Don’t let your BAS bill ruin your month.
There are few things in small business more stressful than lodging your BAS or tax return… and realising the money to pay it simply isn’t there.
And look, this advice is not revolutionary. Most accountants will tell you to “put money aside for tax”. The trick is actually doing it consistently and resisting the temptation to raid the account when business (or life) gets expensive.
Because when the money is sitting in your everyday account looking all available and spendable? Dangerous.
The TALLY Solution:
Open a separate “GST + Tax” bank account
The minute income hits your business account, immediately transfer part of it into a separate account dedicated purely to:
GST collected
Income tax
PAYG instalments (if applicable)
Not weekly.
Not “when you remember”.
Not “at the end of the month”.
Immediately.
The less time the money sits in your main account, the less likely you are to accidentally spend the tax office’s money on inventory, coffee, payroll, or a completely justified emotional support purchase.
“But it’s MY money?”
Respectfully… part of it isn’t.
If you’re registered for GST, a portion of the money you receive belongs to the ATO. You’re effectively collecting GST on their behalf. So while it lands in your account, it was never really available cashflow.
And if you’re profitable? You’ll likely also need to pay income tax.
Many sole traders who have been in business for a while are also on the PAYG Instalment system. That means the ATO asks you to prepay instalments of income tax throughout the year via your BAS.
Translation?
Your BAS may include:
GST payable
PAYG instalments
Other obligations
Which is why those quarterly bills can feel… aggressive.
How much should you put aside?
A good starting point:
Put aside the GST component of your income
Then calculate additional amounts for income tax/PAYG using your instalment rate
Your accountant can help you estimate this properly, but even a rough system is infinitely better than no system at all.
Make the money harder to access
If your self-control is questionable (same), make the account intentionally inconvenient.
Some ideas:
Use a completely different bank
Don’t link the account to your everyday banking app
Choose an account with no fees and decent interest
Automate transfers immediately upon payment receipt
Go full lock-down mode and let a trusted person hold the password
Extreme? Maybe.
Effective? Also yes.
Another option: pay the ATO early
Fun fact: the tax office is more than happy to take your money before it’s due.
You can make voluntary payments directly to the ATO throughout the quarter. Then when you lodge your BAS, some or all of the money is already sitting there waiting.
Bonus: you definitely can’t accidentally spend it.
Why this matters beyond tax
Creating a separate GST + tax account doesn’t just reduce stress at BAS time.
It also gives you a much clearer understanding of your actual business cashflow in real time.
Because if you remove the money that was never really yours to spend, you get a far more accurate picture of:
what your business is genuinely earning
what you can safely spend
what you can afford to pay yourself
whether your pricing is actually working
No nasty surprises.
No panic at lodgement time.
No pretending Future You will somehow magically deal with it later.
Future You deserves better.
Financial Advice Disclaimer
The information provided in this article is general information only and does not constitute personal financial advice.
Tally Finance is not a licensed financial services provider, and the content is not tailored to your personal financial situation, goals or needs.
Before making any financial or investment decisions, you should seek advice from a qualified and licensed financial adviser.
Tally Finance does not accept liability for any loss or damage incurred as a result of relying on the information provided.
Kimberlee Brown
B COM (ACC) LLB CPA
T/A TALLY
ABN 81 010 351 330
Registered Tax Agent 26052112