How do Australian trade businesses make BAS preparation easy?

BAS week. Your bookkeeper wants the numbers and you are trying to remember which invoices were paid, where the receipts went, and whether the big materials order landed in this quarter or the last.

It does not have to go like this. When the books are kept up during the quarter, BAS becomes a report you run and check. This guide covers the rules that matter for an Australian trade business and the weekly habits that make BAS easy. It is general information, so check anything specific with your accountant or BAS agent.

When is BAS due, and who has to lodge it?

Businesses registered for GST lodge a business activity statement, and quarterly lodgers must lodge and pay by 28 October, 28 February, 28 April and 28 July. You must register for GST once your GST turnover reaches $75,000. Lodging late can attract a failure-to-lodge penalty.

The ATO’s BAS due dates page sets out the dates and when extra time is available. The GST registration threshold is a GST turnover of $75,000 or more. The failure-to-lodge penalty is calculated in penalty units for every 28 days an activity statement is late.

Why is BAS painful for most trade businesses?

BAS is painful when a quarter’s bookkeeping is left until the week it is due. Income sits in the job management system, expenses are spread across supplier accounts and cards, the bank has not been reconciled, and GST codes were guessed. Fixing three months of that in one sitting is where the stress comes from.

The usual causes:

• Scattered records. Invoices in Fergus, materials on three supplier accounts, small purchases on a card, receipts in the ute.
• No regular reconciliation. Duplicates and miscoded transactions only surface at BAS time.
• Wrong GST coding. Not every purchase includes GST, and guesses add up.
• Cash and GST out of step. On an accrual basis you can owe GST on invoices clients have not yet paid.

Should you account for GST on a cash or accrual basis?

It depends on your cash flow, and many trade businesses have a choice. The ATO says businesses with an aggregated turnover under $10 million, or that use cash accounting for income tax, can choose either method. On a cash basis you report GST when you are paid, which suits businesses with slow-paying clients.

Under the ATO’s accounting method rules, an accrual (non-cash) basis means reporting GST in the period you issue the invoice, whether or not the client has paid. If you invoice $50,000 in a quarter and collect $35,000, you still account for GST on the full $50,000. Talk to your accountant before switching, and whichever method you use, set GST aside as it comes in.

Is residential construction work GST-free?

No. There is no general GST-free category for residential building, landscaping or outdoor construction work. If you are registered for GST, work for homeowners is a taxable sale like any other. The residential property rules that do exist cover selling or renting premises, and they matter more to developers than to contractors.

The ATO explains that if you build new residential premises for sale you are liable for GST, and that selling or renting existing residential premises is generally input-taxed. If you think a job might be treated differently, check with your accountant before you quote it.

What can’t you claim GST credits on?

You cannot claim GST credits on wages, because there is no GST on wages, and you cannot claim credits on purchases that did not include GST. The ATO lists the cases where a credit cannot be claimed. Coding these correctly as you go is one of the simplest ways to keep your BAS right.

The ATO’s page on when you cannot claim a GST credit covers wages, private purchases and purchases from suppliers who are not registered for GST. When in doubt, ask your bookkeeper instead of guessing.

What weekly habits make BAS easy?

Four habits do most of the work: invoice promptly from the job, code expenses as they happen, reconcile the bank every week and chase overdue invoices on a schedule. Fifteen minutes a week keeps the books clean, and clean books turn BAS into a report you run and check.

Invoice from the job, promptly

Raise invoices as soon as work or a stage is complete, from the job record. When Fergus sends invoices to Xero automatically, one entry updates both systems and income is recorded in the right quarter.

Code expenses as they happen

Photograph the receipt and code it before you leave the supplier’s car park: materials, subcontractors, vehicle, equipment hire. Keep business and personal spending on separate accounts so nothing needs untangling later.

Reconcile every week

In Xero, bank reconciliation means matching imported bank lines to transactions. A mystery payment from three days ago is easy to identify. One from three months ago is not.

Chase what you’re owed

On an accrual basis you can owe GST on invoices that have not been paid, so collecting on time protects your BAS as well as your cash flow. ArcReport flags overdue invoices every Monday from your Xero data, so nothing ages unnoticed.

How do you prepare and lodge BAS once the books are clean?

Run the activity statement report for the quarter, check it against what you expected, confirm GST codes on anything unusual, then lodge through your agent or directly. With clean books this is an hour of checking.

1. Run the activity statement for the quarter. In Xero, you can lodge your activity statement directly once connected to the ATO.
2. Sanity-check sales, purchases and net GST against a normal quarter.
3. Review GST codes on large or unusual transactions.
4. Lodge through your BAS agent or yourself, and pay by the due date.

What else do building and construction businesses lodge?

If your business is in building and construction and pays contractors, you probably also need to lodge a taxable payments annual report (TPAR) by 28 August each year, listing payments made to contractors. Keeping contractor details and payments clean through the year makes it a quick job.

The ATO’s TPAR page sets out who must lodge and when. The ATO also expects you to keep most business records for five years, so store invoices, receipts and contractor records digitally.

If you also trade in New Zealand, GST works differently there: IRD requires registration once turnover reaches $60,000 in 12 months, and returns can be filed monthly, two-monthly or six-monthly depending on turnover.

Where does WorkArc fit?

WorkArc does not do your bookkeeping or lodge your BAS. It builds the system around it inside Fergus and Xero: invoices raised from jobs, and the weekly numbers, overdue invoices included, delivered by ArcReport, so your bookkeeper starts each quarter with clean, current data.

Little and often beats big and panicked. Keep the books ticking over each week and BAS becomes a report you check, not a week you lose.