Business Activity Statement In Xero

Karin Josefsson Blog, GST/BAS, Xero Blog 6 Comments

We are purely delivering conversions to and coaching for Xero. For details, please see www.jetconvert.com.au.

This is our way of how to step by step prepare your Business Activity Statement and make sure that everything is updated and correct!

A. Accounts Reconciled?

Are your bank accounts, credit cards and other accounts reconciled on the dashboard?

1. Click on the account that you want to check, by pressing on the blue button “Reconcile X Items”.

2. This next step will take you to the reconcile area, make sure that you don’t have any bank statement lines for the period that you are reporting unreconciled. If you do, please reconcile those items. Your goal is to have the reconciled area cleared for the period that you are reporting.

B. Review Account Transactions

Provided that you are in the reconciliation area already choose the fourth tab called account transactions. Or from the Dashboard, select Account Transactions by clicking on the “Manage Account” button.

In the Account Transactions tab

  1. Press the search button
  2. Select the date range and this should be the dates you are reporting (e.g. 1 July-30 September)
  3. Have a look on the transaction and make sure that they all are reconciled.

Green button=reconciled
Orange button=unreconciled please click on the unreconciled item, make sure that the data is correct and reconcile if it is on the bank statement that day.
Black tick= reconciled and something that has been added manually

When everything is reconciled you are finished with this step!

C. Reconcile Against Your Bank Statement

  1. Go to the reports tab and choose all reports
  2. Select the Bank Reconciliation Report
  3. Go to the second tab called “Bank Statement”
  4. Select the bank account that you want to reconcile
  5. Select date range, I recommend you to choose one month at a time and “tick reconciled only”
  6. Match the opening balance and the closing balance with your bank statement
  7. If this is matching please publish the report for that month

If the bank statement in Xero is not matching the bank statement, you will need to find the wrong transactions. It is best to tick each transaction on the actual bank statement against the transactions you have in Xero. Something might be missing or entered twice. Please delete.

D. Review Detailed Account Transaction Report

Check your transactions against each account code chosen and make sure that the GST type is correct (take special care with GST Exempt and No GST).

  1. Go to the reports tab
  2. Select the report Detailed Account Transactions
  3. Select the dates that you want to check, I recommend you to choose one month at a time if you have a lot of transactions coming through that reporting period
  4. Please sort by Account code
  5. Please tick the “cash basis” if you are reporting to the Australian Taxation Office on cash basis.
  6. Then on the right corner please click on the wide view to be able to see all the data.
  7. When checking this report make sure that the transactions are coded into the right account code and also swipe your eye on the GST rate chosen.
  8. If everything is coded as you want it and with the right GST rate please publish this report

If you need to make any account code or GST rate changes on a transaction:

  1. Right click on the transaction and open up in a new tab
  2. Click on the invoice option tab and choose edit
  3. From here you can change the account code or tax rate code
  4. When changes are made please update and close the tab
  5. Go back to the Detailed transaction tab and refresh the page and you will find that the transaction you made changed in is now updated

E. Review Your Aged Payable Invoices

  1. Go to the reports tab
  2. Select the Aged Payable report
  3. As date select the month that is the last on your reporting period
  4. Make sure that these aged payable bills are correct and still unpaid
  5. You can also view your expense claims

 

F. Review Your Aged Receivable Invoices

  1. Go to the reports tab
  2. Select the Aged Receivable report
  3. As date select the month that is the last on your reporting
  4. Make sure that these aged receivables are correct and still unpaid.

G. Review Your Activity Statement Audit Report

  1. Go to the reports tab
  2. Choose the Business Activity Statement report
  3. Please now go to the third tab GST Audit Report and choose the reporting period and press update
  4. Please press on the wide view in the right corner
  5. In this report we want to check that each and every transaction is coded against the right GST rate. You find the GST rate on the left side and in the picture you see GST on income, please make sure that all the transaction you have under that header should be coded against this code.

You will find the different GST rates you are using under that period on the left side, if you scroll further down you might also find GST on Expenses, GST on Capital, No GST on Purchases, GST Exempt and No GST.

Under the header GST Exempt and No GST you find wages and salaries and also superannuation and PAYG withholdings. This is correctly coded since these transactions should not be included as expenses on the BAS.

If you need to make any changes:

  1. Right click on the transaction that you want to amend and open up in a new tab
  2. Press on the invoice option tab and choose edit and update.

H. The Business Activity Statement

  1. Go to the second tab Business Activity Statement and choose the dates you are reporting
  2. Press update
  3. If you have payroll you will need to add the gross wages and the PAYG withholding (see section I)
  4. Depending on how you are reporting your PAYG instalment amount for your company you will also need to add that amount into this report.
  5. When the above is added you will be able to see if there will be refund or if you have to pay the ATO on this BAS period. When all amounts is in the report please publish the report!

I. Add Payroll Details

  1. Go to the reports tab
  2. Choose the Payroll Activity Statement Report
  3. Choose all, choose the period that you are reporting
  4. Open up in a pdf
  5. The earnings amount should be put into W1
  6. The tax amount into W2 on the Business Activity Statement

J. Lodge Your BAS

If you lodge your BAS online you may have a two week extension.

K. Create An Invoice To Update Your Xero Accounts

Create an invoice for the amount that you need to pay (A purchase if you need to pay and a credit purchase note if you expect a refund). When the refund or the payment comes through the bank feeds you will be able to simply match the created purchase bill against that transaction. This will save time for you since you don’t have to dig out the business activity statement report again and create it later. (Use the last day of the reporting period as invoice date)

  1. The first line GST on sales should be the amount shown on the Business Activity Statement report box 1A
  2. The second line GST on purchases should be the amount on the Business Activity Statement report box 1B
  3. The third line PAYG Withholding employees should be the amount that you have put through on the box W2
  4. The fourth line PAYG Instalment amount should be reflecting whichever option you have chosen

 

L. Lock Date

The last step for you to make sure that you wont be able to make any changes you will have to go to the settings tab, choose financial settings and under “Lock Dates” choose the date for the end of that reporting period and put it into “end of year lock date” please save!

Good work!

 

 

6 Responses to Business Activity Statement In Xero

  1. Julia

    Thanks guys! Very helpful with my first attempt to do my BAS statement using Xero!

  2. Karen Bussing

    Thanks so much for this! I love the idea of creating an accounts payable or receivable invoice for the BAS payment or refund. Is there a reason why the invoice isn’t dated the last day of the reporting period? Thanks again, this is a really helpful piece.

    • Alexander Kohl

      Hi Karen,
      that makes absolute sense to date your invoice the last day of the reporting period. But the more important date is the due date and depending how you lodge that can be quite different.
      Alexander

  3. ellen

    Thank you so much – this is an excellent outline and so helpful for first-timers!

  4. Cassandra Scott

    Hi Alexander

    I would recommend creating a Credit Note (if the BAS is a refund), rather than a sale. Just means all transactions to the ATO are kept on the same side of the ledger, and this makes it handy if you are needing to search for all transactions for a contact.

  5. Karin Josefsson

    Hi Cassandra,

    Thank your that feedback, this has now been updated. There is a new updated blog coming out shortly with a few more changes. Cheers Karin

Add a Comment