Creating a GST Savings Account

Try using a BAS & Super Savings Account!

Creating a Savings Account for your BAS & Super 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 some new accounts, seperate to your main business trading account.

You can RENAME them Super Saver & 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 Superannuation Guarantee and PAYG Withholding, Then transfer those figures across to the Super Aver and BAS Saver respectively.

As for your GST Liability, this is a bit trickier!

The amount of GST owing will change throughout the quarter depending on your Sales and Purchases

So if you are just putting aside 10% of your gross sales, then you will be overestimating your GST Payable because you haven’t factored in the GST Credits your entitled to from all your purchases. 

So to make sure your putting the right amount of GST aside, make sure you are regularly running both your balance sheet and GST reports. 

This will allow you to optimise your business cash and prevent you from any unwanted surprises at the end of the quarter.

If you are just putting aside 10% of your gross sales then you will be over estimating your GST Payable. 

So make sure your putting the right amount aside by regularly checking your GST Report.

This will show you the exact amount of GST Payable for a specific quarter at any point in time.

You then can base your GST transfers to the BAS Saver off this amount, a far more accurate representation of your GST liability.

This will allow you to optimise your business cash and prevent you from any unwanted surprises at the end of the quarter!

If you need any advice on setting this up and learning how to read the GST reports please feel free to get in touch.