Your Business Activity Statement (BAS) is one of your most important tools when it comes to operating a business in Australia. Keeping your records up to date and accurate will save you time and money when it comes time to submit your BAS. We are going to share 4 reasons why you need to keep track of your business activity.
Financial penalties are imposed on any business operating in Australia which fails to submit a timely and accurate BAS. For small businesses with an annual turnover of less than $1M, fines begin at $110 for every 28 days the BAS is overdue, with a maximum fine of $550. Larger businesses will receive exponentially larger fines, ranging from twice the small business penalty for a medium sized business, to 500 times that for major global businesses.
If your business is owed money according to ATO guidelines, then failing to submit an accurate BAS is leaving money on the table. Businesses who fail to include all necessary information following the guidelines or owe tax debts will have their refund withheld until the issues are found and resolved.
The Cost of Mistakes
The information you provide to the Australian Tax Office (ATO) in your BAS will dictate the amount you pay in Goods and Services Tax (GST), Pay As You Go (PAYG), fringe benefits, wine equalisation and luxury car tax.
It is human nature to make mistakes, but when it comes to reporting your BAS you should always take the utmost care to analyse and thoroughly calculate GST and other taxes requirements to ensure accurate information. The consequences of mistakes on a BAS are wasted time and resources, as a new form must be filled and submitted to the ATO. Additionally, penalties for inaccurate statements and general interest charges may also apply.
Tracking your Business
Business Activity Statements aren’t just a tool for the ATO to track and analyse your business, you can use it for the same thing. Your BAS requires you to collect information including sales, expenses, wages and costs. Utilising these records to track the measurable statistics of your business will give you greater insight into the way your business operates, help you set budgets, and set future predictions and milestones.
Keep your records up to date and track them consistently throughout your BAS periods. With an accurate and up to date BAS, you can utilise your gathered information to analyse and develop your business with educated decisions over time.