What are BAS Services?
How much do Bas Services cost?
It’s all a mystery if you are not an accountant or a bookkeeper for a small business.
It all goes to compliance requirements of businesses to lodge a BAS and GST. Some businesses also have a PAYG requirement. We will look at all this detail further below.
If you are only after costs (And not really after an explanation of what BAS services actually) please scroll down towards the bottom of this post.
For more details on our Bookkeeping and Bas Services, please watch the video below:
What is BAS?
BAS stands for Business Activity Statements. It involves GST. Here’s another acronym to be aware of. The TPB or the Tax Practitioners Board. These guys manage the licensing of tax and BAS agents. Both can provide BAS services although in most instances it seems to be more and more the province of bookkeepers.
For some reason, business owners think they all need to lodge BAS’s. That is not the case. Not all businesses need to be registered for GST. Yes, yet another acronym. GST stands for Goods and Services Tax. If your business is turning over more than $75,000, you have to register for GST. By law.
As a side note, this registration requirements vary for charities. If you are looking at the latter, please speak with your accountant to find out more.
How does GST work and why a BAS service?
GST is collected by businesses and remitted to the government. This can be on a monthly basis, quarterly or less frequently, yearly. Most tend to think it is only a quarterly affair. Not true. Again, consult your accountant or the ATO’s website for more details for the frequency at which you need to lodge.
If you are registered for GST the purpose of the BAS (Business Activity Statement) is to ensure that the money you collect for the Australian Government is paid to the Federal government on a regular basis.
The first step for most will be to get an ABN. But let’s not get ahead of ourselves. Let’s look at an example.
Example of BAS Services:
Say you are required to be registered for GST and sell $100 items. You will be required to charge 10% extra and collect that $10 and remit it to the Australian government. Except if you had a $100 purchase, with $10 in GST. Then those two $10’s would cancel each other.
However, if you make a profit, you would likely end up paying GST to the government. But let’s circle back to yet one more acronym i.e. the ABN or also known as the Australian Business Number. (There are also more technical services available than just basic BAS services and bookkeeping. Click here to find out more)
Well, firstly – what is an Australian Business Number?
It is an 11 digit number that is unique to your business. It identifies your business or group of businesses to the government. That is what your customers and suppliers to identify you in a formal manner too. Before you worry, it is free to get one. The application is fairly straight forward.
If the application is successful, you are then registered with the ABR I.E. The Australian Business Register. That in of itself provides a certain legitimacy to your undertaking.
What does that have to do with GST?
Registering for an ABN allows you to do a few things:
-You can register for GST (Tax compliance, ATO) and sort out your business name too.
-The AUSKEY. You get one and that allows to sort things out with government agencies
-If you want to go the charity route, you can be endorsed as a DGR (Deductible Gift Recipient)
Is GST and BAS the same?
When you register for the ABN and GST, the ATO will send you a BAS some time before the BAS is actually due. Some businesses will also get the notification for the PAYG dues. So, BAS is not just about GST. However, you don’t need to register for GST if you expect the business’s GST turnover will be less than $75,000. That is ok as long as you don’t try to claim gst credits on your expenses.
The ABN is definitely also an identifier when you conduct business. You will use it even when trying to register the domain of a website for your business.
Other obligations/services that come with the BAS.
You will use the BAS to report:
-Goods And Services Tax
-PAYG (Pay As You Go) Instalments. Also known as PAYGI.
-PAYGW (Withholding)
-Other tax obligations as well
So, it is quite key to running the compliance side effectively. Your bookkeeper, hopefully that is us, will be all over this one.
If you are registered for GST, you will have to take care of this – by law. There will be due dates, deadlines and “bookkeeper compliance” fines if not.
What can a BAS agent provide as a service?
Providing a BAS service, means to lodge your financial information to the ATO for BAS reporting. That is a task that either you – or a registered BAS agent can do that. That can also be someone who is a registered tax agent i.e. your accountant.
They have to be registered with the Tax Practitioners Board for the tasks you are delegating to them. For them to obtain these registrations, they have to have undergone extensive training. These agents would have accumulated experience working for another with much more experience too. Furthermore, they also require insurance to cover for accidents. BAS agents are under legal obligation to do the right thing i.e. the reason why many business owners feel safe using one.
How to promote BAS services
The tax agent services act 2009 and section 50 is quite discerning in terms of who can promote BAS or TAX agent services. If you look at our website (and others too), you will see certain similarities e.g. the disclaimers and other sections. This is carefully policed by us.
Bookkeeping and BAS Services.
A few steps need to be observed.
First of all, not all transactions have a GST implication. Your BAS agent will be trained on this, as part of the BAS services they provide. This scrutiny starts even at the point of data entry. This will keep on going, through the bank reconciliation. Most times, the accounts in your software can be pre-determined to have GST or not.
That means simply coding an expense to the right account, takes care of GST for you to a certain extent. And vice versa. That means your bookkeeper will know what transaction does not have gst, then that transaction is coded to a very particular account.
What else is included in the BAS service?
You may be aware of what a bank reconciliation is already. If not, that is the manual process when bookkeepers code the transactions that come from the bank statement – into the accounting software. They have to be coded to the right accounts, as explained in the preceding section.
Right before lodgement, many BAS software allow for a summary of the transactions. This should be double checked as it is the last opportunity to catch any mistakes.
Once lodged, payment is due to the ATO. This is usually made via a payment slip. If you need help with any of the above, please don’t hesitate to reach out. We are here to help & you don’t have to do it alone. Click here for more information.