Most businesses now spend more than ten hours a month on their BAS. John Corias of m.a.s. accountants has five tips to help you manage your BAS so it is less onerous.
A recent study released by MYOB Australia has thrown up some surprising statistics about small business in Australia. The report highlights a number of areas of concern for small business owners, namely the complexity of complying with ATO requirements as well as the issues surrounding the collection of GST on behalf of the ATO.
Most businesses reported that they are now spending up to 10 hours per month on preparing BAS data for the ATO, with over a third of small business owners also stating that they thought the BAS paperwork was overly complex. Now, from a small business accountants point of view, I can understand where they are coming from. For a small business owner, with no formal training in Australian income tax and GST laws the administrative requirements would become quite complex, leaving business owners feeling resentful of the ATO and the entire process of collecting, reporting and paying GST. Hence why, 59% of small businesses feel like they are an administrative department of the ATO. It is also surprising that whilst 75% of small business owners are begging for the BAS process to be simplified because they find it too complex, that 75% of small business owners who do their own BAS reporting are still confident that they are getting it right.
The second aspect of this MYOB report into small business is the alarming statistic that only 35% of small businesses are actually putting money aside on a regular basis so that they can pay their monthly or quarterly BAS as and when it falls due. We can appreciate that the economy is tight at the moment for many businesses, but using the ATO as a source of working capital is fraught with danger. Due to recent funding increases, the ATO is chasing more and more small businesses and making it increasing difficult to negotiate payment arrangements for clients that have ongoing debts to the ATO. By meeting your ATO obligations you will have a much better appreciation of your true cash flow position and be in a better position to plan your business finances for success.
From our experience as small business accounting specialists, I can assure you that there are many business owners out there who are quite misguided in thinking that they are getting it right. So here are some key pointers for small businesses that can help them with their BAS obligations:
- Always lodge your BAS on time
- Try and put away funds so that when BAS is due, it’s not panic stations
- Follow up on debtors to assist with cash flow
- Don’t be reliant on the ATO as a source of funds
- If you are on a payment arrangement with the ATO, stick to it
About John Corias:
John Corias, Senior Partner at m.a.s. accountants has close to 25 years experience in small business accounting. m.a.s. accountants have been servicing small businesses in Australia for almost 50 years and are public accountants with the National Institute of Accountants.