The main and most important difference between accrual and cash basis accounting lies in the timing of when revenue and expenses are recognised. The cash method of accounting is very simple and is widely used by small businesses and for personal finances. The cash method considers revenue when money is actually received and expenses only when money is actually paid out.
In contrast, the accrual method of accounting is more complicated and recognises revenue when a sale is made and an invoice is raised, and for expenses when goods &/or services are ordered, rather when the money is actually received or paid out.
If you’re a business registered for GST, you need to lodge a Business Activity Statement (BAS). Your BAS will help you calculate and report your GST payable or GST refund. It also reports:
- Pay as you go (PAYG) instalments
- PAYG withholding tax
- Other taxes
Your specific business circumstances will determine whether your BAS is due Monthly, Quarterly, or Annually (Quarterly is the most common). And similarly, the due date changes depending on whether you prepare and lodge the BAS yourself, or if you engage AustAsia Accounting Services as your tax agent. With us acting as your tax agent, you enjoy a deferred lodgement and payment deadline. This can greatly help with cashflow planning in your business. Furthermore, with AusAsia acting for you, we are able to negotiate payment extensions or special payment arrangements, in certain circumstances. The table below summarises the lodgement and payment dates for quarterly lodgements.
|Due date if you prepare and lodge the BAS yourself||Due date if we lodge on your behalf as your tax agent|
|September Quarter||28 October||25 November|
|December Quarter||28 February*||28 February*|
|March Quarter||28 April||26 May|
|June Quarter||28 July||25 August|
* The ATO grants businesses an automatic one month extension for the December Quarter lodgement due to the Christmas and New Year holiday period however, tax agents don’t get an additional month.
Taxpayers who are not registered for GST are required to report their tax obligations on an Instalment Activity Statement (IAS) rather than a Business Activity Statement (BAS). Generally, IAS is calculated to report all obligations and entitlements relating to FBT instalments, PAYG withholdings and instalments, and deferred company and fund instalments. Employers who use an IAS will generally lodge their IAS quarterly, except for employers with annual withholding obligations of more than $25,000 – they are required to report and pay monthly.
The IAS is mainly for individual taxpayers (including trustees) with investment income to report their obligations to the ATO. Investment income includes rental, dividend and interest income. The form can be used to report obligations for:
- PAYG instalments
- PAYG amounts withheld from payments
- FBT instalments
- Deferred company instalments
Some taxpayers are still required to complete both a BAS and an IAS where, for example, a family business is run through a trust.
An employee works in your business and is part of your business. A contractor works for your business, as well as earning income from other sources, and operates independently of your business.
Your tax, superannuation, insurance and other obligations will vary depending on whether your worker is an employee or a contractor to your business.
This is a complex issue that requires a detailed explanation. For more information on the differences between employees and contractors, please click on these links to our AustAsia Fact Sheet and the ATO website.
- Xero/MYOB set-up and training – we ensure that your system software is set-up correctly so you can confidently manage your own bookkeeping processes.
- Periodic “spring clean” – we can review your bookkeeping works periodically to ensure that everything has been input and reported correctly. We can do this as a regularly scheduled service, or on an ad-hoc basis, whenever you require our assistance.
- Migrating from one accounting software package to another – as your business changes and grows, the accounting software needed for your record keeping purposes might change and we can assist you in the migration and the transitioning of files across different accounting packages.
- Setting-up cloud storage for receipts to be synchronised with your accounting software – we assist clients in selecting and/or configuring complementary apps that integrate with their accounting software such as Receipt Bank, Hubdoc, Dropbox, simPRO, and Servicem8. These apps allow paperless storage and enable more efficient work practices.