If you are a small business owner then staying on top of your GST obligations is critically important. At Get Capital we often see small businesses having issues because they use the GST component of customer receipts to fund their business. When it then comes time to meet their quarterly ATO BAS payments they can find that they dont have the available funds and may have to seek out a small business loan in order to raise the cash to pay the ATO.
One approach to ensure you have enough cash each quarter to meet your ATO payments is to deposit GST payments that you receive from your customers into a dedicated account that is only for GST.
This cash is then used to pay your small business’ GST obligations as they come due each quarter.
If you find that there is a positive balance in this account after you have made the GST payments then you can always look to transfer this balance to your main business banking account. Going forward you can then look to reduce the the amount you deposit into your GST specific account.