Most hospitality businesses have fallen into this situation, especially during the COVID pandemic – Cash flow fluctuated like a feast or famine and trying to forecast the future cash flow was impossible.  Then the next BAS Activity Statement was due and there wasn’t enough cash to pay it.  Next minute…. you have an ATO debt and a payment plan!

As you make regular payments to decrease the debt, you lose track of how much is actually owing.  It can feel like a never ending money pit.

Well there is an easy way to keep a close eye on that ATO Integrated Client Account balance – also referred to as ATO ICA.

As BAS Agent bookkeepers, we can do various things in your General Ledger to keep the information easy to read, up to date and tidy.

Option 1:
Create a bill in Xero – just like any other supplier, we add the ATO debt or Activity Statement to the Payables.  Then you can see the payments against the balance of the bill.

This is a convenient method, but gets incredibly messy if you are making multiple payments over many months.  And it annoys accountants no end!

A bill will show up on your Aged Payables report with other suppliers.  The downside is that your Payables will look HUGE!

For example; if you have an ATO debt of $25,000 that is being paid off over 13 months, this transaction will sit on your Aged Payables for 13 months. It may look like you can’t pay your suppliers in a timely manner.  Not a good look if you need to show investors this report.
This method has it’s place but needs to be managed well.

Option 2:

We create a General Ledger line on your Balance Sheet called “ATO Integrated Client Account” or ICA.  This will usually be under the Current Liabilities section of the Balance Sheet.

Business owners will often look at the Profit and Loss Statement, and ignore the Balance Sheet.  But if your Balance Sheet is well maintained it will give you an efficient snap shot on the state of your business.  It easily defines what you owe, and what you own.  For info about the Balance Sheet click HERE

In Xero, run a Balance Sheet report, cast your eye down to the Current Liabilities to find the ATO Integrated Client Account.  A negative balance means the ATO owes you.  A positive balance means you owe the ATO.

Here is a 2 minute video to demonstrate how to run the Xero report, identify the ATO balance, open the transactions, and how to add it to the Xero Dashboard for a quick reference.

Watch HERE  or view below



If your bookkeeper or accountant has not created an ATO ledger account, we strongly suggest you request it.  Following the balance and payments can make a big difference to managing cash flow and ATO debt payments.

Call Restaurant Bookkeepers Australia 1300 043 327 or drop a line via live chat or contact page. HERE