BAS Reconciliation Before You Lodge

BAS reconciliation ties the proposed activity statement to GST accounts and payroll records, with every difference explained. Use the free Excel workpaper below to separate timing from errors, check the final figures and retain your client’s approval before you lodge.

Gather the Balances Before You Start

Confirm the entity, reporting period and GST accounting basis before comparing figures. A cash-basis BAS and invoice-basis accounts can both be correct while showing different GST amounts.

Save the preceding signed reconciliation, lodged BAS figures and ATO account transactions. Export the GST transaction report, control-account detail and trial balance for the same period. Record report filters and export times so the reviewer can reproduce the totals.

Obtain opening and closing unpaid-invoice reports when the accounts recognise invoices before payment. For payroll, use payment-based period totals, STP employer-level reports and the withholding-account detail. Match settlements to bank statements and ATO allocations.

Request an absent invoice, missing bank statement or incomplete payroll report before treating its difference as an adjustment. Record the question and its owner in the workpaper. The BAS preparation checklist covers the wider recurring records request.

Reconcile the GST Control Accounts

Bridge the opening GST balance to the closing accounts first, then explain how that balance relates to the proposed BAS. Use positive amounts for GST payable and negative amounts for GST receivable in the balance bridge.

1. Agree the opening GST balance to the previous workpaper. Separate outstanding lodged GST from GST on invoices awaiting cash-basis recognition.
2. Add GST on sales posted during the period and subtract eligible GST on purchases. Reconcile separate sales and purchase control accounts individually before combining them.
3. Add supported increases and subtract supported decreases from adjustments or corrections. Reference the transaction and its treatment. Include an amount once, even when it appears in several reports.
4. Subtract GST payments and add GST refunds posted during the period. Split combined BAS settlements between GST, withholding and other obligations using the lodged statement and allocation records.
5. Compare the calculated closing balance with the trial balance. Explain the reporting-basis difference, remaining earlier liabilities and label rounding before comparing with the current BAS.

If your software transfers GST to an ATO clearing account when a BAS is finalised, show that transfer separately. Reconcile both accounts without also counting the bank payment as a second GST reduction.

Fictional Cash-Basis Workpaper

This fictional entity reports GST on a cash basis but records invoices in its accounts. All purchase GST shown is eligible and supported by tax invoices. The example excludes special attribution rules and assumes no GST instalment method.

The opening GST balance is $2,400. It contains $2,000 already lodged and $400 of net GST on unpaid invoices. During the period, the entity pays the $2,000 GST component of its earlier BAS once.

Account movement	Signed amount	Evidence reference
Opening GST payable	$2,400.00	Prior workpaper and lodged BAS
GST on sales invoiced	+$6,800.75	Sales GST transaction report
GST on eligible purchases invoiced	-$2,200.40	Purchase GST report and invoices
Decreasing adjustment	-$100.00	Adjustment note and refund evidence
Earlier BAS GST payment	-$2,000.00	Bank payment and ATO allocation
Closing GST payable	$4,900.35	Trial balance

The decreasing adjustment is a refunded price reduction on a previously paid taxable sale. The example assumes the adjustment-note and attribution requirements are satisfied. The invoice totals above exclude this adjustment.

Under the ATO’s cash-basis guidance, GST follows receipts and payments. A partly paid invoice contributes only the GST attributable to the paid portion.

Unpaid sales contain $600 GST at opening and $900 at closing. The corresponding unpaid-purchase GST amounts are $200 and $300. These are GST components, not invoice face values.

Cash-basis calculation	Amount before label rounding
GST on sales: $6,800.75 + $600 - $900	$6,500.75
Purchase GST: $2,200.40 + $200 - $300	$2,100.40
Purchase GST plus decreasing adjustment	$2,200.40
Net current GST: $6,500.75 - $2,200.40	$4,300.35

Report whole-dollar labels of $6,500 at 1A and $2,200 at 1B, giving net GST of $4,300. The ATO’s BAS completion instructions require rounding down to whole dollars.

The closing unpaid net GST is $600: $900 on sales less $300 on purchases. Subtract that $600 and the net $0.35 label-rounding difference from the $4,900.35 account balance. The result is $4,300, matching the proposed BAS with zero unexplained difference.

Keep the $0.35 as an explained rounding item. It does not justify changing an invoice’s tax coding. The earlier $2,000 payment clears the earlier liability and does not reduce this period’s 1A again.

The Same Records on a Non-Cash Basis

For ordinary transactions, non-cash GST recognition follows the earlier invoice or payment event. A purchase credit also requires the applicable tax-invoice evidence.

Assume this comparison entity used non-cash reporting throughout. Its opening $2,400 was already recognised, so the $2,000 settlement leaves $400 from the earlier period. This comparison is not a change-of-accounting-method procedure.

