We often get asked about the BAS requirements for small business and in particular which businesses are eligible for Simpler BAS reporting. If you are a small business owner and you are registered for GST, you will be aware that you are required to lodge a Business Activity Statement (BAS) every month or quarter. As part of the Federal Government’s initiatives to reduce red tape for SME’s, they introduced simpler BAS reporting in 2017. If you’ve only recently started your business you may not have realised that prior to July 2017 the reporting requirements for businesses with a turnover of less than $10 million, was a whole lot more complicated than it currently is. So just what are the BAS requirements for small business, which businesses are eligible for simpler BAS and what information do you have to report? Let’s start with the basics…
What Is A BAS?
BAS stands Business Activity Statement and is a statement you submit to the Australian Taxation Office (ATO) to summarise how much revenue your business has generated along with some key expenditure figures. It is used to report on and pay several different types of taxes including Goods and Services Tax (GST), Pay As You Go (PAYG) instalments, PAYG withholding tax and any other tax obligations or credits that you have as a business. The ATO uses the information you submit in your BAS to work out your GST bill or refund. So effectively your BAS determines how your tax liability is assessed.
Who Has To Lodge A Business Activity Statement?
If you’re registered for GST then you will have to complete a Business Activity Statement. GST registration is required if your business has a projected annual turnover of more than $75,000. So while you may not need to be registered for GST as soon as you start up your business, if you are likely to reach this threshold, it’s probably wise to register for GST. You have 21 days to register once your business’ gross income (excluding GST of 10%) exceeds the $75,000 limit.
BAS Requirements For Small Business
If you are registered for GST and your turnover is less than $10 million per year, you’re now eligible to report your BAS using the Simpler BAS reporting format. However, if your turnover is more than $10 million you will have to complete the more detailed BAS statement.
With the Simpler BAS, you are only required to report:
- G1 Total Sales
- 1A GST on sales
- 1B GST on purchases
The following information is not required on a simpler BAS:
- G2 – Export sales
- G3 – GST-free sales
- G10 – Capital purchases
- G11 – Non-capital purchases
Your BAS must be lodged by the 21 st of each month if you pay monthly, or the 28th of October, February, April, and July if you pay quarterly. Most GST-registered businesses complete a Business Activity Statement every quarter but you will need to ask your bookkeeper to check with the ATO whether you need to do it more frequently.
It’s important to remember that you need to submit a BAS even if you did no business during that reporting period and if you are late lodging your BAS you might be charged a penalty by the ATO. You can lodge your BAS online, by post, by phone, or through your bookkeeper or accountant.
The simpler BAS requirements certainly help small businesses in terms of reducing the paperwork. However, it doesn’t change the requirement for good bookkeeping and record-keeping. Despite not having to report on as much data, you will still need this information for other reporting. Maintaining accurate, detailed records will help your accountant support you to grow your business, reduce your tax obligations and increase profitability.
As a registered BAS Agent, the team at Numera Bookkeeping help businesses to maintain detailed records and develop efficient processes to give your business the best chance of minimising their tax obligations and growing your profits. We help you to put in place back-end processes and monthly reporting that put you in the best possible position for an accountant or business advisor to get an accurate view of the business and be able to advise you without having to second guess your figures. Using a bookkeeper also means that you stay up to date with any changes in ATO reporting rules and expectations.
If your business needs support with BAS preparation and lodgement, don’t hesitate to give us a call on 07 3002 4880. The team at Numera has experience with all the major accounting software packages, including Xero BAS, MYOB, Quickbooks and Reckon. With significant experience across a wide range of industry sectors, we are able to support you with all the standard bookkeeping services as well as advising on the most appropriate accounting method for your business.
The end of the financial year (EOFY) can be a really busy time for small business owners. As well as managing the day to day running of your business, you may also be thinking about year-end bookkeeping and accounting tasks, how to ensure that your financial records are in order and how to minimise your tax liability before June 30. To help you prepare we’ve put together an EOFY bookkeeping information checklist for small business.
