The time to lodge and pay your BAS is around the corner and as you are getting busy we would like to remind you that It’s easy to make a mistake when preparing your BAS. The key is to be aware of common pitfalls so you can avoid them. Thanks to much online accounting software, preparing your Business Activity Statement (BAS*) is easier nowadays but still, the ATO has identified several mistakes commonly made in the BAS reporting form. ATO estimates that over 80% of BAS reports are incorrect.

Here are the 11 common GST mistakes made in BAS reports.

1. Accidental double dipping on GST

When it comes to hire purchase/lease of vehicle, plant, and equipment area of the BAS, the client or the accountant will claim the full GST component in the first quarter that they purchase their vehicle. When recording their regular monthly payments, the client will either continue to code it as a GST or as a Capital Expense which will lead to confusion. Both the tax codes GST and CAP appear on their BAS Reporting sheet, causing them to ‘double dip’ on the GST. Make sure you code your monthly repayments accurately by checking your purchase invoice and BAS records.

2. Assigning incorrect tax codes in your charts of accounts

This is another mistake people commit while lodging BAS. Always ask either your accountant or BAS agent to set up your Chart of Accounts tax codes before you use your online accounting software.

3. Claiming GST against all expenses

Some expenses do not have a GST component. They include:

• Motor vehicle registrations.
• Bank charges.
• ASIC fees.
• Paypal transaction fees.
• Google Adwords.
• Interest and director fees/drawings.
• Insurance policies. The stamp duty component in the premium is not subject to GST.
• Government charges such as land tax, council rates, and water rates are FRE.
• Car registration has a partial GST component.
• Super and salary payments don’t have GST.
• Basic foods, health services, and exports don’t have GST applied to them.
• Mobile phone charges are GST-free. GST is not accounted for until the recharge purchase is redeemed.
• Gift Cards are GST-free and like recharges the GST is not accounted for until the cards are used to purchase goods.
• Donations are GST-free.

• Second-hand goods purchased from a charitable organisation are GST-free.

4. Claiming GST against all sales

Some services and products in the medical and healthcare areas also do not include GST. Also, basic food for human consumption does not include GST.

5. Including wages and superannuation in G11 as a purchase

You need to report wages and superannuation in W1 on your BAS statement. They are not an expense to be included in G11, which is for non-capital purchases.

6. Forgetting to include all cash sales and purchases

You must never discount the GST when receiving payments in cash. In the areas like building and construction business, owners are obliged to submit a Taxable Payments Report annually and the ATO has a sophisticated process of cross-matching data in these areas.  Therefore, make sure you declare all cash payments.

On the flip side, make sure you discuss all genuine tax deductions and GST credits with your bookkeeper or accountant.

7. Claiming on GST for private purchases

You cannot claim GST credit on your BAS statement for the items such as personal loans, director’s fees, and any other purchase for private consumption.

8. Reporting purchases of capital items with the wrong tax code

For any business asset you purchase that costs more than $1000, you need to report in G1 under capital purchases in the BAS and not G11.  Please seek advice from an accountant, if you have any doubts.

9. Not including capital sales in G1 (Total Sales)

This includes the sale of motor vehicles, a trade-in or office equipment.

10. Claiming GST credits on purchases where the supplier is not registered for GST

You obviously can’t claim GST if the supplier is not registered for GST and not charging it on their goods and services. While 99% of your suppliers are probably registered you need to check their source invoice to see if it is a ‘Tax Invoice’ with a GST component.

You may also go to the ABN lookup page and type in the supplier’s ABN number or check their business name.

Suppliers are bound by law to provide you with an ABN number when you purchase goods or services from them. If a supplier does not quote an ABN number, you ought to withhold an amount for that supply called “No ABN withholding”.

11. FRE, N-T or GNR: Which is the right code?

Don’t fail to use the coding FRE for GST-free sales and purchases. For example, basic foodstuff, sewerage, and water, eligible childcare, non-commercial activities of charitable institutions, and most education and health services are GST free. FRE is recorded on your BAS form.

For anything not reported on your BAS like cash transfers, deposits paid, depreciation, recording stock movements, Government charges such as FID, BADT, owners drawing, and director fees, use coding N-T

If a supplier is registered with an ABN but not registered for GST then use GNR coding.

