If you’re business is registered for GST, you are required to lodge your Business Activity Statement (BAS) either monthly, quarterly or annually. The most common lodgement period is quarterly.
Lauretta Finis, owner operator of Quick Bizness Bookkeeping Solutions, and a member of Australia’s Intuit Trainer/Writer Network, has put together some simple steps on how to lodge BAS using QuickBooks Online.
You can watch our BAS Webinar here.
If the business is registered for GST, you will first need to set this up:
On the left-hand navigation menu select the GST tab; this will take you to the GST Centre.
Click on Set up GST. This will start the set up process of GST in your business file.
Enter your business information in the window that pops up, such as ABN, GST method, GST lodging frequency. This information will be found on your paper form. If not, please contact your BAS or Tax Agent.
Once you have set up your GST, two new accounts will automatically be created in your Chart of Accounts:
The BAS Liabilities account is where the GST Collected and GST Paid amounts are posted when the transaction includes GST.
The BAS Suspense account is like a clearing account; once you lodge your BAS in QuickBooks Online, the amount payable or refundable will be posted to this account.
These two accounts can be renamed if you prefer. From your Chart of Accounts, click on Edit and change the name.
Select the GST tab from the left-hand navigation bar.
Assuming you have done your normal bookkeeping tasks, bank account reconciliations, GST reconciliation and completed your BAS Checklist for compliance issues. click on Run Reports, check your Exemption Detail, Detailed Report and BAS Summary Report from the drop-down menu.
Ensure the dates are correct for the reporting period, either monthly, quarterly half-yearly or yearly.
Select Complete BAS and ensure if any exemption amounts are shown in the column, these amounts will be adjusted to the GST on Sales field and GST on Purchases field in this report. These amounts in this report are to be reflected in your BAS Lodgement to the ATO.
**Please note that only transactions that have changed from the previous reporting period once the Complete BAS button has been selected will show in these columns.
Check that the PAYG and Wages amounts have come across to W1 and W2 correctly (see step 9, PAYG and IAS).
When the whole process has been checked and reconciled, you then need to lodge your BAS as you normally would, via a paper statement, your Business or BAS Portal. Also, QuickBooks Online integrates with GovReports so the lodgement can be processed through the GovReports website.
It depends entirely on your process as to whether you hit ‘Mark as Lodged’ before or after you physically lodge with the ATO. Either way, you need to hit the Mark as Lodged button, at the bottom of the window.
When this process has been completed, QuickBooks Online saves a snapshot of your lodgement and generates a journal to reduce the BAS Liabilities account by what is being paid, and moves this total amount to the BAS Suspense account.
Let’s look at marking as lodged and what happens.
Clicking on the Mark as Lodged button will bring up a window to confirm you will be closing the books for the GST period and any transactions changed from this period and previous periods will be shown in the GST exemption report next quarter or cycle of BAS reporting.
Once you click on Continue, this creates a two-line journal entry that moves what you owe (or what you are owed) from the BAS Liability account to the BAS Suspense account (more information on journals at step 5):
Your BAS has now been closed and is ready for the next cycle of BAS Lodgement.
Check the View history tab to view your BAS Lodgement.
This will give you history of any previous BAS lodged and any payments made if processed through this screen. It will also have the three reports generated for that period when you Mark as Lodged – the BAS Summary, Detail and Exception Detail.
QuickBooks Online will create the journal entry debiting (or crediting if you have a refund) to the BAS Liability account and posting to the BAS Suspense account. If payroll is processed through the payroll centre, the journal will also capture the debit to PAYG Withholdings Payable and credit to the BAS Suspense account.
The Journal Entry will be created as at the date you clicked on Mark as Lodged.
The journal date can be edited if you want to reflect the journal date as at the last day of the quarter or period you are reporting on, so that your General Ledger accounts are as you prefer to see them for reconciliation purposes.
** Please note that you cannot add any description or add new account items to this journal. A work around is to reverse this journal and redo this at the date, description and additional account details as required.
To reverse the journal:
When making a payment or receiving a refund for a BAS you have lodged, you have two options.
Option 1: Record the payment from the GST Centre by clicking View History and then select Record under the Payments column. DO NOT USE THE Record Payment button in the GST Centre. This is meant for upcoming filings and will create a discrepancy on your next return if used incorrectly. You’ll know you’re in the wrong payment window if the tax period says Upcoming Filing.
Make sure you enter the correct date of payment and choose the bank account of payment. I recommend entering a memo as well, for example: “QTR 3 BAS 2016.”
Option 2: When reversing out the system-generated journal, the amount that would go to the BAS Suspense account, post this to an ‘ATO RBA Clearing account’. This can be called many things to many Advisors, but as a general rule this account is what is owing at the ATO Integrated Client Account Running Balance.
Recording your journal to the ATO RBA Clearing account allows the reconciliation at quarter end to both the Balance Sheet account and ATO account. In some instances, you may have clients that have a payment plan and this works well so strict control in this account takes place.
Once the new journal has been entered and the amount has been posted to the ATO RBA Clearing account, all that is required is a Transfer and entering in the Memo of ‘Payment QTR 3 BAS 2016’.
**Tip: Under Attachments you can add the scanned paperwork or PDF document of your BAS for this period.
Do not post journals directly to the BAS Liability account. You are allowed to, but I would recommend not to. Although it will post to the Balance Sheet account, it won’t show up when you complete your BAS through the GST Centre.
You can, however, assign the GST code on the line item when processing through the journal entry and this will work correctly for your BAS Reporting and Lodgement.
There are two options when it comes to reporting monthly IAS and Quarterly BAS in QuickBooks Online.
If using Employment Hero in QuickBooks Online, you will need to edit the journal entry that QuickBooks Online creates by deleting the tax codes. These tax codes are automatically created when payroll is turned on and it is these tax codes that populate the amounts on the BAS Worksheet in the GST Centre (Complete BAS tab). So by choosing the journals for the two months that have already been processed for IAS, and changing the BAS-W1 and BAS – W2 (Purchases) under GST codes to Out of Scope (Purchases), this will remove these two months’ amounts from the BAS Report.
You will need to do this for the first two months of the quarter ONLY and then leave the journals for the third month, as you want this to appear on the Quarterly BAS Worksheet.
For the payments for the first two quarters, you can create an Expense for payment and take it directly out of the account PAYG payable on the date of payment.
Or, if the end of month dates are important to reconciling the PAYG Withholding account, journal the PAYG amount to your BAS Suspense account or ATO RBA Clearing account so you have a running balance of the GST and PAYG which will match your integrated client account.
If you are not using QuickBooks Online payroll, or you may be using a dedicated payroll company, then you would process your wages and PAYG as normal via a journal entry to bring the amounts into the financials.
If IAS is required on the last month of the BAS cycle, when processing the journal to your Wages and PAYG add W1 and W2 so this will be reflected on your BAS Worksheet. This will add it to your BAS for the quarter cycle for the month.
If only reporting PAYG Quarterly, you will need to add the W1 and W2 to all the journals for the quarter so that the quarter totals are reflected in the BAS Report.
**Tip: Set up a recurring template in Recurring transactions so this journal is already set up to remind you of the GST codes.
The amounts of PAYG will be picked up via the journal when processing the BAS as mentioned by clicking Mark as Lodged. This will generate the system journal and then you decide which procedure you would like to follow.
Lodgement of your BAS for your business can be complex. We highly recommend that if you don’t understand any of the components, engage the services of a BAS or Tax Agent to assist you.
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