Want to know how to avoid struggling to find cash come BAS time? We’ve got the trick. And no sorry it's not a pot of gold at the end of a rainbow or the numbers to next weeks lottery. Instead it's an easy, simple way to avoid those cash flow issues come BAS time.
Now this system comes down to one key thing: discipline.
Yep, discipline is key and you will thank us in the long run if you adopt this simple and effective approach.
Here's our three step process:
- Setup a bank account that is not easily assessable (eg. Online based account with no card)
- At the end of each day or week (depending on the frequency of when you're paid), transfer the GST component of your sales to your new bank account.
If you have employees, each pay run transfer the total PAYGW (employee withholding tax) from that pay to your new bank account
- Come BAS time, utilise the money in your new bank account to pay the BAS and leave any excess in there to cover future BAS’ and/or tax obligations
If you have PAYGI (income tax instalment) obligations, depending on how this is calculated for you on your BAS, follow a similar process to step 2 to transfer additional funds to your new bank account to cover it.
For those with superannuation obligations, you can do the same as PAYGW for superannuation.
With the September quarter BAS lodged for most, avoid cash flow issues and get proactive for the next quarter. Try our easy and effective approach. Your business will thank you for it!