6 Outsourced Bookkeeping Services for SMEs in Australia

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The best outsourced bookkeeping services for SMEs do more than process transactions. They deliver accurate monthly reports you can make decisions from, work alongside your existing finance team without creating friction, and give you direction – not just data. This guide evaluates six managed bookkeeping providers across five criteria that matter most to growing SME finance teams: reporting accuracy, finance team integration, industry specialisation, tech compatibility, and advisory depth.

Most listicles about outsourced bookkeeping services for SMEs rank providers by price or feature count. That’s the wrong lens. Price tells you what it costs. It doesn’t tell you whether your monthly reports will be accurate enough to inform a hiring decision, or whether your outsourced team will actually talk to your accountant without you playing middleman.

We’ve worked with hundreds of professional services firms. The pattern is consistent: the firms that get burned by outsourced bookkeeping didn’t choose the wrong provider because of price. They chose the wrong provider because they didn’t ask the right questions up front.

So we built this list around the questions that actually matter.

How We Evaluated These Outsourced Bookkeeping Services

Every provider on this list was assessed against five criteria. These aren’t arbitrary. They come from the problems we see most often when SME founders switch from one bookkeeping provider to another – the gaps that cause the most pain and cost the most time.

What We Looked For

Five criteria that separate good outsourced bookkeeping from expensive data entry

1
Monthly Reporting Accuracy
Does the provider deliver month-end reports that are accurate, timely, and structured for decisions – not just compliance?
2
Integration with In-House Finance Teams
Can they work alongside your existing accountant, finance lead, or CFO without creating coordination overhead?
3
Industry Specialisation
Do they understand the economics of your business model – project-based revenue, utilisation, gross margin by service line?
4
Tech Stack Compatibility
Do they work with your existing tools (Xero, MYOB, payroll systems, payment processors) or force a migration?
5
Advisory Depth
Do they go beyond compliance? Do they tell you what the numbers mean and what to do about them?
Most providers are strong on #4. The real differentiators are #1, #2, and #5.

A quick note on what we left out. We didn’t rank by price because pricing varies so much by scope, team size, and transaction volume that any comparison would be misleading. We also didn’t rank by number of features – more features doesn’t mean better outcomes. What matters is whether the provider can produce reporting you can act on and work with your team, not against it.

The 6 Best Outsourced Bookkeeping Services for SMEs

#1

Visory

Visory is a managed financial back-office and business performance platform built for professional services firms. Every client gets a dedicated three-person team: a Business Performance Partner (BPP) who runs strategy sessions and makes recommendations, a Quality Lead who oversees accuracy, and a Bookkeeper who handles day-to-day transaction coding, reconciliation, and month-end close.

What separates Visory from the rest of this list is the advisory layer. The Insights product delivers monthly financial reports written in plain English – not accounting jargon – along with strategy sessions and action plans with specific next steps. Your BPP doesn’t just tell you what happened last month. They explain why it happened and what to do about it.

On reporting accuracy: Visory’s proprietary AI (Delphi) powers the back-office automation, which means transaction coding, reconciliation, and month-end close happen faster and with fewer errors than a manual process. But the tech is the engine, not the product. You experience better reports and faster delivery. The how is handled for you.

On finance team integration: Visory is built to work alongside your existing accountant, CFO, or finance lead. The BPP becomes the bridge between your operational team and your financial data. One client told us their board reports finally made sense for the first time in three years after Visory restructured how data flowed between their internal team and the back-office.

Visory works with Xero and QuickBooks, and the bookkeeping service is a flat monthly fee. They operate in Australia, New Zealand, and the United States.

Best for: Professional services firms ($500K-$10M) that want financial direction and action plans – not just clean books. Especially strong for agencies, consulting firms, and architecture practices that need gross margin visibility by service line or client.
#2

Scale Suite

Scale Suite is an Australian embedded finance provider targeting businesses between $2M and $20M in revenue. Their model is a three-tier team – bookkeeper, senior accountant, and fractional CFO – delivered as a managed service with no lock-in contracts and a 30-day money-back guarantee.

They cover weekly bookkeeping, cashflow tracking, BAS compliance, budgeting, and fractional CFO support. The team includes Chartered Accountants, and they claim same-day responsiveness. Pricing runs between $1,500 and $6,000/month depending on scope, which they position as saving $50K-$70K compared to building the function internally.

Scale Suite’s strength is the bundled model at a mid-market price point. You get bookkeeping and CFO-level support from the same team, which reduces the coordination overhead of managing separate providers. They also offer HR services, which is unusual for a finance-first provider.

The trade-off: Scale Suite is a generalist provider. They serve a broad range of industries rather than specialising in any one vertical. If you need reporting structured around the specific economics of a professional services firm – utilisation, gross margin by project, revenue per employee – you’ll need to confirm that’s part of the standard output.

