Try using a BAS Savings Account!
Creating a Savings Account for your BAS Liabilities can be a useful strategy when managing your cashflow.
The BAS Saver can be set up to ensure you have enough money set aside at the end of the quarter, when the liabilities are due to be paid.
You don’t want to find yourself in a situation where don’t have the funds available when its time to pay.
There are additional fees and tax consequences for late payments so it’s important that you pay on time.
To get started you need to open up a new bank account, seperate to your main business trading account.
You can RENAME it to BAS Saver to make it easier when going through your online banking.
Now you need to work out what amounts to transfer.
For your Wage Liabilities it’s simple!
Open the first pay-run for that quarter, Take a look at the Totals for all your Employee’s PAYG Withholding, then transfer the total figure across to the BAS Saver Account. Repeat this every pay-run until the end of the quarter when your BAS is due.
As for your GST Liability, this is a bit trickier!
The amount of GST owing will change throughout the quarter depending on the Sales and Purchases you make.
To be safe a lot of small businesses using a BAS saver will just put aside 10% of their gross sales to be sure that enough funds will be set aside for their BAS when it falls due.
The issue with transferring 10% of gross sales is that you will be overestimating your GST Payable because you haven’t factored in the GST Credits you’re entitled to that come from all your purchases.
The actual amount of GST you will need to put aside you can determine by running a few simple reports from your accounting software!
Only transferring the actual amount of GST owing each week will allow you to optimise your business cash which can be particularly important for new and emerging businesses on a tight budget.
To learn how to read these reports and make sure you’re putting the right amount of GST aside then get in touch with our specialists.
We have training programs available to teach you how to effectively manage your BAS liabilities and read your reports!