How Do I Catch Up on Overdue Bookkeeping and BAS? A Step-by-Step Plan

Last updated: 25 October 2026.

Falling behind on bookkeeping and BAS is far more common than most owners admit. A busy season, a departed bookkeeper, a move to a new system, or simply avoidance can leave months of unreconciled transactions and unlodged statements. The good news is that it is fixable, and the longer it sits the more it tends to cost, so the best time to start is now.

This guide gives you a practical order of work, explains in plain English how ATO late-lodgment penalties and interest work (checked against the ATO’s own pages on 25 October 2026), and shows how to avoid landing back in the same spot. It is general information, not advice on your particular situation.

The short version: gather your records, work out which statements are outstanding, lodge the oldest first, pay what you can and talk to the ATO about the rest before due dates pass, and then put a monthly routine in place so you do not fall behind again.

Step 1: Do not panic, and do not hide

The ATO says that, generally, it does not apply penalties in isolated cases of late lodgment, and that it considers your circumstances. Before it applies a failure to lodge (FTL) penalty it will warn you by phone or in writing and issue a notice to lodge, which gives you the opportunity to lodge or to engage with the ATO. Engaging early almost always gives you more options than waiting for a notice.

Step 2: Work out exactly what is overdue

List every period you are required to lodge for: BAS or IAS, GST, PAYG withholding, PAYG instalments, and Single Touch Payroll (STP) reports if you have employees. Your ATO online services for business account shows what is due and a history of lodged statements for the last 4 years. A registered BAS agent can see the same information through the ATO’s agent services once you authorise them.

Write down for each period: the due date, whether it has been lodged, and whether you expect a payment, a refund or a nil result. That last point matters, because the ATO says it generally will not issue an FTL penalty notice for a late-lodged activity statement if the lodgment results in a refund or a nil result, with exceptions (for example where a penalty was already applied before lodgment, or for large withholders).

Step 3: Gather your records

You need bank and card statements for every account used by the business, sales records (invoices, point-of-sale or online store reports), supplier bills and receipts, payroll and super records, loan statements, and any previous BAS. If records are missing, you can reconstruct them. The ATO’s small business guidance lists sources to try:

Bank, credit union and building society statements, which the ATO calls “a great resource” for reconstructing records.
Cloud data, back-up files and off-site providers such as payroll or IT providers.
Customers and suppliers, who may hold invoices, remittance advices and purchase orders.
Lenders, landlords, insurers and any funding body that may hold contracts, leases or asset lists.

The ATO’s online services also let you view third-party data it holds about you, such as business transactions through payment systems, government grants and taxable payments, for the current and previous three financial years. Use it as a cross-check, but validate it against your own records.

Step 4: Get the books into order

Set up (or fix) your accounting software with bank feeds, so transactions flow in automatically. See our guide to choosing between Xero and MYOB.
Work period by period, oldest first. Reconcile each bank account to the statement balance for the end of each month.
Code transactions and attach support. Receipts, tax invoices and notes for anything unusual.
Reconcile payroll and super. Check wages, PAYG withholding and super against what was actually paid, and see our note on Payday Super from 1 July 2026 so the new deadlines are built in.
Review the GST. Check that GST credits are only claimed with valid tax invoices where required, and that sales are coded correctly.

Our guide to year-end bookkeeping is a useful checklist for the final tidy-up.

Step 5: Lodge in the right order

The ATO’s guidance for lodging in Online services for business says that if you have several activity statements overdue, you should ensure the first activity statement for the financial year is lodged before the subsequent ones. In practice that means oldest first, not newest first. Each statement needs its own reconciled figures, so a catch-up works best as a sequence, not a single lump.

Also watch the time limit on claiming credits. The ATO says a 4-year time limit applies for claiming GST credits, so very old periods may need extra care.

Note that it is your responsibility to meet your obligations, even if you use an agent. If you engage a registered BAS agent to lodge for you, you also need to give them all the relevant information in time. The ATO’s “safe harbour” can protect you from an FTL penalty if you gave your registered agent everything needed to lodge by the due date and the agent’s failure to lodge was not reckless or intentional, but you need evidence that you provided the information.

What penalties and interest can apply?