Best for: Australian SMEs ($2M-$20M) that want bookkeeping and fractional CFO support from a single team, with no lock-in commitment. Strong for businesses that have outgrown their solo bookkeeper but aren’t ready to build a full finance function.
#3

BDO Australia

BDO is one of the largest professional services networks globally, and their Australian practice offers full finance outsourcing alongside audit, tax, and advisory services. If you want a big-firm name behind your books, BDO is the most established option on this list.

Their outsourced finance offering covers bookkeeping, payroll, BAS and GST compliance, financial reporting, and tax advisory. The team structure is traditional – you’ll work with qualified accountants and support staff, backed by the broader BDO network for specialist needs like audit or international tax.

BDO’s strength is depth and credibility. If you’re preparing for an audit, seeking external investment, or dealing with complex compliance requirements, having a Big 5 adjacent firm handling your books carries weight. Their team understands Australian regulatory requirements inside and out.

The trade-off: BDO is built for scale and compliance, not speed and intimacy. Smaller SMEs can feel like a small fish in a big pond. The advisory layer tends to be more traditional – structured reporting rather than plain-English insights sessions. And pricing reflects the brand – expect to pay a premium compared to boutique providers.

Best for: Larger Australian SMEs that need audit-ready books, complex compliance (GST, BAS, superannuation), or the credibility of a major firm. Strong for businesses preparing for investment or acquisition where due diligence matters.
#4

Accounts NextGen

Accounts NextGen is an Australian firm with a 50+ person team across Melbourne, Sydney, Brisbane, Adelaide, Perth, and Geelong. They offer bookkeeping, tax returns, payroll, BAS lodgement, and SMSF management. Their model leans heavily on technology and automation to keep costs down and turnaround times fast.

They target small businesses, startups, and self-employed professionals. Their “TTS” model (Team, Technology, Strategy) emphasises the combination of qualified accountants, automation tools, and strategic advice. They claim 24/7 availability and rapid tax processing, which matters if you’ve been waiting weeks for responses from your current provider.

The strength is coverage and responsiveness. With offices across six cities and a large team, they can handle volume and offer local knowledge regardless of where you’re based in Australia. They work across Xero and other major platforms.

The trade-off: Accounts NextGen is primarily an accounting and tax firm that also does bookkeeping, rather than a bookkeeping-first provider. The advisory layer is more tax-focused than performance-focused. If you want someone to tell you which service lines are profitable and which clients are costing you money, that’s not the core offering.

Best for: Australian small businesses and sole traders that need bookkeeping bundled with tax and compliance. Strong for businesses that want local presence across multiple cities and fast turnaround on BAS and tax returns.
#5

iKeep Bookkeeping

iKeep is a boutique Australian bookkeeping firm led by founder Simon Allsop, a qualified accountant with over 20 years of experience. They operate from Sydney and Melbourne and offer bookkeeping, payroll, and outsourced accounts management across Xero, QuickBooks, and MYOB.

The differentiator is flexibility. Unlike providers that lock you into a single platform, iKeep works across all three major Australian accounting platforms. If you’re on MYOB and don’t want to migrate, or you’re running Xero and QuickBooks across different entities, they can handle both without forcing a change.

iKeep also offers financial coaching for founders who want to understand their numbers better – not just have someone else manage them. That’s a useful middle ground between pure bookkeeping and full advisory.

The trade-off: iKeep is a small team. That means personalised service, but also less capacity for complex or high-volume engagements. If you need a full outsourced accounting department with controller and CFO support, they’re likely too lean for that scope.

Best for: Australian startups and small businesses that want a hands-on, personalised bookkeeping service with platform flexibility. Good fit if you value working directly with a qualified accountant rather than being assigned to a junior team member.
#6

Outbooks

Outbooks offers outsourced bookkeeping, data entry, GST compliance, and payroll for Australian small businesses. Their model is built on efficiency and cost – they handle the routine transactional work so you don’t have to, at a price point that undercuts most local providers.

They focus on the fundamentals: bank reconciliation, accounts payable and receivable, BAS preparation, payroll processing, and financial reporting. No fractional CFO tier, no strategy sessions, no advisory layer. Just clean books delivered on time.

Outbooks’ strength is straightforward: they do basic bookkeeping well and they do it affordably. If your needs are simple – accurate transaction coding, timely BAS lodgement, clean reconciliation – and you don’t need strategic advice on top, they get the job done.

The trade-off is exactly what you’d expect. There’s no advisory depth. Monthly reporting is financial statements, not narrative insights. If you want someone to tell you what the numbers mean and what to change, you’ll need a separate adviser alongside Outbooks.

Best for: Cost-conscious Australian small businesses that need reliable, no-frills bookkeeping and BAS compliance. Good fit if you already have an accountant handling strategy and just need the transactional work done right.

