Singapore GST: Accrual vs. Cash Accounting (Invoice Timing = SGD 7K Difference)
Invoice customer SGD 100K January, they pay February. Accrual: GST SGD 7K due January. Cash: GST SGD 7K due February. If customer doesn't pay until March, cash is better. Over year, SGD 50K pending invoices = SGD 3.5K difference in GST timing. AskBiz tracks which method applied.
GST Accounting Methods#
(1) Accrual: GST due when invoice issued (regardless of payment). (2) Cash: GST due when payment received. Singapore allows both. Wrong choice = cash flow or compliance issues.
The Cash Flow Impact#
Accrual: invoice SGD 100K Jan, GST SGD 7K due to IRAS same month. Customer delays payment 60 days. You pay GST from own cash 2 months early. Cash method: GST due when SGD 100K received (March), matching cash flow.
Fast-paying customers (15-30 days): accrual matches reality.
Which Is Better?#
Fast-paying customers (15-30 days): accrual matches reality. Slow-paying customers (60+ days): cash method better. Most SGD 1M+ businesses use accrual (more conservative, IRAS expects it).
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AskBiz GST Method Selection#
Analyzes customer payment patterns. "Your customers pay average 45 days. Cash method is better for cash flow (saves SGD 3.2K GST float). But accrual recommended for IRAS compliance (standard for your turnover). Recommend: accrual with improved AR collections."
- Invoice customer SGD 100K January, they pay February.
- Accrual: GST SGD 7K due January.
- Cash: GST SGD 7K due February.
People also ask
Can I switch between methods?
IRAS approval required. Switch usually allowed once per 2 years.
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