📅 BAS Due Date is Approaching — Here’s a Practical Guide to Accurate BAS Reporting

With the next Business Activity Statement (BAS) due date just around the corner, it’s time to make sure your BAS is accurate, complete, and lodged on time.

For Australian businesses, the BAS is an essential lodgement that reports GST, PAYG withholding, PAYG instalments, and other tax obligations to the ATO. But errors in GST coding, unreconciled accounts, and overlooked anomalies can lead to incorrect reporting and potentially costly ATO follow-ups.

To help you get it right, here’s a practical, step-by-step guide to preparing and lodging your BAS correctly.

Step 1: Reconcile Your Bank Accounts

Accurate bank reconciliation is the foundation of a reliable BAS. Unreconciled or missing transactions can result in incorrect GST, wages, or PAYG figures and may trigger ATO queries.

🔍 What to do:

• Log into your accounting software (e.g., Xero, MYOB) and check that all bank accounts show as reconciled.

• If transactions are missing, refresh your bank feed or manually import a bank statement (e.g., CSV or QIF format) and reconcile.

• Code all unreconciled transactions with the correct account and GST codes.

• Cross-check your software’s reconciled bank balance with the actual bank statement to ensure accuracy.

Step 2: Review GST Treatment

GST coding is where many errors happen.

Check your general ledger to ensure transactions are coded properly:

🚫 Don’t claim GST credits on:

• Entertainment expenses (unless specifically allowed).

• Fines, penalties, or government fees without GST.

• Private or personal expenses.

• Bank charges
  

✅ Do ensure GST is claimed or paid on:

• Taxable sales and purchases.

• GST-free and input-taxed supplies are treated correctly (e.g., no GST on exports or residential rents).

• Business-related meals and travel expenses are coded correctly.

🍽️ Special note for cafés, restaurants, and food businesses:

If your client operates a café, restaurant, or similar food service business, be extra cautious when claiming GST credits on food purchases. Many food items (such as fresh produce, bread, bottled water, etc.) are GST-free, and GST credits can only be claimed on the GST portion shown on the supplier’s invoice. Always check that the invoice lists GST and matches the purchased items.

📑 Keep supporting documentation:It’s highly recommended to keep proper invoices and receipts for all expenses and asset purchases to substantiate your GST claims. This helps ensure you only claim GST where applicable and can justify your claims if the ATO reviews your BAS.

Step 3: Reconcile BAS Figures with Source Records

Before lodging your BAS, reconcile the figures generated in your software with your books and source reports.

📋 Key reconciliations to perform:

• Sales (G1): Match the total sales in the BAS report to your general ledger sales account.

• GST Collected & Paid (1A & 1B): Ensure these align with your GST liability and GST paid accounts in the ledger.

• Wages & PAYG Withholding (W1 & W2): Reconcile these to your payroll reports and Single Touch Payroll (STP) submissions.

• PAYG Instalments (T1): Cross-check against the ATO’s draft instalment amount (visible in Online Services for Business) or your calculations.

In Xero, for example, you can generate the BAS report under Accounting > Reports > Business Activity Statement, and reconcile each figure with supporting reports such as the Account Transactions Report, Payroll Activity Summary, GST Audit Report, and STP history.

🔎 Look for anomalies — unusually high or negative amounts — and investigate before you lodge.

Step 4: Prepare and Lodge Your BAS

Once you’ve reconciled all the figures:

📄 In your accounting software:

• Open the BAS report for the relevant period.

• Review each field (G1, W1, W2, 1A, 1B, T1, etc.) and ensure they reflect your reconciled numbers.

• Add any manual adjustments (e.g., fuel tax credits) if applicable.

• Double-check that all sales and wages figures include the correct taxable, GST-free, and PAYG components.

📤 Lodge your BAS:

• Via your accounting software (e.g., click “File BAS” in Xero) — you’ll need your ATO credentials linked.

• Or manually, by logging into the ATO’s Online Services for Business and entering the figures.

💾 Save a copy of the lodged BAS and your supporting workpapers for future reference.

🔷 Important Note on Backdated GST Changes

If you or your bookkeeper have changed the GST coding of transactions from a previous BAS period, you should adjust for those changes in the next BAS period. This ensures that prior overclaims or underclaims are corrected, and keeps your GST reporting aligned with ATO rules.

🚀 Common BAS Mistakes to Avoid

❌ Claiming GST on ineligible expenses (entertainment, fines, private use).❌ Reporting on the wrong basis (cash vs accrual).❌ Failing to reconcile with the general ledger.❌ Missing or uncoded bank transactions.❌ Double-counting GST (once when invoiced, and again when paid).❌ Closing invoices or bills manually without recording a corresponding bank transaction.

🎯 Final Thoughts

A well-prepared BAS starts with good bookkeeping, clear reconciliations, and a thorough review of GST coding. By following these steps, you can lodge with confidence, minimise errors, and avoid unnecessary ATO attention.

If you’re unsure about any aspect of your BAS, consult with a registered BAS or tax agent for expert guidance.

💡 How TOO Can Help Your Firm

At The Omniscient Outpreneur (TOO), we partner with accounting firms like yours to handle time-consuming BAS preparation and review. By outsourcing to TOO, you can: ✅ Save on overhead costs. ✅ Improve accuracy and compliance. ✅ Free up your team to focus on high-value client work.

Talk to us today to find out how TOO can help your firm become more efficient and profitable.