Item	What the ATO says
Failure to lodge on time (FTL) penalty	One penalty unit for every 28 days (or part of 28 days) the document is overdue, up to a maximum of 5 penalty units. The base amount applies to individuals and small withholders.
Value of a penalty unit	A$364 for infringements from 1 July 2026 (A$330 from 7 November 2024 to 30 June 2026).
Multipliers	The base penalty is multiplied by 2 for medium withholders and by 5 for large withholders. A significant global entity multiplies it by 500.
General interest charge (GIC) on unpaid amounts	11.51% a year for October to December 2026 (11.43% for July to September 2026). The rate is updated each quarter.

As an illustration, the base FTL penalty for a small business reaches its maximum of 5 penalty units after more than 112 days late: 5 × A$364 = A$1,820. This is our own calculation from the ATO figures for the base case and is only an example; your actual position depends on your circumstances and the ATO’s decision.

The GIC applies where an amount of tax or other liability remains unpaid after the date it should have been paid, including where a return is lodged late. GIC accrues daily, which is one reason to lodge and pay as early as you can, even if you cannot pay in full.

If you cannot pay in full

The ATO says that if you are finding it hard to lodge and pay in full and on time, you should contact it before the due date, and that you may be able to enter into a payment plan. GIC applies to any amount not paid by the due date, so a plan that clears the debt in the shortest practical period reduces the interest. The ATO also notes that lodging on time gives you certainty about what you owe.

Can a penalty be removed?

You can ask the ATO to remit all or part of an FTL penalty, based on your individual circumstances. The ATO expects you to lodge the outstanding documents before you ask. It says circumstances where it would likely remit include severe illness (yours, your agent’s, or someone you care for), a disaster affecting your records, or a failure to receive information from third parties despite a genuine attempt to get it. It says it is unlikely to accept being on holiday, busy with work, a short-term non-severe illness, or the fact that you did not receive a reminder.

Step 6: Make sure it never happens again

Monthly bookkeeping routine. Reconcile every month, not every quarter.
Calendar your due dates. See our BAS due dates for 2026-27.
Set aside tax money. Move GST, PAYG and super into a separate account as you receive income.
Separate business and personal spending. This is the single most common cause of messy books.
Have someone responsible. An internal owner or an outsourced provider.

How long does catching up take?

It depends almost entirely on the condition of the records. A few months of cleanly downloaded bank data is quick. Years of missing documents and unreconciled accounts take much longer. We scope catch-up work separately from ongoing bookkeeping, so you know the cost before work starts, and then move you onto a fixed-fee monthly routine.

How we help

We help Sydney businesses and not-for-profits get back on track: we review what is outstanding, reconcile the books period by period, prepare and lodge overdue BAS as a registered BAS agent, and then keep you current with monthly bookkeeping. We quote catch-up work as a fixed fee after a short scope call. See our BAS agent services and bookkeeping services, or email info@guidancegrowth.com.au.

Frequently asked questions

What happens if I lodge my BAS late?

The ATO may apply a failure to lodge penalty of one penalty unit per 28 days overdue, to a maximum of 5 units, and general interest charge on any unpaid amount. It generally warns you first and does not usually apply FTL penalties in isolated cases or where the statement results in a refund or nil, subject to exceptions.

Which BAS should I lodge first?

The ATO says to lodge the first overdue activity statement for the financial year before subsequent statements, so lodge oldest first.

How much is the late lodgment penalty?

A penalty unit is A$364 for infringements from 1 July 2026. The base FTL penalty is 1 unit per 28 days up to 5 units (A$1,820), multiplied by 2 or 5 for larger withholders.

Can the ATO remove a late lodgment penalty?

You can request remission, and the ATO decides on your circumstances. It expects the outstanding documents to be lodged first.

What if I cannot find my records?

The ATO lists ways to reconstruct them, including bank statements, cloud and off-site data, and copies from customers, suppliers and lenders.

What is the GIC rate now?

The ATO’s general interest charge rate for October to December 2026 is 11.51% a year. It is updated quarterly.

Sources and further reading

This article is general information, not personal advice. Rules and dates can change, so check ato.gov.au or acnc.gov.au for the latest, or speak to us about your situation.