The Secret to an Error-Free BAS Report

What To Do So You Don’t Lose Money When Doing Your BAS

lodging correct business activity statements
Why pay more money to the ATO at your expense? A good bookkeeper may save you money when it comes time to lodge your BAS.

If your business is registered for GST, it means you have to file regular activity statements with the ATO, usually each quarter. A lot of business owners export their Business Activity Statement (BAS) data straight from their accounting software, like MYOB or QuickBooks, and quickly prepare their BAS’ that way. But this is an imprecise method, and one that could be costing you money.

Tracey Marino, an experienced bookkeeper based in Rockingham, WA, knows how important it is that businesses of all sizes keep their Business Activity Statements error-free so as not to end up costing business owners money. 

An Error-Free BAS in 6 Steps

Here’s six steps you can take for an accurate BAS:

  1. Check to ensure all bank, credit card, overdraft, loan, and petty cash accounts are reconciled with the original bank statements at the end of every BAS quarter.
  2. Print your monthly profit and loss (P&L) report for the respective BAS quarter, and check for abnormalities in income or expenditure over the three months. You should also compare this quarter’s P&L report with the P&L report from the previous quarter (in the same financial year), as well as the P&L report from the same quarter in the previous financial year to detect any unexpected transactions.
  3. Print out the balance sheet as at the end of the BAS quarter. Note the balances for the wage and salary, payroll, payable, super expense and payable, and PAYG and GST accounts, and investigate any abnormalities.
  4. Generate the general ledger exceptions report to review any abnormal transactions. This report will indicate any differences in the GST codes for the same types of purchases or sales by comparing the current transactions with previous transactions.
  5. Print your BAS and compare with it with last quarter’s BAS, as well as the BAS from the same quarter of the previous year, and ensure that your GST, PAYG, sales, and purchases are consistent across all three BAS’.
  6. Lodge and pay your BAS on time to avoid penalties, and remember to record the BAS payment in your accounting software.

Although this may appear to be ‘double handling’, in fact, it eliminates double handling by ensuring that the activity statements you lodge with the ATO are correct and error-free. Typically, the mistakes this method turns up are ones that would be of benefit to the ATO and not to the business owner. So rather than give the ATO more money than you need to, make sure you follow this method for an error-free BAS lodgment.

An Experienced Bookkeeper in WA

bookkeeper-rockingham-wa
Tracey Marino is available to provide bookkeeping services in the Rockingham area of WA.

Looking for a reliable and accurate bookkeeper to manage your business’ daily or weekly bookkeeping and accounts, either in the cloud (remotely) or in-person?

Tracey Marino is available to service businesses located in Port Kennedy, Warnbro, Baldivis, Secret Harbour, Golden Bay, Safety Bay, Shoalwater, Rockingham and Cooloongup, WA. Tracey is a an expert in MYOB AccountRight, QuickBooks and Microsoft Excel and can prepare and lodge your company’s BAS, set up credit management systems, along with carrying out all manner of day-to-day accounting functions for small to medium businesses. Find out more about Tracey’s experience at her profile page.

Our National Bookkeeping website has recently undergone a significant upgrade so keep a look out for more stories about featured bookkeepers in forthcoming blogs. Join now and we can feature YOU in our articles too.

What if a Credit Check Comes Back Negative?

Do You Have to Drop a Client Because of a Bad Credit Check?

customer-with-bad-credit-rating
It’s only business: but sometimes a bad credit rating doesn’t mean you have to end the working relationship.

A Credit Check is one of the most important first steps of good credit and debt management but you can still do business if the check comes back negative.

In our previous post on credit and debt management, we recommended that all businesses — regardless of whether they offer credit to customers on a 30-day account or not — perform a credit check on any new client who will spend more than $1000 on goods or services in one sale, on an ongoing basis. But what should you do if the credit check comes back negative, and shows that the potential customer is guilty of late payments, pending legal action or already carries a significant level of debt?

It may not be a case of having to turn a potential customer away. You may still be able to offer services to the customer without the risk that they won’t pay by trying the following approach, before refusing them entirely:

Advise the Client of the Bad Credit Rating

If the client filled out your credit application or work authorisation form, which should have stated that you were collecting their information for the purpose of credit check, there may be a good chance they filled it out in good faith and they’re unaware of their bad credit rating. There may be a reason for the rating, like, for instance, that the business was recently sold. It may even, potentially, stem from an ongoing dispute with another supplier over the standard of their goods or services (although proceed with caution here, as this, too, throws up a few red flags).

Look a Little Closer

When you search deeper, you might discover that the customer experiences predictable fluctuations in trading conditions which render them more vulnerable to being cash flow poor at certain times of the year. You may be able to accommodate this in how you design your credit terms with this customer. You might also ask for a list of suppliers (ensure you get a complete list, not one that has been hand-picked by the customer to only show them in a positive light) who you can call and verify as to their likely credit risk for future.

Request Payment in Advance

This said, a bad credit rating is a bad credit rating, even if the client has a perfectly good and reasonable explanation for you. You have the upper hand here, so you’re well within your rights to only agree to do business with this client so long as they pay for your goods or services in advance.

If you’re a supplier, say, of goods and your delivery driver has the capacity to accept cash payments on delivery, you may accept COD, however it’s not recommended. If the client is unwilling to prepay for your goods or services, then there’s a good chance they’re not acting in good faith, and so you’re best to avoid doing business with them.

Need a Bookkeeper? Sydney’s North Shore

good-qualified-bookkeeper
We have qualified, professional bookkeepers available Australia-wide.

If you’re in need of some help with your own business’ credit and debt management and are seeking a reliable bookkeeper to manage your daily or weekly bookkeeping and accounts, either remotely or in-person, we are pleased to recommend Roz, qualified bookkeeper based at St Ives, with tertiary qualifications in accounting. She is a National Bookkeeping member and comes to us with the practical experience of having operated her own business and proficient in the day-to-day accounting functions of a small business. Visit her profile page and Request a Quote for Bookkeeping Services.

Our National Bookkeeping website has recently gone through a significant upgrade so keep a look out for more stories about featured bookkeepers in forthcoming blogs. If you’re a bookkeeper why not join and we can feature YOU in our articles too.