Avoid BAS stress with these simple tips
Veda Dante, May 2018
Lodging business activity statements (BAS) can be one of the most stressful periods for small and medium-sized enterprises (SMEs), especially if you're unprepared. All business owners who register for GST are required to lodge a BAS for each quarterly (or monthly) period. The following are important dates you need to know in relation to the correct lodgment and payment of your BAS:
With the ATO’s latest annual report revealing a whopping $13 billion in overdue tax is owed by SMEs, Australian businesses that lodge incorrect, fraudulent or late refund claims are coming under increasing scrutiny. Having a simple plan in place will ensure you provide the right information on time, every time. Here’s how to correctly lodge your BAS.
Due date for each quarter
|1||July, August and September||28 October|
|2||October, November and December||28 February|
|3||January, February and March||28 April|
|4||April, May and June||28 July|
Cash flow: The lifeblood of your businessWith more than 30 years’ experience in the insolvency industry, Jirsch Sutherland has witnessed Australian businesses navigate the cash flow issues that can easily result from unpaid BAS. In fact, it's around this time that Jirsch Sutherland specialists notice an influx of queries from clients. “Acknowledging that your business is experiencing an element of financial distress is a difficult admission,” says Jirsch Sutherland Partner Andrew Spring. “Most business people are reluctant to speak with an insolvency practitioner unless there is a catalyst for that discussion. When a business is struggling with juggling its cash-flow requirements, the BAS lodgment cycle can be the tipping point to seeking help.” A company’s cash flow is the life blood of its business, Andrew says. As such, all businesses that require the assistance of an insolvency practitioner have experienced cash-flow stress. “A simple test of cash flow stress is to review the ATO running balance account and see if the business activity statements have been lodged and paid on time,” he explains. “If a business is showing signs of cash flow stress, then early conversations with a specialist adviser can uncover options and subsequently solutions that address any cash-flow concerns.” [embed]https://www.youtube.com/watch?v=anePDpiNZsw[/embed]
Avoid BAS stress with these 3 tipsWhile regular tax payments like GST and PAYG can create cash-flow issues for SMEs, there are a number of proactive steps you can take before they become serious issues, including:
- If your small business is struggling with cash-flow, the ATO may be able to offer a flexible payment arrangement until you get back on track. However, be prepared to provide a valid reason for why you’re unable to pay the full amount on time.
- Non-payments attract late lodgment penalties, along with a bad lodgment record, so when it comes to your BAS, don't bury your head in the sand. The ATO acknowledges businesses who are upfront with their financial situation - before it becomes a debt – so contacting them before this occurs will work in your favour.
- Putting aside money to pay the GST and PAYG tax is always a good idea. It’s too easy to spend the GST collected from sales so one option is to open a separate bank account – preferably one paying a high amount of interest – and transfer one-eleventh of total sales received into it. At the same time set aside around 30 per cent of income received into the same account. When it’s time to do the BAS the money for the GST and tax will be readily available.