Get help from VKonnect Solutions

Small Business owners need to have good record-keeping habits and avoid unnecessary mistakes. If you find this too difficult and time-consuming the best way to ensure that you are preparing your BAS correctly would be to outsource your BAS preparation and lodging to an external accountant/Bas agent.

VKonnect is a reputed business process outsourcing (BPO) company based in Melbourne that specialises in providing outsourcing services to Australian businesses in a wide range of industries. We are experts in outsourcing business activities in areas such as IT, accounting, administration, and customer services/support.

Contact us for any outsourcing needs in IT, accounting, administration, and customer services/support.

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Accounting and bookkeeping are essential tasks for any business, but they can also be time-consuming and complex. Outsourcing these tasks to a professional firm can provide several benefits for your company. Here are 10 benefits of bookkeeping and accounting outsourcing that you should consider:

Time-saving

Both bookkeeping and accounting outsourcing allows you to free up time for other important business activities. This is especially beneficial for small businesses that may not have the resources to handle these tasks in-house.

Cost-effective

Hiring a professional firm to handle your accounting and bookkeeping can save you money in the long run. This is because you will not have to pay for the salaries and benefits of full-time employees, and you will only pay for the services you need.

Increased efficiency

Professional firms have the expertise and experience to handle accounting and bookkeeping tasks quickly and efficiently. This can help improve your business’s overall productivity.

Reduced errors

Outsourcing your accounting and bookkeeping tasks can help reduce the risk of errors. This is because professional firms are trained to catch and correct errors, which can save your business money in the long run.

Access to advanced technology

 Professional firms often have access to advanced technology and software that can improve the accuracy and efficiency of your accounting and bookkeeping tasks. This can provide a competitive advantage for your business.

Improved compliance

Professional firms are familiar with the latest tax laws and regulations, which can help ensure that your business stays compliant. This can save your business from costly penalties and fines.

Better financial reporting

Professional firms can provide you with accurate and up-to-date financial reports that can help you make informed business decisions. This can help improve your business’s overall performance.

Increased scalability

Outsourcing your accounting and bookkeeping tasks allows you to scale your business without having to hire additional employees. This can help you save money and improve your business’s overall performance.

Access to expert advice

Professional firms can provide you with expert advice and guidance on accounting and bookkeeping matters. This can help you make better business decisions and improve your business’s overall performance.

Peace of mind

Outsourcing your accounting and bookkeeping tasks can give you peace of mind, knowing that your business’s finances are in good hands. This can help you focus on growing your business and achieving your goals.

In conclusion, bookkeeping and accounting outsourcing can provide businesses of all sizes with several benefits, including cost savings, time savings, improved accuracy and efficiency, and compliance with laws and regulations. By outsourcing these tasks to a professional firm, businesses can save time and money, while also improving the accuracy and efficiency of their financial operations. Additionally, outsourcing allows businesses to focus on their core competencies and help them grow and develop.

Grow your business with VKonnect Solutions, Australia

Headquartered in Melbourne, Australia, VKonnect Solutions is a young and energetic firm that specialises in the business of outsourcing. Established in the year 2018, we rapidly evolved into a thriving outsourcing & implementation solutions provider.

VKonnect Solutions understands the importance of loyalty and dedication in the development of a business and hence guarantees to deliver optimal results. For over 5 years, VKonnect has served its partners with a dedication to ensure every step of their business growth is geared with the right knowledge and expertise.

With a world-class talent pool and best operational and technological resources under our belt, we eliminate the hassle out of developing and managing a successful offshore team/business. We are results-driven and one hundred percent committed to fulfilling and exceeding our partners’ expectations.

Our team is obsessed with our business mantra, “Serve your customers from the heart."

Call us today for any of your outsourcing needs at 03 7034 4330

Business Activity Statement (BAS) is a monthly or quarterly tax reporting requirement by the Australian Taxation Office. Every business registered for Goods and Services Tax (GST) is required to lodge a Business Activity Statement (BAS) to the Australian Taxation Office (ATO) either monthly or quarterly, depending on its specific tax reporting obligations.

