October 10, 2026

Cash or accruals GST in Australia: what has to match when you switch to Xero or QuickBooks

The short answer: before you move from MYOB, Reckon, QuickBooks Desktop or anything else into Xero or QuickBooks Online, confirm whether the ATO has you on a cash or non-cash (accruals) GST basis, and on Simpler or full BAS. Set the new file up the same way and cut over on the first day of a BAS period. The basis decides how open invoices and unpaid bills must come across. On a cash basis their GST has not been reported yet, so they must arrive one by one or the GST goes missing. On accruals it already has, so it must not be reported twice.

This matters more in 2026: the ATO said in April that it is moving some businesses that outgrew the thresholds onto the correct GST methods from 1 July 2026.

The one table to read before cutover

	Cash basis	Non-cash (accruals) basis
GST on a sale	On the BAS for the period you are paid; part payment, part GST	For the period you issue the tax invoice or receive any payment, whichever is first
GST credit on a purchase	For the period you pay	For the period you receive the tax invoice or pay, whichever is first
Who can use it	Aggregated turnover under $10 million, cash accounting for income tax, and a few other groups	Anyone; required for most larger businesses
Open invoices and bills at cutover	GST not yet reported or claimed. Import each one with its GST code	GST already on an old-system BAS. Import with original dates and keep it out of the first new BAS

The thresholds the ATO is enforcing from 1 July 2026

The ATO business bulletin of 7 April 2026 draws two lines. At a GST turnover of $10 million or more you must use full BAS instead of Simpler BAS, and account for GST on a non-cash basis. At $20 million or more you must report GST monthly. Full BAS means completing every GST label, not just G1, 1A and 1B. The ATO says it will notify you or your tax professional first, and that you can switch voluntarily in Online services for business.

If you have had that notice and are also changing software, make both changes on the same date. A change from cash to non-cash can only take effect on the first day of a tax period, which is also the cleanest day to start a new ledger.

Cut over on the first day of a BAS period

Quarterly BAS is due on 28 October, 28 February, 28 April and 28 July; monthly BAS on the 21st of the following month. The old system lodges every BAS up to the cutover and the new one lodges everything after it. A mid-quarter cutover leaves one BAS built from two ledgers, which is where cash-basis GST goes missing. For choosing between 1 July, a quarter start and a mid-year move, see MYOB migration timing around EOFY; if you run payroll, also read STP when you change payroll software mid-year.

Cash basis: why open invoices must come across one by one

Worked example (illustrative). A consultancy on a cash basis cuts over to QuickBooks Online on 1 October. On 20 September it issued an invoice for $11,000 including $1,000 GST. The customer paid $4,400 on 28 September and pays the remaining $6,600 on 15 October. The September receipt carries $400 of GST, reported on the old system's July to September BAS. The October receipt carries $600, which belongs on the new system's October to December BAS.

If receivables are loaded as one opening-balance journal, the October payment clears a balance with no GST code and that BAS is $600 short. Load the invoice itself, with its original date, the $6,600 open balance and its GST code, and the new file reports the $600 when the money lands. Unpaid bills work the same way for GST credits. The ATO allows four years to claim a credit, but a lump-sum opening balance does not remember that the credit exists.

Accruals: stop the GST counting twice

On a non-cash basis, the GST on every open invoice was reported for the period it was issued. Import open invoices and bills with their original dates so they fall in periods the new file never lodges. Bring the GST balance across as the amount still owing on the last lodged BAS, not as zero. In QuickBooks Online the GST Liability Report can be run on either basis, a quick check that the first period shows only new-period transactions.

Set the new file up before you import anything

QuickBooks Online asks for the accounting method and BAS lodgement frequency when you set up GST, and Intuit notes that GST cannot be turned off once it is on. Intuit also says all new files default to Simpler GST codes, and that a switch from Simpler to Detailed is made by its support team. A business that must lodge full BAS should arrange that before the import, because the tax code on every imported transaction depends on it. Xero has its own activity statement settings; check the basis and frequency there against your last lodged BAS before the first activity statement.

Changing method and software at the same time

Moving from cash to non-cash on the cutover date? The ATO says that in the first non-cash period you must report the GST on sales invoiced before the change but not yet paid, plus the remaining GST on part-paid sales, and you can claim unclaimed GST credits for which you hold a tax invoice. The old system's aged receivables and aged payables at the change date are your catch-up list. Do not assume the new software will find these items, because they are dated in a period it never lodged. Agree with your BAS agent how the catch-up goes on the first return. The bad debt adjustment rules also depend on your basis, so settle dead invoices first.

A five-step pre-cutover check

Confirm your GST basis, reporting cycle and BAS type from the last BAS and any ATO letter.
Choose the first day of a BAS period as the cutover date.
Lodge the last BAS from the old system and save its GST detail.
Export open invoices and unpaid bills individually, with GST codes and part payments.
Set the new file's basis, frequency and GST coding before importing, then reconcile the first GST report to the last lodged BAS.

For the wider picture, see our Australian migration guide. The same checks for other regions: UK VAT schemes and Canadian GST/HST.

Frequently asked questions

Can I use cash basis GST in Xero or QuickBooks Online?

Yes, if you are eligible. The ATO allows the cash basis for businesses with aggregated turnover under $10 million, those using cash accounting for income tax, and some other groups. QuickBooks Online asks for the accounting method when you set up GST, and Xero has its own activity statement settings.

What happens to GST on unpaid invoices when I switch software on a cash basis?

It has not been reported yet. It belongs on the BAS for the period the customer pays, so each open invoice must come across with its GST code and open balance. A single opening-balance journal loses that GST.

The ATO moved us to non-cash from 1 July 2026. What about invoices from before?

In the first non-cash period you report the GST on sales invoiced before the change but not yet paid, and the remaining GST on part-paid sales. You can also claim unclaimed GST credits for which you hold a tax invoice. Use the old system's aged receivables and payables at the change date as the list.