Preparing your BAS statement is something most Australian businesses need to do every quarter. It helps report your GST, PAYG instalments, and other taxes to the ATO. If you prepare your BAS statement the right way, you’ll avoid fines and stay on top of your tax work. But small mistakes can cause big issues if you’re not careful. Here are a few common errors and how to avoid them by using BAS preparation software.
One common mistake is using incorrect tax codes in your accounting system. These codes tell the ATO how much GST you’ve paid or collected. If they’re wrong, your BAS report will be wrong too. Before you start using any software, it’s a good idea to speak to your bookkeeper or BAS agent to make sure your tax codes are correct. Good BAS preparation software can help you use the right codes every time and make reporting easier.
Some things, like bank fees, ASIC charges, or car registration, don’t include GST. But many people still try to claim GST on them by mistake. This can lead to problems with the ATO. Before you claim any GST, make sure the item actually includes it. Reliable BAS preparation software will help you check this and keep your BAS accurate.
It’s easy to claim GST on items that are actually GST-free. Some government charges and payment processing fees are good examples. These mistakes often happen when you're rushing. To avoid them, take a bit of extra time to check your expenses. A smart BAS preparation software tool can warn you if you try to claim GST where it doesn’t apply. That way, you stay safe and compliant when you prepare your BAS statement.
Misreporting wages and superannuation is another potential challenge. Wages should be reported on the BAS, but this figure does not include superannuation contributions. Make sure to double-check your reporting to ensure accuracy. Accurate categorisation ensures compliance and simplifies future payroll audits.
Cash sales and purchases must be reported alongside digital transactions to avoid discrepancies. Industries like construction and building require additional attention to the taxable payments reporting process. Failing to include cash transactions puts businesses at risk of ATO scrutiny. Use BAS preparation software to help track and record all cash dealings efficiently.
Claiming GST credits for private expenses, such as personal loans or director's fees, is not allowed. Ensure only business-related purchases are included in GST credit claims. Properly distinguishing personal expenses avoids non-compliance during BAS calculations.
Large asset purchases, such as office equipment or vehicles, must be recorded as capital purchases and not under general expenses. When uncertain, consult a BAS agent to confirm correct tax code allocations for these purchases to prevent errors in GST calculations.
Claiming GST credits from suppliers not registered for GST is a recurrent mistake. Always use the ABN lookup service to confirm whether your suppliers have included GST on invoices. Verifying supplier details helps reduce errors and offers efficient BAS management.
Avoiding these common BAS preparation mistakes requires a proactive approach. Reviewing your financial records, categorising expenses properly, and correctly configuring GST details will simplify reporting. For expert assistance with preparing your BAS statement, consult the team at RetailBasics today.
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