How consultant accounting usually works
A solid process starts with a short discovery to understand your structure (sole trader, company or trust), invoicing model (hourly, fixed fee, retainer), software stack (e.g. Xero, MYOB, QuickBooks Online, Xero Projects, Harvest, Toggl), current reconciliations, open ATO lodgements and any deadline pressure.
Work then moves through three layers:
- Immediate triage: reconcile bank feeds, fix coding issues, capture missing bills/receipts, lodge overdue BAS or tax, correct payroll and super.
- Process design: implement time capture and WIP review, tighten invoice cycles, automate receipts, set GST rules (domestic vs overseas clients), build month-end checklists.
- Ongoing review: monthly bookkeeping and BAS, quarterly/annual tax planning, cash-flow forecasting, KPI reporting (utilisation, realisation, margin by project/client).
Australian context to keep in view
- GST and BAS: register when turnover reaches $75,000. Most Australian consulting services attract 10% GST. Some exports of services can be GST-free if used outside Australia.
- PSI (Personal Services Income): if income mainly rewards your personal effort, PSI rules may limit certain deductions and affect how income is taxed. Get assessed early.
- Payroll and super: if you hire, set up STP, PAYG withholding and super guarantee. Director wages or drawings need correct treatment based on structure.
- Common deductions: software subscriptions, professional indemnity, relevant training/CPD, home office (ATO fixed-rate method), travel with substantiation, phones and internet apportioned to business use.
- Project health: track WIP, unbilled time, scope creep and realisation. Your accountant should turn these into simple monthly insights you can act on.
What to compare before you commit
Scope
Confirm the proposal covers setup, clean-up, BAS and tax lodgements, payroll and super, plus the reporting you need for billable time, WIP and margins.
Software fit
Look for real fluency with your stack. Ask how time, expenses, invoices and project profitability will flow through Xero/MYOB/QBO and any add-ons.
Turnaround and communication
Clarify month-end timelines, BAS cycles, escalation paths during deadlines, and who you’ll speak with for day-to-day vs planning queries.
Commercial fit
Compare fixed-fee vs hourly, inclusion/exclusion lists, meeting cadence and whether you want compliance-only or ongoing advisory and planning.
Best next steps
Write down the outcome you want: on-time BAS, Xero set-up, a clean payroll, cash-flow clarity, PSI assessment, or visibility on project profitability. Use that to shortlist providers who explain the process clearly and tie their work to your goals.
If you are switching providers, collect recent BAS lodgements, payroll reports, tax returns, bank access, and software logins. A smooth handover saves time and cost.
Use the links on this page to dive into bookkeeping, payroll or tax for consultants, then make contact with a focused brief.
Frequently asked questions
What does a consultant accountant do for independent consultants?
They set up practical systems for timesheets, expenses, and invoicing; manage bookkeeping and BAS/GST; handle payroll and super if you have staff; prepare tax returns and planning; and provide simple reports that show billable utilisation, WIP and profit by client or project.
Do consultants need to register for GST and charge GST on invoices?
Registration is generally required once your turnover reaches $75,000 per year. Most consulting services to Australian clients include 10% GST. Services to overseas clients can be GST-free if they are consumed outside Australia. Your accountant can confirm the right treatment and BAS cycle.
How do the ATO Personal Services Income (PSI) rules affect consultants?
PSI can apply when income mainly rewards your personal effort. If PSI applies, some deductions are limited and income may be taxed to the individual. Tests include the results test and the 80% rule with unrelated clients, employment and business premises tests. Get an assessment and set up compliant practices early.
Which structure suits consultants: sole trader, company or trust?
Sole trader is simple and quick. A company can separate risk and may suit growth or hiring. Trusts can be useful with tailored advice. The right choice depends on risk, income, PSI outcomes and future plans—do not restructure without advice.
Which software stack works best?
Xero, MYOB and QuickBooks Online are the main ledgers. Many consultants pair these with time/project tools such as Xero Projects, Harvest or Toggl to track WIP and billable hours cleanly. Choose a stack that produces reliable project profitability and easy BAS/TAX.
Can you help if I am behind on BAS, payroll or tax?
Yes. A consultant accountant can reconcile accounts, fix coding, clean payroll and super, lodge overdue BAS and tax, and move you to a consistent monthly rhythm so compliance stays on track.