Common BAS Mistakes Small Businesses Make

BAS preparation is one of those tasks that seems straightforward — until something goes wrong. The ATO regularly reviews BAS lodgements, and errors are common, particularly for businesses managing their own bookkeeping.

This article covers the most common BAS mistakes small businesses make and how to avoid them. For professional support, Business Activity Statement services in Burleigh Heads can help ensure your BAS is accurate and lodged on time.

Incorrect GST Treatment

The most common BAS mistake is incorrect GST treatment — either not charging GST on sales that should include it, or claiming GST credits on purchases that didn't include GST. This usually happens because transactions are miscategorised in the accounting records.

Common examples include:

• Recording a GST-free sale (like basic food or exports) as taxable
• Claiming GST on a purchase from a supplier who isn't registered for GST
• Recording an input-taxed sale (like residential rent) as GST-free
• Forgetting that some purchases (like bank fees and insurance stamp duty) don't include GST

Getting the GST treatment right requires understanding which sales and purchases are taxable, GST-free, and input-taxed — and recording each correctly.

Missing Transactions

Transactions that aren't recorded in the accounting system don't appear on the BAS. This can happen when:

• Bank feeds miss transactions (rare but possible)
• Cash transactions aren't recorded
• Transactions from secondary accounts aren't captured
• Transactions occur near the end of the quarter and aren't entered before the BAS is prepared

Missing transactions mean the BAS understates either GST collected or GST credits (or both). Regular reconciliation helps catch this — if the accounting records match the bank statements, missing transactions are easier to identify.

Poor Record Keeping

BAS preparation relies on accurate records. If records are incomplete, disorganised, or months behind, the BAS figures will be unreliable. Common issues include:

• Receipts and invoices not retained or filed
• Accounts not reconciled
• Transactions not categorised
• No clear separation between quarters

For more on this, see our article on signs your business needs professional bookkeeping.

Incorrect Sales Figures

The total sales figure on the BAS needs to match the actual sales recorded in the accounting system. Errors can occur when:

• Sales are recorded in the wrong period (near quarter-end)
• Sales are recorded net when they should be gross (or vice versa)
• Refunds or credits aren't recorded correctly
• Non-sales income (like loans or owner contributions) is incorrectly recorded as sales

Incorrect Expense Treatment

On the expense side, common errors include:

• Claiming GST credits on expenses that didn't include GST
• Recording private expenses as business expenses
• Not apportioning expenses that are partly business and partly private
• Recording capital purchases (equipment, vehicles) as operating expenses

Missing Deadlines

BAS lodgement deadlines are fixed — typically 28 days after the end of each quarter. Missing them can result in penalties. The ATO applies failure-to-lodge penalties, calculated per 28-day period the BAS is overdue.

Common reasons for missing deadlines include:

• Records not ready in time
• Waiting for bank statements to arrive
• Simply forgetting the deadline
• Leaving preparation to the last minute and discovering records are incomplete

The solution is to stay on top of records throughout the quarter, so BAS preparation is a review process rather than a scramble.

Not Reconciling Accounts

Reconciliation — matching accounting records to bank statements — is the check that ensures accuracy. If accounts aren't reconciled before the BAS is prepared, errors and missing transactions won't be caught.

All bank accounts, credit cards, and loan accounts should be reconciled up to the end of the quarter before the BAS is prepared. This is the single most effective way to catch errors.

Mixing Personal and Business Expenses

Using the same bank account or credit card for business and personal expenses creates significant BAS risk:

• Personal expenses may be incorrectly claimed as GST credits
• Business expenses paid personally may be missed
• The accounting records don't accurately reflect the business's activity
• Reconciliation is far more difficult and time-consuming

The solution is simple: separate business and personal banking. A dedicated business bank account and credit card make record-keeping straightforward and significantly reduce the risk of BAS errors.

How to Avoid These Mistakes

Most BAS mistakes come down to two things: inaccurate records and lack of review. The practical steps to avoid them are:

• Keep records up to date throughout the quarter
• Reconcile all accounts before preparing the BAS
• Separate business and personal banking
• Use cloud accounting software with bank feeds
• Review the BAS figures before lodgement
• Engage a registered BAS agent or accountant to prepare and lodge

For Burleigh Heads businesses, accounting services in Burleigh Heads can handle BAS preparation and lodgement, ensuring accuracy and compliance — and freeing you to focus on running the business.

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