October 1, 2026

Switching to Xero or QuickBooks in Canada: GST/HST reporting periods, the Quick Method, and what has to match on day one

The short answer: cut over on the first day of a GST/HST reporting period, tell the new software the same filing frequency the CRA has on record, and find out before you choose a platform whether you file under the regular method or the Quick Method. The regular method is what Xero and QuickBooks Online are built around: tax collected minus input tax credits (ITCs). The Quick Method works differently: you remit a fixed percentage of tax-included sales, and neither vendor’s documentation describes a built-in setting for it. If you use it, the return in the new software needs a manual step every period.

The one table to read before cutover

	Regular method	Quick Method
Net tax	GST/HST collected or collectible, minus ITCs on purchases	A remittance rate times tax-included eligible sales, less a 1% credit on the first $30,000 each fiscal year
ITCs	On business purchases generally	Only on capital assets, real property and a few listed cases
Xero	Native GST/HST return	Not supported; listed as an open request on Xero’s product ideas board
QuickBooks Online	Native return; you set province, period start, filing frequency and reporting method	No Quick Method option in Intuit’s Canadian setup steps; a line adjustment on the return is the tool

Cut over on a reporting-period boundary

The CRA assigns your reporting period from annual taxable supplies: annual at $1.5 million or less, quarterly above $1.5 million up to $6 million, and monthly above $6 million, with the option to file more often than assigned. Whatever yours is, start the new ledger on the first day of a period. The old system files every return up to the cutover; the new one files everything after it.

Both platforms need this set correctly at the start. Xero lets you choose the start date of your first GST/HST return only while no return has been finalised, and the choices depend on your conversion date and tax period. QuickBooks Online asks for the Start of tax period, Filing frequency and Reporting method when you set up sales tax. An annual filer who moves mid-year will have one return assembled from both ledgers; plan for it.

Regular method: open invoices and unclaimed ITCs

Under the regular method, the GST/HST on a sale is generally reported in the period it is billed, so the tax on open invoices at cutover is already on a filed or current return. Bring the invoices across individually so customers still show what they owe, but date them before the first new period so they do not feed the first return again. Reconcile the new GST/HST payable account to the last return’s balance, not to zero. QuickBooks Online’s reporting method field matters here: Intuit says it is usually Accrual, and it must match how you have been filing.

Check one thing on the purchase side before you switch off the old system: ITCs you have not yet claimed. For most registrants, the CRA allows ITCs to be claimed up to the due date of the return for the last period ending within four years after the period they first became claimable. Export a list of any you were holding back, with invoice copies, because the new software will not know they exist.

Quick Method: the numbers and the manual step

CRA guide RC4058 sets out the rules. You are eligible if your annual worldwide taxable supplies, together with your associates’, including GST/HST, do not exceed $400,000. The election takes effect on the first day of a reporting period. You can revoke it only after it has been in effect for one year, and after revoking you wait at least a year before electing again.

The rate depends on what you sell and where your permanent establishment is. For a business in a 13% HST province making 13% HST supplies, the rate is 8.8% for service businesses and 4.4% for businesses buying goods for resale. In a GST-only province making 5% supplies, it is 3.6% for services and 1.8% for resale.

Worked example. An Ontario consultant on the Quick Method bills $50,000 plus 13% HST in the first quarter of its fiscal year, so tax-included sales are $56,500 and HST charged on invoices is $6,500. Net tax is $56,500 × 8.8% = $4,972, less the 1% credit on the first $30,000 ($300), giving $4,672 to remit. Any software that builds the return from invoice tax codes will show $6,500 owed. The $1,828 gap is what the Quick Method exists to produce, and in the new software it has to be entered by hand.

In Xero, Quick Method support has been an open request on Xero’s product ideas board since April 2023, still marked “submitted”. In QuickBooks Online, the Adjust link on each line of the Prepare return page lets you enter a positive or negative amount, and QuickBooks posts a journal entry for it automatically. Either way, invoices still charge the full 5%, 13% or 15%; only the return changes. Keep each period’s calculation with the return, and make sure ITC-coded bills on everyday expenses do not feed it.

Records the old system still has to answer for

GST/HST records must be kept for six years after the end of the year they relate to, unless the CRA gives written permission to dispose of them earlier. Before you close it, export the filed returns, the detail behind each, and the general ledger, or keep read-only access. PST in British Columbia, Saskatchewan and Manitoba, and QST in Quebec, are separate returns with their own setup in both platforms. Map those tax codes separately; this guide covers GST/HST only.

A five-step pre-cutover check

1. Confirm your reporting period and method from the last return and any CRA correspondence. 2. Choose the cutover as the first day of a reporting period. 3. File the last return from the old system and export its detail. 4. Export open invoices and bills individually with tax codes, plus a list of any unclaimed ITCs. 5. After import, set the period start and frequency in the new software, then reconcile GST/HST payable to the last return. If you are on the Quick Method, write down how each period’s adjustment will be calculated before the first return is due.

For the wider Canadian picture, including Sage 50 Canada and QuickBooks Desktop, see our Canadian migration guide. The UK equivalent of this check is our guide to VAT schemes when you switch software.

Frequently asked questions

Does Xero support the GST/HST Quick Method?

Not natively. Xero’s Canadian GST/HST return calculates tax collected minus ITCs. Quick Method support is an open request on Xero’s product ideas board, so Quick Method filers calculate net tax outside the return and adjust it.

Can I switch accounting software in the middle of a GST/HST reporting period?

You can, but that period’s return is then built from two ledgers. Cutting over on the first day of a reporting period is cleaner: the old system files every return up to the cutover and the new one files everything after it.

Do I lose input tax credits I have not claimed yet?

Not if you track them. For most registrants the CRA allows ITCs to be claimed up to the due date of the return for the last period ending within four years after they first became claimable. Export the list before closing the old system.

How long do I keep the old software’s GST/HST records?

Six years after the end of the year they relate to, unless the CRA gives written permission to dispose of them earlier. Export returns, supporting detail and the general ledger, or keep read-only access.