Avoid a GST / BAS nightmare: 3 quick tips to help your clients set enough cash aside for tax this holiday season

‍The GST / BAS tax due dates are just around the corner – have you reminded your clients not to spend all of their money this Christmas?

If you’re reading this article, you’re an accountant so you’re well aware of the tax due dates coming up this January. Those jingle bells are ringing, so before you know it, Christmas will be over and it’ll be time to start chasing up your clients to get their taxes in on time…

But while you may be aware of these dates coming up, your clients probably aren’t… They’re small business owners, so they’ve got a lot to think about this time of year. They’re probably planning staff Christmas parties, liaising with staff about Christmas leave, and like everyone else this time of year, rushing to get that never-ending to-do list done before December 25th.

You’re the tax professional – so it’s your responsibility to remind your clients about these important tax dates. And doing this ahead of time is so important because your small business clients might treat their business cash as their own and spend it on their personal Christmas shopping lists. So it’s about being proactive and reminding them that the money in the company bank account isn’t for personal use until tax obligations are paid!

Article Contents:

Tip #1: Use your financial advisory platform to triage which clients might get bill shock

Tip #2: Communicate with your clients proactively and regularly

Tip #3: Ensure your clients are aware of the consequences of not paying taxes on time

Tip #1: Triage which clients might get bill shock, with the help of your accounting software & financial advisory platform

Before you reach out to your clients, the first thing you’re going to want to do is make use of the accounting software tools you have at your disposal, in order to triage which clients need your help the most.

Luckily, you’re a modern accountant, which means that you don’t have to manually analyse each and every one of your clients data, or sift through files of paper, or even spreadsheets. You can use state-of-the-art accounting software tools to do this for you – such as Xero and Aider.

With the use of Xero and Aider, you can effortlessly identify which clients need your assistance more urgently than others – i.e. those behind on reconciliations, or those who might get bill shock. You can also use this step to estimate how much your clients might owe so that you have this information ready to communicate with them.

Here’s how you can use Aider to triage which clients to reach out to first:

1. Ensure your clients’ data is up to date with the help of Aider’s ‘GST Period Completion’ insight. This step helps to proactively identify and communicate with clients at risk of not completing their reconciliations in time to meet their GST filing obligations.

2. Use Aider’s colour-coded Dashboard to easily spot and triage which clients need your attention the most. Red indicates urgent attention needed, green indicates significant positive trends, and white indicates no significant trends. 

3. Filter and sort the Aider Dashboard by which clients have the highest GST to pay. Then make use of Aider’s GST payable forecasts to encourage your clients to save ahead of time in preparation for the payment due date. 

4. Use Aider's automated 'Income Tax Forecast' to help you check which clients may need to pay more provisional income tax this January. Factor this additional tax amount into how much you recommend your clients should set aside. 

5. Compare your clients cash projections to taxes due, using Aider’s ‘Cash Flow Forecast’ feature. This will help you identify which clients may have difficulty meeting January tax obligations, even without overspending at Christmas.

• Send your clients visual graphs, GST forecasts and reconciliation reminders directly via Aider’s financial advisory platform. Sharing these visual insights with your clients will help them understand just how important it will be to not dip into their business bank accounts this holiday season.

Tip #2: Communicate with your clients proactively between now & the tax due dates

Once you have triaged your clients with your accounting software tools, and have figured out which clients need your attention most, it’s time to start reaching out to them. And there is no time like the present! 

Don’t wait until the New Year when it’s sunny and warm and the last thing you want to be doing is stressing because your clients have spent all of their money over Christmas and now you’ve got to come up with a last-minute solution to help them pay their tax bills.

Many of your clients might get bill shock if you tell them too late, so reach out as soon as possible. We also recommend regularly checking in with your clients over the course of the next 4-6 weeks to ensure they’re prepared for the upcoming GST due date – and to say happy holidays, of course!

The focus of this proactive communication should be:

1. Warning your clients of the upcoming tax due dates (15th January for New Zealand and 21st of January for Australia);

2. Reminding your clients to keep their reconciliations up-to-date so that you can accurately monitor how much taxes may be due;

3. If needed, warning those clients at risk of high tax bill shock, especially if their business cash position already seems lower than the tax estimates;

4. And finally, reminding your clients not to spend money they don’t have! They may have money in the bank right now, but those bills are just around the corner…

Tip #3: Ensure your clients are aware of the consequences that could occur if they do not set aside sufficient funds for obligatory tax 

The final thing you’ll need to do is communicate with your clients just how important setting aside sufficient funds for the upcoming tax due dates really is. 

It’s about reminding your clients that it is a legal obligation to pay taxes. To reinforce this, ensure to alert them of the consequences that could occur should they fail to do so. As an accountant you are well aware of the consequences that failing to pay taxes can lead to, but your clients may not be. This is why it is so important to communicate this with them now, not later. 

Running a business and paying taxes is stressful enough as it is, so failure to pay taxes on time will only add to this stress for your clients – it will result in cash flow problems which will affect your clients ability to run their business. 

This is why it is vital to be proactive, instead of reactive. Doing so will help you be a more trusted accountant – one who goes the extra mile to help (and keep) their clients, rather than one who just completes the bare minimum and risks losing clients to churn. It will also help you build better relationships with your clients and prime them for more services if you want to upsell in the future. It is a win-win for both your clients and your practice. 

Remind your clients of the following negative consequences that could occur:

• Additional costs and expenses; including late filing penalties and fees, interest costs added to the taxes due, late refunds, and so on.

• Cash flow problems and borrowing debt; having to scramble to take out a loan at the last minute, as well as ongoing cash problems as a result.

• Debt collectors and legal implications; in the worst case scenario (i.e. if they pay very late, or not at all) they could be charged with legal penalties. 

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Go the extra mile for your clients this holiday season to ensure they have a stress-free start to the New Year 

In just a few clicks on Aider’s financial advisory platform, you can easily identify which of your clients need assistance this side of Christmas to ensure they’re prepared for the upcoming tax due dates. 

By simply glancing at your Aider Dashboard, you can quickly triage which clients to reach out to first, estimate their tax costs and share multiple insights directly via the platform. 

Don’t wait until the New Year to alert your clients – turn the usually negative and reactive tax payment conversation into proactive tax saving advice.

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Need help preparing your clients for the GST / BAS due dates coming up? 

‍Power up your practice with an early warning system like Aider. Start your 14 day free trial.