The ATO uses the information on your BAS to work out your GST refund or bill. It’s also used to calculate business income tax (if you’re in the pay-as-you-go system), employee income tax, fringe benefits tax, luxury car tax, wine equalisation tax, and fuel tax credits.

Taxation is a time-consuming and complex business process. If you are a small business owner who opts to do it yourself, some restless, tough days are ahead for you. The tough part is not paying business GST and other tax obligations, it is the preparation, computation, and filing of tax returns that are difficult for most entrepreneurs.

Suddenly you will notice that the deadline is nearing, causing panic and nervousness leading to a hurried attempt to report by the deadline. This rush will end up in committing errors that may cause your business a great deal of loss.

But you don’t need to suffer that way. Thanks to the advancement of internet technology, there are endless opportunities to improve business processes, including outsourcing. Outsourcing your taxation process, without any doubt, is a viable solution.

Accounting, bookkeeping, and taxation are ideal business processes for outsourcing. All that is needed is a professional with the knowledge, skills, experience, the government certification, and an additional factor–the eagerness to go that extra mile. Then you are set to go.

5 benefits of outsourcing business taxation

Time-saving

GST and BAS report preparation and lodgements are done monthly, quarterly, or annually.  Outsourcing helps you take out the complexity of bookkeeping, recording, accounting, and calculations from your plate. Because successful people invest only in assets that provide a positive return.

There are many kinds of assets. The most valuable, non-renewable asset in the world is your time. Use that precious time to focus on your business’ growth, management, marketing, innovation, and spending time with your family. These are the things that matter to you.

Money-saving

Hiring highly experienced and certified accountants in-house to handle your business taxation and putting all the infrastructure in place proves to be very expensive and is not the most feasible option for smaller businesses. The best option is outsourcing to an experienced and certified professional and enjoying the best of both worlds.

Accuracy and compliance

When you outsource your taxation to a professional, you can be 100% sure that the preparation and lodging of GST and BAS are done by someone trained and experienced in the process and well-versed in current tax rules and regulations in your country hence the data are accurate and compliant. The following is the list of the common mistakes noticed by the Australian Taxation Office:

• Accidental ‘double dipping’ on GST
• Incorrect tax codes in your chart of accounts
• Claiming GST against all expenses
• Claiming GST against all sales
• Including wages and superannuation in G11 as a purchase
• Forgetting to include all-cash sales and purchases
• Claiming GST for private purchases
• Reporting purchases of capital items with the wrong tax code
• Not including capital sales in G1 (Total Sales)
• Claiming GST credits on purchases where the supplier is not registered for GST

Let the experts do it

No need to fear the tax schedules and deadlines. By delegating your tax preparation, you free up yourself from long hours of backbreaking work. Outsourcing your taxation to a professional will give you the peace of mind that your taxation is being handled by an expert.

Access to top-notch tools

Outsourcing allows you to have access to the latest accounting tools. You can choose accounting and taxation professionals who are equipped with robust, and modern tools that let you manage your accounting from any part of the world. You can instantly view reports and access files anytime, anywhere and this facility is offered to you for a lower cost.

Let us do the hard work while you enjoy the benefits

Taxation time is approaching fast and worry and anxiety are bothering your mind and cripples your performance. But don’t worry, we are here to back you up. We are an outsourcing company based in Melbourne offering a full suite of outsourced accounting and bookkeeping, customer support & admin, and IT services.

We can outsource the best taxation professional for you right away from our world-class talent pool. Our outsourcing process is astonishingly fast, and we can hand-pick the right taxation professional in no time. The accounting agents we hire possess internationally recognised qualifications, years of industry experience, and dedication to excellence.

Talk to us about any of the GST, BAS, and tax requirements of your business. If you’re truly serious about taking your business to a new level of success, then we have excellent news.

For a limited time only, we’re offering you a free, no-obligation session with one of our outsourcing experts.

To claim your free consultation or find out more information about this limited-time offer, all you need to do is call us on 03 7034 4330.

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What is STP Phase 2?

