Running a business comes with many responsibilities, and lodging your Business Activity Statement (BAS) is an important part of staying compliant with the ATO. While BAS reporting can seem straightforward, small oversights in GST coding, recordkeeping, or reconciliations can sometimes lead to adjustments later on. The good news is that most of these issues are usually easy to avoid with the right habits and processes in place. Here are some common BAS pitfalls we see and a few simple ways to help keep your BAS accurate and on track.

Keep Personal and Business Expenses Separate

One of the easiest ways to prevent BAS errors is to keep personal and business transactions clearly separated. Problems often occur when personal purchases are accidentally recorded as business expenses.

This can happen when a personal item is paid using a business card or when transactions are not reviewed regularly.

Keeping a dedicated business bank account and checking your transaction coding regularly can help ensure only genuine business expenses are included in your BAS.

Understand Which Expenses Include GST

A common misconception is that GST can be claimed on every business expense. In reality, some payments do not include GST, which means a GST credit cannot be claimed. The ATO provides guidance on when businesses can claim GST credits on their purchases.

Examples where GST generally cannot be claimed include:

• Bank fees
• Interest charges
• Wages and salaries
• Some overseas purchases

Business and motor vehicle insurance, as well as motor vehicle registrations, often include stamp duty, which is GST free. This means the GST amount on the invoice may be lower than the total amount paid.

To ensure the correct GST is claimed, your accountant or bookkeeper should have access to the full insurance and registration invoices so the GST component can be recorded accurately.

For more guidance, please visit ATO: Claiming GST credits.

Reconcile Your Accounts Before Lodging BAS

Before lodging your BAS, it is important to ensure your accounts are properly reconciled. Reconciliation helps confirm that the transactions recorded in your accounting software match your bank statements.

Without this step, you may have:

• Missing transactions
• Duplicate entries
• Incorrect GST coding

Taking the time to reconcile accounts before lodging BAS can help improve accuracy and reduce the need for later corrections.

Review Any GST Adjustments

Maintain Good Record Keeping

Accurate record keeping is essential for supporting your GST claims. In most cases, GST credits require a valid tax invoice.

Keeping organised digital records makes it easier to locate documents if needed and ensures your BAS information is supported by proper documentation. If you are unsure whether you still need to keep paper copies, we covered this in our earlier article Should You Still Keep Hard Copies of Your Receipts?

Digital tools such as Hubdoc and accounting software like Xero can also make it easier to store and retrieve invoices when preparing your BAS.

Preparing and lodging BAS does not have to be complicated. With good recordkeeping, regular transaction reviews, and proper reconciliations, most BAS errors can be easily avoided. Developing these habits can help keep your reporting accurate and reduce the risk of adjustments later. If you would like assistance reviewing your BAS or improving your bookkeeping processes, the team at MKG Partners is always here to help.