Quickstart Australian BAS
- 1 Doing my BAS with GnuCash
- 2 My account set up
- 3 My Tax Tables
- 4 How do I record everyday transactions?
- 5 How do I record business transactions (includes GST tracking)
- 6 How do I record business transactions using business features i.e. accrual accounting?
- 7 How do I record complex business transactions?
- 8 Reporting the Business Activity Statement
Doing my BAS with GnuCash
Doing my quarterly [BAS] returns to the [ATO] is easy. Because I have set up my accounts and transactions correctly and accurately, the tallying up and submission of BAS takes me a few minutes only each quarter.
First, I have GnuCash set up to track my accounts. Consider the common situation whereby I have a bank account, a home loan, regular business income (collecting [GST]) and regular business expenses (paying GST). The BAS activity aims to tally up all the GST charges and payments over a quarter, calculating the difference, and submitting it to the ATO.
My account set up
My accounts are set up as follows:
- Asset:Bank (Asset)
- Asset:House (Asset)
- Liability:Home Loan (Liability)
- GST:GST on Sales (Liability)
- GST:GST on Purchases (Asset)
- GST:GST claims on BAS (Asset or Liability)
- A/Receivable (A/Receivable)
- A/Payable (A/Payable)
- Income:Sales (Income)
- Expense:Office (Expense)
- Expense:Service Fee (Expense)
- Expense:Groceries (Expense)
My Tax Tables
I use two tax tables -- GST on Sales, GST on Purchases.
Both tax tables have only 1 entry each -- GST on Sales (10%, linking to GST:GST on Sales), GST on Purchases (10%, linking to GST:GST on Purchases).
Some users may require more tax tables eg. Reduced GST on Sales, Reduced GST on Purchases, GST-free sales etc. These may link to the same GST accounts as above, or to different ones eg. GST:Reduced GST on Sales, GST:Reduced GST on Purchases, GST:GST-free sales. We'd expect the GST:GST-free sales account to include splits with $0 GST.
The tax tables are useful in generating invoices and calculating GST automatically.
How do I record everyday transactions?
First, I regularly update the bank account from my day-to-day transactions. For instance, spending $10 on groceries would involve a transaction as follows:
25/09/2020 Buying Groceries Asset:Bank -$10 Expense:Groceries +$10
Conversely receiving $200 on GST-free sales is recorded as follows
29/09/2020 Sales Asset:Bank +$200 Income:Sales -$200
Note the income amount is typically negative.
How do I record business transactions (includes GST tracking)
Business transactions typically involve GST being collected and paid and must be tracked as such.
Consider I purchased $200 insurance, plus $20 GST. This $20 GST is claimable. I want to track it.
01/10/2020 Annual insurance premium Asset:Bank -$220 Expense:Insurance +$200 GST:GST on Purchases +$20
Conversely, I have generated sales of $2000, and collected $200 GST. The GST must be remitted to the tax authorities.
02/10/2020 Cash Sales Asset:Bank +$2200 Income:Sales -$2000 GST:GST on Sales -$200
How do I record business transactions using business features i.e. accrual accounting?
Accrual accounting recognises that posting sales and getting paid may occur on separate transactions. Note the initial transfer to A/Receivable or A/Payable must be created using business features i.e. invoices or bills.
05/10/2020 Accrual Sales A/Receivable +$110 Income:Sales -$100 GST:GST on Sales -$10
Receiving funds later:
25/10/2020 Accrual Sales Receipt A/Receivable -$110 Asset:Bank +$100
Or the customer disputes the invoice, and the owner decides to write off the debt:
25/10/2020 Bad Debt A/Receivable -$110 Expense:Bad Debts +$100 GST:GST on Purchases +$10
Note the GST split exists in the invoice/bill posting transaction; the payment transaction does *not* include a GST split.
How do I record complex business transactions?
A complex business transaction may record additional splits, e.g. I invoice the client for $8000 + $800 GST, using a broker who charges 20%+GST. My income is $6240.
09/10/2020 Complex Sales Asset:Bank +$6240 Income:Sales -$8000 GST:GST on Sales -$800 Expense:Service Fee $1600 GST:GST on Purchases $160
Reporting the Business Activity Statement
Regularly, I will need to tally all GST collected and paid in the past period; e.g. the Q4 BAS will regard all GST activity from 01-October to 31-December. In the above example, I have collected $1,080 GST on sales, and paid $180 GST on purchases so far. The difference $830 must be remitted to the tax office.
Option 1 – Use Transaction Report
The versatile Transaction Report can be used to select the source accounts GST:GST on Sales and GST:GST on Purchases, limiting the dates from the start of last quarter to the end of last quarter, and reviewing the report which would specify:
|GST on Sales|
|Total for GST on Sales||$1,010|
|GST on Purchases|
|01/10/2020||Annual Insurance premium||$20|
|Total for GST on Purchases||$180|
The grand total $830 is to be sent to the tax authorities.
Option 2 – Use the Income and GST Statement
This report is designed to calculate amounts from GST. You can select the source accounts Income:Sales and Expense:Office, Expense:Service Fee etc, and the tax accounts GST:GST on Sales, GST on Purchases
|Date||Desc||Gross Sales||Net Sales||Tax on Sales||Gross Purchases||Net Purchases||Tax on Purchases|
This tabular view will sum all columns involved. The total tax collected is $1,010 and total tax paid is $180. Submission of gross sales $11,110 and the GST values to the ATO results in the difference $830 being payable.