A List of Important things for business start up
What accounting method do I use to report my GST?
If you have an aggregated turnover of less than $10 million, or use cash accounting for income tax, you can use one of two methods for accounting your GST.
1. Cash accounting
GST is reported on the activity statement for the period in which you either:
- receive payment for your sales
- make payment on your purchases.
It is an easy way of keeping track of your business cash flow and suited to smaller businesses that handle cash transactions for example, hairdressers.
2. Non-cash accounting (accruals)
GST is reported on the activity statement for the period in which you either:
- issue a tax invoice
- received any payment (for a sale)
- receive an invoice from your supplier (for a purchase).
This method is better suited to businesses that don’t get paid straight away and is:
- a way to track your true financial position – what is owed and what you owe
- helpful if you’re dealing with multiple contracts and large amounts of money.
Non-cash accounting (accruals) can be more complicated than cash accounting and you may need assistance from your registered tax or BAS agent.
For more information CALL SSK Accountants in Dandenong ☎️ 03 8759 0629.
Source: Visit ATO for more Information
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