Many owners say, “Profit looks okay, but BAS week still hurts.” That usually means timing mismatch, not only margin weakness.
GST method settings can change cash timing enough to alter your pricing decisions.
Quick Summary
- GST method affects when tax cash leaves your business.
- Cash and non-cash methods can produce different BAS pressure in the same month.
- Weekly GST reserve transfers reduce deadline shock.
- Menu pricing decisions should include method-specific cash timing.
Why this matters in 2026
ABS monthly CPI indicator for December 2025 reported:
- annual movement:
2.5% - food and non-alcoholic beverages:
+3.6% - restaurant meals and takeaway foods:
+2.8%
In a moderate but still tight environment, cash timing errors can undo otherwise good pricing.
ATO method basics (operator version)
ATO guidance describes two common ways to account for GST:
- Cash method: GST recognised when payment is received/paid.
- Non-cash (accrual) method: GST recognised when invoices are issued/received.
Neither method is “better” for everyone. But they create different short-term cash patterns.
The planning formula
periodNetGST = GSTOnSalesRecognised - GSTCreditsRecognised
weeklyGSTReserve = expectedPeriodNetGST / weeksInPeriodThen check liquidity:
twoWeekCoverage = projectedCashInNext2Weeks / projectedCashOutNext2WeeksIf denominator is 0, return 0 and correct your outflow model.
Worked example (same trade, different method timing)
Assume one month:
- invoices issued to customers:
A$90,000 - cash collected from customers:
A$72,000 - supplier invoices received:
A$42,000 - supplier invoices paid:
A$30,000
Cash method view
GST on sales = 72,000 x 10% = A$7,200
GST credits = 30,000 x 10% = A$3,000
periodNetGST = 7,200 - 3,000 = A$4,200Non-cash method view
GST on sales = 90,000 x 10% = A$9,000
GST credits = 42,000 x 10% = A$4,200
periodNetGST = 9,000 - 4,200 = A$4,800Difference: A$600 in the same month.
For small venues, that difference can decide whether you delay supplier payments or not.
Pricing implication owners miss
If your GST cash timing is tighter than expected:
- avoid broad discounts until BAS coverage is safe
- prioritise price corrections on low-contribution high-volume items
- protect cash-first channels (pickup/direct) during heavy tax weeks
12-minute weekly checklist
- Confirm actual collections vs invoices
- Recompute expected period net GST
- Transfer weekly GST reserve
- Check BAS due-date calendar and current buffer
- Adjust one pricing/promo lever only if coverage is weak
Common mistakes
- Treating GST as a month-end admin task only
- Ignoring method timing effects in cash planning
- Running promotions without checking BAS-week coverage
- Using one static reserve amount all quarter
Bottom line
Margin and cash timing are not the same problem. You need both right.
When GST method, reserve cadence, and pricing decisions are aligned, BAS weeks stop being surprises.
Related Guides
- Australia BAS + PAYG Cash Reserve Calendar (2026)
- Australia Award Wage + CPI Menu Pricing Guide (2026)
- Australia Menu Price Review Checklist
KitchenCost helps owner-operators connect recipe margin and tax-timing reality in one workflow.