The Basic Steps in BAS Statement Preparation
By definition, BAS or Business Activity Statement is a form submitted to the Australian Taxation Office by all business to report their taxation obligations. This statement is filed monthly, quarterly or annually depending on your business structure.
How to prepare BAS statement?
Normally, the ATO provides a statement to your business two weeks prior to the end of the reporting period. You must complete it and return it to ATO on the due date specified. You may also be required to pay any amount your business owes to ATO.
Take note, it is vitally to appropriately complete the basic steps in BAS statement preparation because mistakes denotes penalties. For legitimate or honest mistakes, it is within the interest on the amount you have overlooked to report. Penalties can be severe once ATO determines it was due to ignorance of the tax laws or carelessness.
To ensure the accuracy of information you compile for the BAS, here are some checklist to make the preparation simple.
1. Ensure that all accounts are entered and categorised
Statements must be entered and categorized for the period covered by the BAS return.
2. Ensure that all groupings required by BAS are correct
In case you have added another code or have not set-up Custom Groupings, this must be checked before running the reports. A BAS report has a number of checks to identify whether it is correctly set-up or not, hence always review it from time to time.
3. Run the Group Exception Report
As the report type, select “Grouped Exception Report” and select the accounts to check and key in the date range you will be using for the BAS.
4. Run the BAS report
You can either choose “BAS Reports” or “BAS Reports + Unlinked” as the Report Type. Most used “BAS Reports + Unlinked” since this report exports all transactions with a business code on the specified date range. In case you have used a code not specified in a grouping, a list of all unprocessed codes is added on the report.
“BAS Reports” exports only those codes associated with the nominated groupings. In case you miss a grouping, these codes are not included in the report.
5. Fill-up the Business Activity Statement
After checking the report, transfer the amount to your Calculation Worksheet and Business Activity Statement, sign it and submit and you’re done.
6. Always Keep A Record
With the Goods and Service Tax (GST), you can expect an audit from ATO anytime, hence make sure you have a record keeping and back up database to make the audit simple and smooth.