What are the cash and accrual GST reporting methods?
GST amounts collected or paid can be reported to the Australian Tax Office (ATO) either on a cash or accrual basis. The difference between these is determined by when the liability is recorded and when you report tax collected and paid. Cash Basis: If you choose to report your GST on a cash basis, you will not pay any GST to the ATO until you have collected it from your customers. You will also not be able to claim back any GST you have been charged by your suppliers until you actually pay your suppliers. The amount reported represents 1/11th of the amount actually paid or received during the tax period. Accrual basis (non cash basis): Using the accrual basis, you recognise GST when you receive an invoice, i.e. when you have a legal obligation to pay your suppliers, and when you supply goods or services, i.e. when you have a legal right to claim payment.