Current unrounded GST is $6,800.75 - $2,200.40 - $100 = $4,500.35. Labels 1A and 1B become $6,800 and $2,300, giving $4,500. The closing $4,900.35 comprises that current amount, $400 still owed from the earlier period and $0.35 rounding.

Do not remove the closing unpaid invoices again. Their GST has already been recognised on this basis. The workbook retains the cash and non-cash explanations on separate example sheets.

Match Payroll to the BAS

Reconcile W1 and W2 to payments in the withholding period, then explain any difference from payroll expenses and STP reports. The GST accounting basis does not decide when employee withholding is reported.

W1 records gross salary, wages and other relevant payments. W2 records amounts withheld from payments included at W1. ATO STP reporting requirements distinguish employer-level period amounts from employee year-to-date totals.

Use completed pay runs and accepted STP events for the relevant pay dates. Investigate reversals, replacement reports and corrections before summing events, so the same pay run is counted once. Check the BAS prefill against the reconciled payroll records.

In the fictional example, wages expense is $32,000, including $2,000 accrued but unpaid. Gross payments of $30,000 support W1. The payroll report and corresponding STP employer totals both show $4,800 withheld for W2.

Opening withholding payable of $1,500 plus $4,800 withheld, less the $1,500 earlier settlement, leaves $4,800 payable. The workbook compares this balance independently with the account detail. Keep the unpaid wage accrual outside the payment-based W1 total.

Check W3 and W4 separately where relevant. The ATO’s withholding labels put their totals with W2 at W5. W1 itself is not added to the withholding payable.

PAYG instalments prepay the entity’s income tax. Keep them separate from tax withheld for employees. The example’s $900 instalment belongs at 5A, not W2 or the withholding account.

For this example, no other BAS obligations or credits apply. Net GST of $4,300 plus $4,800 withholding and the $900 instalment gives a proposed payment of $10,000. That payment total is not the closing GST balance.

Explain Differences Before Changing Figures

Trace each difference to a transaction, reporting rule or allocation before posting a correction. Use the evidence to decide whether the accounts, proposed statement or earlier lodged statement needs attention.

Difference	Records to inspect	Supported response
Unexpected GST debit	Opening workpaper, purchase credits, BAS settlements and clearing-account entries	Establish whether it is a genuine receivable, payment in advance or misposting before reclassifying it.
Duplicate earlier BAS payment entry	Bank statement, both account entries and ATO allocations	If one real payment has two entries, correct the duplicate. If two payments actually occurred, retain both and reconcile the credit or allocation.
Missing GST credit	Tax invoice, payment record, GST report and prior claims	Establish entitlement and recognition period. Record an eligible omitted claim using the applicable treatment, without claiming it twice.
Prior-period journal	Journal approval, original transaction, earlier BAS and subsequent corrections	Identify whether it changes a lodged amount. Document the permitted BAS treatment separately from the accounting entry.
Closing cash-basis GST exceeds current BAS	Unpaid-invoice GST components and earlier unpaid liabilities	Retain the supported timing bridge. Correct only an actual error found in those records.

In the cash example, a duplicate $2,000 payment entry would reduce closing GST to $2,900.35. The bank statement shows one payment. Correcting the duplicate restores $4,900.35 without changing current-period sales GST.

A GST error means the reported amount was wrong when lodged. An adjustment follows a later event that changes a correctly reported sale or purchase. A later price reduction and a duplicate original purchase claim require different treatment.

Follow the ATO’s BAS correction and adjustment guidance before changing a lodged period. Later-BAS error corrections have conditions, including applicable time and value limits. Where those conditions are not met, revise the original statement.

A prior-period journal is not automatic permission to change the current BAS. Retain the affected period, correction calculation and treatment decision. An unsupported balancing journal hides the difference instead of explaining it.

Finish the BAS Reconciliation Workpaper

Download the free BAS reconciliation worksheet for Excel. It needs no payment or account. The workbook includes a blank template, cash and non-cash examples, payroll comparisons and evidence fields.

Enter the entity and period, then record each report’s balance and reference. Add supported reconciling amounts with an explanation beside each item. The template compares the proposed BAS labels with calculated figures and shows the remaining difference.

Use separate GST payment and refund inputs, and record only the GST component in those rows. Enter report balances independently of the formulas. A copied formula result in the report-balance field cannot test whether the records agree.

For the cash example, confirm closing GST of $4,900.35, labels 1A of $6,500 and 1B of $2,200, and W2 of $4,800. The proposed payment is $10,000. Both examples finish with zero unexplained differences after their different recognition treatments.

Keep references to the invoices and allocation records with the workbook. Use the separate loan reconciliation workpaper for loan movements instead of adding those movements to GST.

Record the preparer and reviewer, their sign-off dates and the client’s approval reference. Keep unresolved questions visible with an owner. Resolve questions affecting the proposed statement before requesting final approval, then retain approval of the exact figures you lodge.