When initial phase of the Single Touch Payroll (STP) was introduced, companies started adopting the system steadily and subsequently filling payroll information has become much easier for employers and in turn, collecting essential information has been easier for the Australian Tax Office. From 2018, the STP system became mandatory for larger companies and from 2019 the STP system became mandatory for smaller companies as well.

In the 2019-20 budget, the Government announced that STP Phase 2 would be rolled out providing additional benefits.

The STP Phase 2, will eliminate the reporting burden for employers who need to report information about their employees to multiple government agencies. It will also help customers of Services Australia who may be your employees, get the right payment at the right time.

The mandatory start date for Phase 2 reporting is 1 January 2022.

It was easier for Australian companies to submit their payroll information to the Australian Tax Office through the first phase. The STP enabled system, enabled the employers to automatically send payroll data to the ATO as they file their payroll information on their own internal system. STP streamlines the process removing the need to file additional reports at the end of each tax year. In the STP 1st phase rollout, the STP reports unified information such as salaries and wages, super liability information, tax, pay as you go (PAYG) withholding, and superannuation automatically. The second phase demands more additional information from companies.

How flexible is the transition?

The Australian Taxation Office adopts a flexible, reasonable and practical approach towards STP Phase 2 depending on your business readiness and individual circumstances.

You can start Phase 2 reporting if your solution is ready for 1 January 2022.  If your solution is ready and you can start Phase 2 reporting before 1 March 2022, you will be reporting on time and you won’t need to apply for more time.

Digital service providers (DSPs) who need more time to make the changes and update their solutions to support STP 2 can apply for a deferral for their customers.

Until 31^st December 2022, there won’t be penalties for genuine mistakes for the first year of Phase 2.

You can apply for more time past your DSP’s deferral if you need more time to transition. Your registered agent can also apply on your behalf.

Benefits of STP Phase 2

Benefits for employers

The first phase of the STP rollout tries to streamline the payroll process through quick and easy submission; the second phase will reduce redundancies in the reporting and submission process. This will prevent mistakes and make tax returns easier for both employers and employees because so much of the data will have already been collected.

For example, employers will no longer need to do the following tasks: 

• Completion and provision of Employment Separation Certificates for terminated employees.
• Monthly completion and submission of child support deductions report.
• Provision of employee payment summaries.
• Provision of payment summary annual report to the ATO.
• Sending of employee TFN declarations to the ATO.

Benefits for employees are equally expansive and include:

• Ensure more accurate payments from their employers.
• Income-related debt will be lower for employees.
• Changes to income will be easier to decipher.
• Fewer reporting errors.
• More equitable debt capacity analysis.

Things that remain the same

While you’ll need to report additional information in your STP report, there are many things that will stay the same, such as:

• the way you lodge
• the due date
• the types of payments that are needed
• tax and super obligations
• end-of-year finalisation 

Key changes

Most of the additional information you need to report should already be captured in your current payroll software.

The key changes to the STP report include:

• Disaggregation of gross.
• Employment and taxation conditions.
• Income types.
• Country codes.
• Child support garnishees and child support deductions.
• Reporting previous Business Management Software IDs and Payroll IDs.

Conclusion

It’s important you are ready to start STP Phase 2 reporting once your digital service provider (DSP) has updated your product.

This information is also available as a PDF – see Employer STP Phase 2 checklist (PDF, 232KB)

Learn more about

• Things you can do now to prepare for STP Phase 2 reporting
• STP Phase 2 help and support resources

Contact us today to learn more about how we can help your business reach the highest level of growth through safe outsourcing.

If there’s a silver lining to COVID-19, it’s that it made Australian businesses recognise that you can still successfully – if not better operate your businesses without sacrificing its productivity and employee welfare.

The pandemic clearly accentuated the demand for outsourcing. The notion of looking globally to build a team and scale has become more accessible with the advent of technology.

Currently, migration is still recovering since the borders were re-opened thanks to the lengthy visa processes and high taxes, most businesses fear that the labour shortage will stifle the economy.

Since the golden goose was pretty much shot, the labour shortage will further drive-up inflation by triggering a wage surge thereby increasing the cost of goods and services.

National Australia Bank (NAB) being one of the big four lenders – established technology centres in India and Vietnam because they just couldn’t find local staff.

