Improving record-keeping for Business Activity Statements (BAS) is crucial for accurate and efficient management of Goods and Services Tax (GST) obligations. To enhance your record-keeping practices, begin by maintaining comprehensive records of all sales, expenses, wages, and other business costs, as these are the foundation of accurate BAS and GST management. It's essential to document everything meticulously, including stocktake records and logbooks, which provide evidence of your business activities and support your BAS claims. Regular reconciliation of sales figures with bank statements helps identify discrepancies and ensures accurate reporting.
Choosing the correct GST accounting method that suits your business, whether it’s cash or accruals basis, is key to consistent and accurate reporting. Retaining all tax invoices and other GST records for at least five years is not only a legal requirement but also ensures you have the necessary documentation to support your claims. When it comes to GST credits, claim only the business portion of purchases and avoid claiming GST on private expenses. Use the discounted price when claiming GST credits on discounted purchases and keep track of foreign currency invoices to ensure accurate conversions and claims.
For purchases that don't include GST in the price, such as bank fees and stamp duty, or GST-free items like basic foods, remember not to claim GST credits. Also, be cautious with imported goods; unless you're the importer and the goods are for your business, GST credits should not be claimed. Invoices should accurately reflect GST and only tax invoices for purchases over $82.50 (including GST) should be used to claim GST credits. Avoid duplicating invoices in your records to prevent inaccurate reporting.
To avoid manual errors, ensure accurate calculations by using the correct GST formulas and include a separate GST column in your cash book. Reconcile this column regularly to ensure that totals match and classify transactions correctly in your accounts payable and receivable systems. An electronic record-keeping system tailored to your business type can streamline administration tasks and reduce the likelihood of errors.
Completing your BAS accurately involves identifying missing transactions, calculating GST correctly, and making necessary adjustments before lodging. Reviewing your BAS thoroughly before submission can catch errors that might otherwise go unnoticed. Keeping records organized and up-to-date is a continuous process that requires diligence and attention to detail. By following these best practices, you can improve your record-keeping for BAS, leading to smoother lodgments and better financial management for your business.