Every business owner needs to keep track of their records so they can properly process their Business Activity Statements (BAS) and Goods and Services Tax (GST) on time. There are two things you need to make sure everything goes smoothly when lodging your BAS— an eCommerce accountant and reliable online accounting software. Having these two will make your BAS processing 10x more manageable. To make things even less troublesome, here’s a quick step-by-step guide for preparing BAS.
1. Preparing your Information
First, you need to reconcile your accounts to ensure that all your information is accurate and up-to-date. We’re talking about your financial records, your bank statements, pretty much everything that has to do with all your business transactions. Make sure all purchases and cash expenses are recorded and correct.
Gather records of your business transactions, receipts, and invoices. If you’re using Xero, running the Bank Reconciliation Summary is important, as well as checking your general ledger for exceptions.
2. Enter Missing Transactions
As mentioned above, using Xero is a great accounting software to have as it has a couple of advantages, especially when preparing your BAS. One such advantage is its ability to connect directly to your business bank account, making it easier to enter missing transactions than doing it manually. Record any missing entries for which you have receipts and invoices. For each transaction, you will need a date, total amount, GST, and a description.
3. Total Your Records
Once you’re done with all your information, if there’s an Activity Statement option in your software, it’s recommended that you run it. If you’re processing your BAS manually, then you need to add up all the numbers to determine what amount of GST you owe or are owed for the tax period. Make sure your total is accurate, so check and double-check all the information.
As a business owner, you also need to compute withholding tax from employee wage payments. To do this, review your payroll and enter the amount of tax withheld and the gross wages for your employees. If you still don’t have any employees, enter zeros for this section. This completes your BAS.
4. Update Your Records and Lodge
Once your BAS is ready, you need to update your records with all the new information you entered and make copies of all the relevant documentation. When submitting your BAS form, you can either mail a hard copy to the Australian Taxation Office or file it electronically through their portal.
If you’re working with a BAS-registered agent, there’s also the option to have them lodge it for you. The only thing left is to make sure you pay the Australian Taxation Office the correct amount you owe and pay it on time or make arrangements with the ATO for payment.
Knowing the basic steps in lodging your BAS is a must for any responsible business owner. It may be a little confusing at first, but you’ll eventually get a better grasp of doing it after a few tries. Again, if you feel like you’re struggling in preparing your BAS, an eCommerce tax accountant can be of great help to you.
Turn to The Ecommerce Accountant when it comes to managing your finances and keeping track of your tax obligations. By working with our passionate and experienced accounting team, you can get all the guidance you need to manage and grow your business easily. When it comes to eCommerce accounting services, trust only The Ecommerce Accountant. Book a free strategy session today!