If you’re running a trades or services business and earning over $75,000 per year, one of the main regulatory requirements you need to complete is preparing and submitting a Business Activity Statement or your BAS. For some business owners this can be a tricky task to complete. You simply may not have the time or any bookkeeping experience, or both. In this article on how to do a BAS statement we will give you some practical tips and examples of how to best approach doing a BAS statement.
The first step is to make sure your books are clean and up to date with the GST recorded correctly. Getting in good habits and staying on top of your bookkeeping and doing your bank reconciliations regularly will go a long way to ensure you can properly manage your BAS statement requirements. Book out some time in your diary each week to go through and properly code and reconcile your bank statements, supplier payments and customer transactions. If you don’t do this and let your bookkeeping workload build up it will become harder and harder to complete your BAS statement and greatly increase the chances of making costly errors, in both time and money. We have seen many examples of customers whose books are a total mess, making it hard to submit BAS statements on time and in order, and they end up with fines and interest charges from the ATO.
Another good example of making BAS statement preparation easier is to use receipt and invoice management apps such as Hubdoc or Dext (formally Receipt Bank). Most of you should already be onto this, but if you’re not get onto it now, Hubdoc comes free with a Xero subscription. With these apps you simply take photos of your receipts then send them to a specified email address and they are all stored on the app, making it easy for you to reconcile. The app reads the receipts and also invoices and populates information so you don’t need to manually enter it. Simply check, click approve and then it is synched directly to Xero or MYOB. Just the use of this app alone will make preparation of you BAS statements so much easier and faster.
If you are trying to do your BAS preparation without use of a proper accounting software application like Xero, MYOB or QuickBooks you will find the process very laborious. Hopefully you are at least storing your receipts digitally and not showing up to you bookkeeper or accountant with a shoe box full! It still does happen, there will be many BAS statement examples of how not to do things! So if you’re not already, get yourself onto Xero to manage your bookkeeping requirements. We find that Xero with its single ledger accounting approach to be the best accounting platform for trades and services businesses. That said any major accounting package is a must to stay on top or your bookkeeping and ensure you are able to do a BAS statement properly.
When it comes time for lodgement of your BAS there are a few the key things you need to think off:
- Make sure all receipts and supplier invoices are entered
- Make sure all customer invoices are entered
- Make sure all payments out are reconciled
- Make sure all customer payments are allocated off their matching invoices
- Enter all cash payments into your system, you can just record these against your loan account
- Check any deposits or lease repayments have the correct GST recorded, if they include GST
- Check your wages and wages payable accounts balance
Once you are happy you have all your transactions entered correctly and ready for lodgement, it’s time to hand over to your BAS Agent. Most business owners will take their BAS for lodgement to their accountant, which makes perfect sense. Though one thing to be aware of for them to prepare your BAS you could be paying accounting rates at 15 minute intervals. There are many bookkeepers out there who are also registered BAS Agents. This means they are more experienced bookkeepers who have undertaken further training and spent documented time preparing these documents. They are specifically registered with the Tax Practitioners Board to undertake these activities and bound to continuous training and a code of ethics. They can also help you stay on top of your daily bookkeeping needs as well as helping you do you BAS statement examples which is why they are a better investment than a simple bookkeeper can be.
Now if you’re a tradie there is an even better option out there for doing your own BAS, you can use a tradie specialist BAS Agent and bookkeeping service like Office Shed. Office Shed only works with trades and service businesses meaning we understand the intricacies of trades and services businesses. Importantly we understand major job management apps and in fact partner with them. We are ServiceM8, Tradify, simPro, Fergus, Ascroa and AroFlo partners, so we can go into those systems and get the important information needed for your BAS statements and bookkeeping needs. We are also Xero Gold partners so we have great experience working on that platform. If you engage a company like Office Shed you don’t have to worry about how to do a BAS statement and can instead focus on other parts of your business.