For many business owners, Business Activity Statements can feel like just another administrative task competing for attention.
But BAS mistakes can create unnecessary stress, disrupt cash flow and make it harder to understand the true financial position of your business.
The good news is that many BAS problems are preventable. With strong bookkeeping processes, good financial habits and the right professional support, BAS can become a routine part of running your business rather than something you dread every quarter.
Here are seven common BAS mistakes — and how to avoid them.
- Leaving Everything Until the Last MinuteOne of the biggest mistakes is waiting until the BAS deadline is approaching before looking at your records.
Trying to reconcile months of transactions, locate missing receipts and correct coding errors at the last minute can quickly become stressful.
Keeping your accounts updated throughout the reporting period makes BAS preparation far easier and gives you time to resolve any issues before lodgement.
- Spending Money That Should Be Set AsideCash in your bank account does not necessarily mean all of it is available to spend.
GST collected and amounts relating to other tax obligations may ultimately need to be paid to the Australian Taxation Office.
Consider setting aside tax-related amounts regularly so you are not caught short when your BAS becomes payable.
- Poor Record KeepingMissing invoices, lost receipts and incorrectly categorised transactions can all affect the accuracy of your BAS.
Good record keeping is not just about compliance. It can also give you a clearer understanding of where your money is coming from and where it is going.
A good bookkeeper can help establish systems that keep your records organised and current.
- Claiming the Wrong GST CreditsNot every purchase automatically allows you to claim GST.
Transactions can be treated differently depending on the expense, how it is used and whether GST was actually charged.
Incorrectly claiming GST credits can create problems later, so if you are uncertain, seek advice rather than guessing.
- Forgetting to Reconcile AccountsYour accounting software may show one figure, while your bank account tells another story.
Regularly reconciling your bank accounts, credit cards and other financial records helps ensure the information being used to prepare your BAS is complete and accurate.
It can also help identify duplicated transactions, missing payments and other bookkeeping errors.
- Ignoring a BAS Because You Can’t PayCash flow problems happen, particularly in small business.
But avoiding your BAS because you are worried about the amount payable can often make the situation more difficult.
Speak with your accountant as early as possible. Understanding the amount owed and getting professional advice about your options is far better than simply allowing deadlines to pass.
Importantly, a cash flow problem may also point to a broader business issue that deserves attention.
- Trying to Do Everything YourselfBusiness owners are often incredibly capable, but that doesn’t mean they need to handle every financial task personally.
Bookkeeping and accounting are areas where professional support can save time and potentially prevent expensive mistakes.
A bookkeeper can help keep your records current, reconcile accounts and maintain accurate financial information.
An accountant can help with tax obligations, business planning and interpreting what your financial figures mean for the future of your business.
BAS Shouldn’t Be a Last-Minute Surprise
Your BAS can provide far more than a tax obligation. It can also be a regular opportunity to review the financial performance of your business.
If your bookkeeping is up to date, your accounts are reconciled and money has been set aside for upcoming obligations, BAS time becomes far more manageable.
It also means you have better financial information available when making decisions about staffing, pricing, investment and growth.
The key is to stay organised, stay informed and ask for help before problems arise.
With a trusted bookkeeper managing the detail and an accountant helping you understand the bigger picture, you can spend less time worrying about BAS and more time concentrating on building a stronger business.
If this article has inspired you to think about your unique situation and, more importantly, what you and your family are going through right now, please get in touch with your advice professional.
This information does not consider any person’s objectives, financial situation, or needs. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation, or needs.
(Feedsy Exclusive)
