST and therefore turning over $75,000+ per annum, you should definitely be using a cloud accounting software like Xero, Quickbooks or Odoo to keep your accounting details updated. When these platforms are kept up to date, it makes reviewing the BAS transaction details much easier!

Business owners also like to work with a registered BAS agent who understands GST, saving business owners hours of time not having to review ‘boring’ details.  More importantly, a registered accountant and BAS expert will often save your business far more than what you need to invest for their time. At Accolution, we do offer fixed-price Online Bookkeeping, BAS Agent  and Virtual CFO services, which you can learn more about here.

How to lodge your BAS

Without being too alarmist, there are penalties in place if you fail to lodge your BAS correctly and on time. In some cases, you may also end up being personally liable to the tax office. If you do think you have missed a BAS lodgement date, it’s best you reach out to a registered BAS agent to make sure you navigate the situation properly.  

When it comes to actually lodging your BAS, it’s imperative that you use the correct payment reference number (PRN) or BPay code when you make your payment, so the funds are allocated to your account at the ATO.

In terms of where to lodge it, you can lodge your BAS online using the MyGov business portal. If you’re using a cloud accounting software like the ones we mentioned above, you may also be able to directly lodge your BAS online through that platform. 

If you’re currently in the process of doing your own BAS and finding it difficult, feel free to reach out to us below. As we mentioned, we’re registered BAS agents and will certainly be able to take this job off your plate so you can focus on what matters the most.


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