QuickBooks Online Basics

QuickBooks Online was built for a global market, which means an Australian file only works properly once GST, BAS and payroll settings are configured for the ATO rather than left on defaults. Plenty of the files we tidy up were set up in a hurry and never revisited.

Here are the basics that make QBO behave like Australian software.

Turn on GST properly

The GST centre, found under Taxes, is where QBO tracks everything it will later report on your BAS. When you switch it on, QBO asks for your accounting basis — cash or accrual — and your lodgement frequency. These must match how you are actually registered with the ATO; most small businesses report quarterly on a cash basis, but yours may differ. If you are not yet registered, remember that registration becomes compulsory once turnover reaches the GST threshold of $75,000 — check the current ATO figure and act before you cross it.

Use the right GST codes

Australian QBO uses a handful of GST codes that matter day to day:

• GST for standard taxable sales and purchases.
• GST free for items such as basic food, some health services and exports.
• Input taxed for things like residential rent and most financial supplies.
• Out of scope for transactions that never touch the BAS, such as transfers between your own accounts, wages and superannuation payments.

Set a default GST code on each account in the chart of accounts so day-to-day coding starts from a sensible position rather than a guess.

Connect bank feeds, then reconcile anyway

Bank feeds pull transactions in automatically, but a feed is not a reconciliation. Feeds occasionally drop or duplicate transactions, so reconcile each account to the actual bank statement every month. Bank rules speed up coding for regular suppliers, but review what they post — a rule with the wrong GST code repeats its mistake silently, week after week.

Know how QBO maps to the BAS

When a BAS period ends, the GST centre assembles the figures for the main labels: total sales at G1, GST on sales at 1A and GST on purchases at 1B. If payroll is switched on, PAYG withholding flows to W1 and W2. Before anything is lodged, run the GST detail reports and scan for oddities — large amounts on unusual codes, or GST claimed on purchases from suppliers who are not registered. QBO can lodge the BAS electronically once connected to the ATO, or your BAS or tax agent can lodge from their own systems using your QBO figures.

Can QuickBooks Online lodge my BAS with the ATO?

Yes — Australian QBO supports electronic BAS lodgement once the connection to the ATO is set up, or a registered BAS or tax agent can lodge on your behalf using the figures from your file.

Should I choose cash or accrual GST in QBO?

Whichever matches your ATO registration; if the software setting differs from how you are registered, your BAS figures will be wrong even when the bookkeeping itself is right.

What is the difference between GST free and out of scope?

GST-free sales still appear on your BAS as part of reported turnover, while out-of-scope transactions are left off the BAS entirely.