What is agencies & consultancies?
Retainers vs projects, media pass-through kept out of revenue, and the contractor network’s compliance data captured as you go.
A marketing, creative, or dev agency in Australia sells the same time-and-judgment product as its US counterpart, with the same structural complication: media spend that moves through the agency’s account without being the agency’s own income. An agency invoicing a client $70,000 a month, of which $55,000 is Meta and Google ad spend being fronted or reconciled on the client’s behalf, distorts every downstream number — GST liability, gross margin, revenue per head — if that pass-through spend is booked as agency revenue rather than held as a client liability.
Billing splits the same way it does everywhere: retainer clients pay a flat monthly fee for ongoing services regardless of exact hours burned; project clients pay against milestones on a fixed-fee scope, with unbilled work-in-progress sitting on the books until a milestone is invoiced. A shop running both needs its ledger to keep the two apart, because a single undifferentiated 'services income' line hides which side of the business is actually carrying margin.
Who does what
| Your CapEasy team | Agencies & consultancies, the reconciliations and reporting behind it, and the questions list that keeps it honest. |
| Your registered BAS or tax agent | Everything that carries a licence in Australia — rendered exactly as written: work out what goes on your bas, or advise you on it — under tasa 2009 that requires registration we do not hold. |
| You | One conversation with one named person, and the decisions that are genuinely yours. |
Agencies & consultancies in Australia
Media pass-through spend is not agency income — AASB 15 agent-vs-principal
Whether an agency records media spend gross (as its own revenue, media cost booked as a corresponding expense) or net (only the agency’s fee or commission as revenue) is governed by AASB 15's agent-versus-principal guidance — does the agency control the ad inventory before it passes to the client, or is it simply arranging the purchase on the client’s behalf? Most media-buying arrangements sit on net/agent treatment, meaning only the markup or service fee is revenue, and the pass-through spend is neither revenue nor an expense of the agency. Which treatment applies to a specific client contract is the accountant’s judgment call; we book media spend to a pass-through liability account by default and flag any contract that reads like the agency carries principal risk on the media, so that call is made against the actual contract terms.
Retainer income recognition — over time vs on delivery, AASB 15
A flat monthly retainer for ongoing services generally recognises ratably over the retainer period as the performance obligation is satisfied over time; a fixed-fee project with a discrete deliverable more often recognises at a point in time or against a completion-percentage schedule, depending on how the engagement letter frames the obligation. Which recognition method applies to which engagement is the accountant’s determination under AASB 15's five-step model — we tag every retainer and project at intake so the recognition schedule is built off clean data rather than reconstructed from invoices after the fact.
Contractor payments and the Taxable Payments Annual Report (TPAR)
Agencies operating in the building & construction, cleaning, courier/road freight, information technology, or security & investigation industries must lodge a TPAR with the ATO by 28 August each year, itemising total payments made to each contractor (ABN, gross amount paid, GST) during the financial year. IT services is the category most creative and dev agencies fall into once they engage freelance developers as contractors. Preparing and lodging this report as a BAS/tax-agent service for a fee requires TPB registration under TASA 2009; we compile contractor payment data by ABN throughout the year so the TPAR pack is ready for your registered agent to lodge, rather than reconstructed under deadline pressure in August.
GST timing on multi-currency and pass-through client billing
GST generally becomes payable when an invoice is issued or payment is received, whichever comes first, and applies to the GST-inclusive value of the taxable supply — which for a net-basis media arrangement is the agency’s fee, not the full pass-through spend. Whether a particular multi-currency or pass-through billing structure triggers GST on the gross or net amount is a BAS position for your registered agent under TASA 2009; we track pass-through spend and fee income as distinct lines so that position is assessed against clean, separated figures.
What your registered BAS or tax agent receives from us
- Income booked net of pass-through media spend by default, with any contract reading as principal-risk flagged separately for the accountant to classify
- Retainer and project income tracked as distinct classes, each tagged to its own recognition treatment (ratable vs milestone/completion-percentage)
- A monthly retainer-utilisation report: deliverables or hours actually consumed against the flat fee, by client, so scope creep surfaces before it becomes a write-off decision
- Contractor payment data captured by ABN and GST status at the point of payment, staged for the 28 August TPAR deadline in the covered industries (including IT services)
- Multi-currency invoices booked at the invoice-date rate, with settlement FX gain/loss recorded as its own isolated line, not netted into GST-inclusive revenue
- Work-in-progress schedule for fixed-fee projects, aged against the date work was logged, distinct from the retainer-utilisation report
