Some small business owners may take a lackadaisical attitude towards accounting. They know that they will have to account for their sales and make the correct deductions before they send the relevant reports into the ATO, but they may leave it to the last moment, only to wonder why it is so difficult to reconcile.

If your Business Activity Statement is due shortly, what are some of the things that you should do now in order to prepare correctly?

Catching up

The best solution is to have a solid bookkeeping and accounting strategy in place during the year so that when it is time for you to send in your BAS, the job is relatively simple. In order to catch up, however, try to organise your invoices and receipts and convert most of that unwieldy paperwork into digital form. This will make it easier for you to use any online accounting program.

Reconciliation and Unusual Transactions

Have a look at your bank account and get ready to compile a reconciliation report. It is a good idea to have a look at any historical BAS statements and always try to match like-for-like as you move forward. In an ideal world, you should avoid anything unusual or that might trigger a red flag when it is submitted to the tax authority. If it is valid, make sure that you have all the paperwork in hand to back up your claim.

Payment and Cash Flow

You may well need to send in a payment to match the figures that you include on your statement. Make sure that your cash flow is in good order and that you have the funds available before they become due. If cash flow is a bit of a problem, think about using a credit card to make your payment on this occasion. You will then have a grace period before you need to settle the credit card account, and this may be a better solution than delaying your payment altogether. In this case, you may have to pay interest and penalties to the ATO as well.

Error-Free?

The Business Activity Statement itself can be quite complicated and not as user-friendly as it should be. It is easy to make mistakes, like mixing up your private or business usage. Unfortunately, mistakes can also carry repercussions and may result in an underpayment, penalties or interest.

Best Approach

All things considered, it is best to hire a service to help you with BAS preparation. They can help you to catch up if you are behind in your bookkeeping and can make sure that you will not run into problems in the future as well.