If this labour problem goes unresolved, the post-pandemic economic opportunity will be one that is wasted.

How outsourcing can fix the labour shortage in Australia

Enter VKonnect: we can be the solution for your business when it comes to overcoming the challenges of labour shortage. It’s a more cost effective and simpler way to handle additional/routine work in your company.

Here’s how we can fix it – and improve it:

Tap into the best talent pool

Usually, hiring local employees limits a firm’s capability to search for suitable talent for their roles. Outsourcing expands this by giving you access to a larger talent pool you can tap into even if they are miles away.

Get the right talent at the right price

We will take care of everything from hiring and managing a team to recruitment to certifications, on a subscription model basis.

Improved processes

Free up energy, time and resources and focus on your core business and leave the admin tasks to us. At VKonnect, we are very hands on with our clients’ outsourced processes to help replicate and scale them in the future.

Interested? Let’s talk! Leave us your details so that we can arrange a free consultation

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Running a restaurant is not easy, especially with the challenges the pandemic has thrown at the restaurant owners. They are already buried under a lot of operational challenges—generating enough revenue to keep the restaurant profitable, keeping up with health and sanitation requirements, adjusting to government-imposed business restrictions, responding to guest’s changing preferences, finding, training, and retaining staff, managing inventory, maintaining menu pricing and so on.

The restaurant owners are often forced to wear many hats, from CFO to HR officer. As if this workload is not enough, they are forced to look after their restaurant accounting as well. Even for the most seasoned, well-rounded restaurateurs, restaurant accounting is a daunting task.

It is time-consuming, time-sensitive, and requires accuracy – putting a lot of strain and pressure on you. It takes a lot of your time thus pulling you away from what you do best: Developing your business.

But the fact is that with the growing use of cloud technology and outsourcing becoming much more popular, accounting no longer needs to be your burden. The following are 4 advantages of outsourcing accounting services to a skilled provider.

1) Get the knowledge of experienced, tech-savvy bookkeepers

Accounting software keeps changing every day. Staying up to date on them while running your restaurant is hard. When you outsource your bookkeeping process to the experts, you will get access to the latest software and tools that are specially meant to streamline your accounting process.

Since accounting experts have a very good grip on the latest tools and systems, they can simplify the process by streamlining through automation. This is not possible if you do your accounting yourself. Moreover, since the outsourced partners work remotely, they use cloud technology to manage your books from any part of the world providing you a greater level of flexibility.

An outsourced bookkeeping team can recommend the best accounting software and tools for your business and can set it all up for you.

2) Control your restaurant’s financial performance

Outsourcing your bookkeeping to trained professionals means your restaurant’s financial data is in safe hands and is always accurate and up-to-date. This gives you an insight into the performance of your restaurant business and allows you to track all transactions such as expenses and income and as a result, you will know the status of your cash flow instantly.

An outsourced bookkeeper can create customised reports to suit your individual needs thus helping you to take better and timely decisions. They can provide you with all the information about your sales tax during the tax time, and pay the tax on time avoiding costly penalties.

3) Saves you precious money and time

Hiring an in-house bookkeeper is expensive when it comes to payroll taxes, benefits, and wages. You can get outsourced accounting professionals with a similar level of knowledge and experience without the payroll costs. You can also get rid of costs associated with hiring, training, and managing employees.

By outsourcing you can use the time it would take to do bookkeeping on your own, into running and growing your business, your area of expertise.

4) Avoid Frauds

Unfortunately, fraud is a major concern of all businesses, especially in cash-heavy restaurants. Opportunities for fraud are more in the restaurant business. A professional bookkeeper not only knows all the regulations but can uncover fraud risks and bring them to management’s attention. Thus an efficient bookkeeper can save your restaurant from any potential frauds that stunt the growth of your restaurant business.

Planning to outsource your accounting & bookkeeping process? VKonnect is a reputed business process outsourcing (BPO) company based in Melbourne that specialises in providing outsourcing services to Australian businesses in a wide range of industries. We are experts in outsourcing business activities in areas such as accounting IT, administration, and customer services/support. Get a free quotation for your accounting & bookkeeping needs today.

Get a quote →