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Techniques For Making Timely BAS Payment

Techniques For Making Timely BAS Payment

When it comes to managing your business, ensuring timely BAS payments is an obligation you just can’t afford to miss. Some business owners find themselves under the cashflow pressure, trying to make sure that they don’t delay payments. For small businesses, you can keep your compliance costs to a minimum if you opt for quarterly payment. However, you still need to be very careful when choosing your repayment plan and you should understand the risks involved.

How to lodge BAS payment with ease?

1. Set up payables account that can attract higher interest.

The bank account you set should also be linked to your transaction account via internet banking. Make sure the account obtains a higher interest rate than the account you use for your transaction. The money stays in your account for up to three months and this is considered a term deposit account. Make sure you have a separate account for your business and treat the account you set up as payables account only.

2. Ensure regular payables amount transfer.

Depending when bookkeeping is done, the bookkeeper should not forget to reconcile to the bank transaction listing as soon as the report is released. The report should include the total of your liabilities such as the GST liability, PAYG withholding payable, Superannuation payable and other payables that are applicable to your business.

You should ensure that the balance in your bank account is accurate. Which is why, the total amounts  indicated on the report should be for the current period. Your bookkeeper will inform you in case there is an Income Instalment Amount or also referred to as PAYG Instalment amount. If the Income Instalment Amount is present, it should be divided by the number of weeks in the quarter.

Once you have calculated the total amount of liabilities for that quarter, the next step you have to take is to transfer the amount to your payables account. Make it a habit to check your account’s balance every week. This is the best practice to follow as it prevents paying too many debts all at once. If necessary, top it up so you can ensure that the account keeps the exact amount you need when your payables are due. Complete your bookkeeping every month and make sure the amount for your payables are available.

3. Get the amount for your liabilities from the payables account you set up.

You can also get your payment for superannuation and BAS from the payables account you have set up. Make sure that the payable account’s balance should be in proportion to the amount of your liability to the superannuation funds and the ATO.

This simple and basic procedure can save you from incurring penalties and extra charges for delayed payments. You also ensure that your liabilities are separated from your business funds. Liabilities are considered debts that your business has already incurred and must be paid when they are due.

Your cashflow won’t suffer when you employ these basic techniques. When you have a payables account, you don’t have to worry when your liabilities come due. It will remain in your account until your payment schedule.

Tamara Deterding

Written by : Tamara Deterding

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