EOFY Bookkeeping Information Checklist
- Ensure that your Business Activity Statement (BAS) lodgements are accurate and up to date for the year to date.
- Pay your superannuation guarantee (SG) contributions by July 28 and ensure that your contributions are accurate and up to date for the year to date. If you have prior quarters outstanding, it’s best to contact your bookkeeper or accountant for advice as soon as possible.
- Reconcile your payroll and superannuation accounts.
- Reconcile your GST accounts.
- Prepare and lodge your Q4 BAS by July 28.
- Ensure your GST and PAYG withholding accounts are reconciled to the June BAS.
- If you are not yet reporting to the ATO via STP, prepare PAYG Employee Payment Summaries after the last payroll of the year is processed and ensure they are given to employees by 14th July. You will also need to lodge your Annual 2019 PAYG Payment Summary with the ATO by 14 August 2019 to avoid penalties.
- If you are already reporting to the ATO via STP, you are exempt from providing payment summaries to your employees and from lodging a PAYG payment summary annual report for the amounts you’ve reported through STP as long as you undertake the finalisation declaration by 31 July 2019.
- If your business carries stock complete a stocktake of inventory by 30 June.
- Review your Aged Creditors and Aged Debtors and write off any bad debts.
- Check any amounts held in suspense accounts.
- Collate your receipts.
- Update your asset register if you have purchased new assets.
- Reconcile all your accounts to 30 June including all business bank accounts, petty cash accounts and any other accounts you may have in your accounting software.
- Make sure you are ready for Single Touch Payroll (STP) and the July 1 deadline for all business entities, if you are not already reporting using STP. Again, your bookkeeper or accountant can assist you with getting set up so contact them immediately to avoid falling behind.
Aside from ensuring your financial records and accounts are all up to date, there are also a couple of other areas that you may want to consider before the all-important June 30 deadline to potentially reduce your tax liability:
- Pre-purchase insurance, memberships or subscriptions for an immediate deduction.
Remember that the threshold for instant asset write-off now stands at $30,000. If you purchase an asset (new or second hand) costing less than $30,000 and it is used or installed ready for use from 3 April 2019, you can claim a deduction for the business portion. Different thresholds apply for assets purchased before that date:
- from 29 January 2019 until before 7.30pm AEDT on 2 April 2019, the threshold is $25,000
- before 29 January 2019, the threshold is $20,000.
There’s a lot to think about as a small business owner. Remember that a bookkeeper can help your business in so many ways. If you require any support with BAS preparation and lodgment and keeping your payroll in order, Numera Bookkeeping Services have a team of experienced bookkeepers available to help. Work with the Brisbane bookkeepers you can trust. Give us a call today on 07 3002 4880 or email firstname.lastname@example.org to find out how we can help your business.
You may have heard that there are some important changes about to happen in how and when businesses will report wages/salary, superannuation and PAYG information to the Australian Tax Office (ATO). Single Touch Payroll will be implemented for all employers from July 1 2019. But what is Single Touch Payroll (STP) and how will it affect your small business payroll reporting requirements?
So What Is Single Touch Payroll?
Businesses used to report their wage activity once a year but with STP all businesses will need to submit a digital report to the Australian Taxation Office (ATO) every time they run a payroll. So instead of finalising your payroll records and reporting at the end of the financial year, from next month all businesses will need to report every payday.
How Does This Affect Payroll Reporting Requirements?
One of the other stipulations of the STP regulations is that businesses will need to report online using compliant payroll, accounting or business management software. You will need to report in a specific format called Standard Business Reporting (SBR). If you are already using STP compliant accounting software such as Xero, MYOB, Quickbooks or Reckon, then the process is quite simple once it has been setup. However, if you have previously used paper forms to report your payroll activity then you will need to change software or find a service provider who can do this for you. Contact our accounting software support team to discuss the options available.
