Switching from Invoice basis to Cash basis changes when VAT is reported — from the date an invoice is issued to the date payment is received or made. This change does not retroactively adjust invoices already included in past VAT returns.
Note: Always consult a tax professional before changing your VAT reporting method to ensure compliance with local tax laws.
Before Making the Change
Review all unpaid invoices as of the end of your last VAT Return period under Invoice basis.
Be prepared to manually track payments for invoices that were outstanding at the time of the changeover.
Recommended Transition Steps
Time the switch at the end of a VAT period to minimise complications.
Issue credit notes for any unpaid invoices before running your final Invoice-basis VAT return — this brings those invoice balances to zero.
Submit your final VAT Return on Invoice basis.
Re-issue the credited invoices — these will now be accounted for under Cash basis going forward.
Change the tax basis in Re-Leased under Edit Settings for Owner.
Create your next VAT Return on Cash basis and review it thoroughly before submitting.
VAT applies to European customers. Asia-Pacific customers use GST (Goods and Services Tax). For more information on regional terminology, see our Glossary of Regional Terminology.