The shift from quarterly to monthly thinking is where many businesses struggle. You might lodge quarterly, but your cash flow needs daily management.
Treating your quarterly GST liability as a monthly obligation helps smooth out the lump-sum nature of quarterly payments. If your quarterly GST is typically $30,000, consider setting aside $10,000 per month. This creates a more predictable cash flow pattern and prevents the shock of a large quarterly payment hitting your account.
Building in monthly GST provisions based on your sales pattern helps avoid the end-of-quarter crunch when you suddenly need to find the cash to pay several months of accumulated liability.
Monthly Lodgement: When It Makes Sense
Some businesses lodge monthly instead of quarterly. This is mandatory if your GST turnover exceeds $20 million, but businesses below that threshold can choose monthly reporting if it suits their operations.
Monthly BAS is due on the 21st of the following month. July’s BAS is due 21st August, August’s BAS is due 21st September, and so on.
The advantage of monthly reporting is smaller, more manageable payments. Instead of accumulating three months of GST liability and paying it in one lump sum, you’re paying monthly. This improves cash flow management by spreading the load and makes it easier to spot issues early.
The disadvantage is increased administrative work. You’re preparing and lodging a BAS 12 times per year instead of four. For smaller businesses without dedicated bookkeeping resources, this can be burdensome.
The Agent Advantage
Using a registered BAS agent provides extended lodgement dates through the ATO’s BAS Agent Lodgement Program. For quarterly lodgements, agents typically get an extra four weeks. Quarter 1 extends from 28 October to late November. Quarter 3 extends from 28 April to late May. Quarter 4 extends from 28 July to late August.
Quarter 2 doesn’t get an agent extension because the due date already includes the extra month to 28 February.
The extension also affects when payment is due. You don’t just get extra time to lodge; you get extra time to pay. This shifts your cash flow timing and can provide breathing room if other obligations are pressing.
Penalties For Getting It Wrong
Late lodgement attracts failure to lodge penalties starting at one penalty unit per period, currently $313. The penalty increases for repeated failures and larger businesses. Late payment attracts general interest charges on the unpaid amount, calculated daily from the due date until paid.
Poor lodgement history triggers increased ATO scrutiny. Your lodgement behaviour is tracked, and consistent lateness puts you on the radar for audits and reviews. You may also lose access to agent extensions if your compliance record deteriorates.
Practical Steps
Know Your Lodgement Cycle Confirm whether you’re monthly, quarterly, or annual. Check your ATO Business Portal or ask your accountant.
Mark The Dates Put all lodgement dates in your calendar now for the entire financial year. Set reminders two weeks before each due date. For Quarter 2, note both the quarter end on 31 December and the extended lodgement date of 28 February.
Reconcile Regularly Don’t wait until lodgement is due to reconcile your books. Monthly reconciliation, regardless of lodgement frequency, identifies issues early and makes BAS preparation straightforward rather than stressful.
Provision For GST Monthly Even if lodging quarterly, mentally provision for GST every month. Transfer your estimated monthly GST liability to a separate account or track it in your cash flow forecast. This prevents the shock of a large quarterly payment.
Understand The February-April Squeeze Plan for the tighter cash flow period when Quarter 2 GST is due in February followed by Quarter 3 GST in April. Ensure you have adequate working capital or arrange temporary facilities to smooth this period.
Use Your Agent If using a BAS agent, understand when they need information to meet lodgement deadlines. The earlier you provide records, the more time they have to identify issues and maximise legitimate deductions.
The Bigger Picture
BAS lodgement isn’t just a compliance task. It’s a tool for understanding your business performance. Regular BAS preparation forces you to review revenue, expenses, and cash flow patterns.
If your current BAS process feels chaotic or you’re concerned about the February-April cash flow squeeze, the Advivo team can help you develop systems that make lodgement straightforward and align your tax obligations with your business realities.