If you employ four people or less there are a number of low cost / no cost standalone STP software options that keeps costs to a minimum i.e. under $10 / month.
So you will no longer need to produce:
- a payment summary annual report for the ATO showing how much the business paid in salary / wages, PAYG withholding and superannuation contributions
- a payment summary for each employee showing the same
You will just need to advise the ATO when you have run your last payroll of the year. Employees wishing to see the details that would have been on their payment summary, can log into myGov to obtain the information.
The Options For Switching To Single Touch Payroll
In terms of accounting compliance requirements for the new STP regulations, you will need to be ready to submit ATO-compliant reports every time you run your payroll. What this means is:
- If you are already using online payroll software, this should be capable of managing the task. Just double-check it produces ATO-compliant reports and get help from your bookkeepers to ensure it is set up properly.
- If you are using desktop payroll software, you’ll need to find a service that can upload your payroll reports, convert them into the ATO’s required format and submit them on your behalf.
- If you are using spreadsheets or submitting paper reports you will need to have that data converted into a compliant digital report and submitted on your behalf.
While there is an amount of short term pain in getting set up to run with the new regulations, in the long run, the automation and reduction in end of year reporting will make compliance less difficult. Now is the perfect time to consider outsourcing the payroll process to further reduce the time burden on your business.
Numera Bookkeeping Services offer Payroll Outsourcing Services and can help with all your payroll processing requirements. Our accounting software support team can also help you decide which software you need, and set it up to ensure single touch payroll compliance and managing your payroll on a monthly basis.
Work with the Brisbane bookkeepers you can trust. Give us a call today on 07 3002 4880 or email email@example.com to find out how we can help your business.
Keeping accurate financial records is fundamental to the efficient running and ultimate success of your business. Most business owners make use of accounting software and the support of a good bookkeeper to help keep them on track and ensure that all transactions are recorded in a timely manner. But what accounting method should you use? Essentially there are two approaches but what’s the difference between cash and accrual accounting?
The Difference Between Cash and Accrual Accounting
You might be wondering why choosing the right accounting method is so important for your business. The key to understanding the difference between cash and accrual accounting lies in the timing of when revenue and expenses appear in your financial reports.
Cash Accounting Explained
Typically cash-basis accounting is used by smaller businesses who prioritise simplicity. Using cash-basis accounting a company records expenses and income as the cash is actually paid out and received.
There are some advantages to using cash-basis accounting such as:
- It’s easier to keep a track of your cash flow
- It’s suited to smaller businesses that mostly handle transactions in cash
The major disadvantage is that it doesn’t capture money owed to you or that you owe to others so it can be difficult to get an accurate picture of how the business is performing financially. Take a business which delivers training funded by various different governments and receives lump payments on a few occasions a year. Using cash-basis accounting it is extremely difficult to track the health of this business because they either have ample cash or have been incurring expenses for which they are yet to receive payment.
So What Is Accrual Accounting?
Accrual accounting, whilst a little more complicated, is much better suited to larger businesses or businesses who don’t get paid straight away.
Using accrual accounting you record expenses and sales when they take place as opposed to when cash is paid or received. For example using Accrual accounting our training business would apportion lump payments throughout the year depending on when the actual training was carried out. Now income and expenses are matched and the business has a true picture of their financial position.
A word of warning though, if you are using accrual accounting you need to keep an eye on your cash flow because any issues won’t necessarily appear in your financial statements.
How To Decide Which Accounting Method Is Right For Your Business
As we’ve highlighted the type of business you are running will be an important factor in deciding which is the most appropriate accounting method. While accrual accounting may require more work, technology and decent accounting software can make this far easier. This is also where the support of a well trained, experienced bookkeeper will pay dividends. As we highlighted in our last blog exploring how a bookkeeper can help your business, they will be able to help keep your records up to date and save you time and money. And if you want to introduce accrual accounting into your business, you simply need to ask your bookkeeper to start providing you with accrual accounting financial statements.
At Numera Bookkeeping Services, we provide more than most traditional bookkeepers. With significant experience across a wide range of industry sectors, we are able to support you with all the standard bookkeeping services, including BAS preparation and lodgment, as well as advising on the most appropriate accounting method for your business. We can also support you in choosing the best accounting package for your business: Xero, MYOB, Quickbooks and Reckon.
Speak to the team at Numera Bookkeeping Services to make this happen. Work with the Brisbane bookkeepers you can trust. Give us a call today on 07 3002 4880 or email firstname.lastname@example.org to find out how we can help your business.
When you first started out in business you probably had all good intentions of managing as much of the business as possible by yourself. Maybe you were trying to keep your costs low or you felt that you needed to be in control of all of your financial information. Whatever the reason, generally there comes a time for all small business owners when they realise that they need assistance to keep things running smoothly, particularly when it comes to record keeping and transactions. So why use a bookkeeper? We’ll outline 3 ways that they can help your business to thrive. There are many different professional support services available for business owners and, as we covered in our last blog post, there is a difference between bookkeeping and accounting. While they are different services, they are actually complementary and for your business to run smoothly you ideally need both. You may have already engaged a good accountant to help advise you on ways to grow your business, how to stay tax compliant and minimise business costs but why use a bookkeeper too?
Reasons To Use A Bookkeeper:
Reason #1: Saves You Time And Money
Most business owners are time poor and the task of keeping accurate financial records, ensuring all transactions are recorded, usually gets deferred until it becomes absolutely necessary e.g. the BAS is due or it is tax time. Engaging a qualified bookkeeper saves you the time of having to review all your transactions, particularly if you have put off the task for a few months. You will also save money in the longer term as a good bookkeeper will help ensure you pay bills on time, avoiding interest and late payment fees. They will also streamline your current business systems and processes, ensuring your financial records are in top shape and your business running as efficiently as it can be. Having accurate financial records can also help you get credit from banks or other lending organisations, should you need it AND it will help your accountant spend less time dissecting your data and more time using the data to offer valuable insights to help you grow your business.
Reason #2: Allows You To Focus On Growing The Business
As the business grows so does the paperwork and record keeping. Most business owners reach a point where they realise that they are spending too much time every week chasing payments, reviewing supplier invoices or processing their payroll. A bookkeeper can take on all these tasks and more and free up your time to focus on the things that will help your business to grow. How much time have you spent in the last week trying to keep track of your sales, payments, purchases and receipts? And if you haven’t been doing this regularly, it is obviously going to be a big job when you get around to doing it and take a substantial chunk of your time to reconcile all of your transactions. How much more effective would you be if you were focusing on the thing you really love: your business?
Reason #3: Gives You Peace Of Mind
You can’t be an expert in everything. Ensuring your business is complying with the latest tax regulations outlined by the ATO and ASIC, such as ongoing changes to superannuation law, is one area where you really should be engaging the services of professionals. Engaging a well-qualified bookkeeper will help you stay out of hot water with the ATO and give you the peace of mind that all monthly, quarterly and annual deadlines are met for BAS, tax, and superannuation and your business is compliant. And if you have fallen behind a bookkeeper can also help bring your lodgments up to date and work with the ATO to manage existing debt and get your business running efficiently again. At Numera Bookkeeping Services, we provide more than most traditional bookkeepers. With significant experience across a wide range of industry sectors, we are able to support you with all the standard bookkeeping services as well as BAS preparation and lodgment, offer accounting software support for packages including Xero, MYOB, Quickbooks and Reckon. If you need the services of a local accountant, our referral partners, MGI South Queensland are on hand to offer more detailed accounting advice. Work with the Brisbane bookkeepers you can trust. Give us a call today on 07 3002 4880 or email email@example.com to find out how we can help your business.