What to Look for Before You Choose

Regardless of which provider you’re evaluating, ask these questions before you sign anything. The answers will tell you more about fit than any feature list or pricing page.

Ask These Before You Sign

The questions that separate a good fit from an expensive mistake

1
What does your month-end close process look like, and when will I have finalised reports?
2
Can I see a sample of the monthly reporting I’ll receive? Is it narrative or just numbers?
3
Will I have a named person who knows my business, or does my work get routed to a pool?
4
How do you work with my existing accountant or finance lead? Who owns what?
If a provider can’t answer #2 and #4 clearly, keep looking.

One more thing worth saying directly: most SMEs don’t have their financials structured correctly to begin with. Direct costs in the wrong buckets, revenue recognition that doesn’t match delivery, overhead mixed in with cost of service. If your gross profit margin looks unusually high or low, the issue might not be performance – it might be how your books are set up. A good outsourced provider should flag this during onboarding, not just code transactions into whatever chart of accounts you hand them.

The Financial Performance Check is a free way to get a read on where your numbers stand before you start evaluating providers.

Frequently Asked Questions

What is the best outsourced bookkeeping service for SMEs?

The best outsourced bookkeeping service for Australian SMEs depends on what you need beyond basic transaction processing. For professional services firms that want monthly reporting with strategic recommendations and action plans, Visory is the strongest option – it pairs managed bookkeeping with an advisory layer (Insights) that tells you what your numbers mean and what to do about them. For SMEs between $2M and $20M wanting bundled bookkeeping and fractional CFO support, Scale Suite offers a no-lock-in model. For businesses that need the credibility and compliance depth of a major firm, BDO Australia is the most established option. The right choice comes down to whether you need just clean books, or clean books plus direction.

How do outsourced bookkeeping services integrate with in-house finance teams?

The best managed bookkeeping providers assign a named contact – often a dedicated accountant or financial partner – who works directly with your existing finance lead, accountant, or CFO. They own the back-office (transaction coding, reconciliation, month-end close) while your internal team retains strategic oversight. The key questions to ask: Who on your side will my finance person communicate with? What’s the handoff process at month-end? Who handles discrepancies? Providers like Visory assign a Business Performance Partner specifically to bridge this gap, so your internal team gets clean data and strategic context without managing the bookkeeping process themselves.

What should accurate monthly financial reporting include?

At minimum: a profit and loss statement, balance sheet, and cash flow statement – delivered within 10-15 business days of month-end. But accuracy goes beyond getting the numbers right. Good monthly reporting includes a correctly structured chart of accounts (so your gross profit margin actually reflects delivery costs, not a mix of overhead and direct costs), narrative commentary on what changed and why, and recommendations on what to do next. If your monthly report is just a PDF of financial statements with no context, you’re getting compliance – not reporting you can make decisions from.

How much do outsourced bookkeeping services cost for SMEs?

Pricing varies widely based on transaction volume, complexity, and service scope. Basic bookkeeping for a small business typically starts around $500-$750/month. Managed bookkeeping with reporting and advisory (like Visory’s model) runs higher, but replaces the cost of a part-time or full-time hire. The comparison that matters isn’t “how much does the provider cost” but “what would it cost to get the same output in-house?” A full-time bookkeeper costs $55K-$75K/year in salary alone, before super, software, management overhead, and the risk of a single point of failure when they leave.

When should a growing SME outsource bookkeeping instead of hiring?

Three signals: you’re spending more than 5 hours per week on financial admin yourself, your monthly close takes longer than 15 business days, or you’ve had a bookkeeper leave and realised nobody else can do the work. Outsourcing makes sense when you need consistent quality without the management overhead of building an internal finance function. It’s especially strong for growing SME finance teams that need to scale financial operations without committing to a full-time hire at each stage of growth. A managed provider gives you a team – not a person – so you’re not exposed when someone takes leave or moves on.

Reporting you can actually act on.

If you’re a professional services firm that wants monthly reports with direction – not just numbers – book a free discovery call. We’ll walk through your current reporting and show you what’s possible.

Book a Free Discovery Call →

You Don’t Have a Revenue Problem. You Have a Margin Problem.

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A $2.6M creative agency came to us with a familiar story. Revenue was solid. The team was busy. Clients were paying on time. And the founder couldn’t figure out why there was never any money left.

Their instinct was the same one most agency founders have: sell more. Win more clients. Push the top line higher and the cash flow problem will sort itself out. Twelve months later, their revenue was virtually unchanged – it actually dropped by $16K. Their net profit went up by $325,000.

Gross profit margin (GPM) measures the percentage of revenue remaining after subtracting the direct costs of delivering your services – billable salaries, contractor fees, delivery software, and pass-through costs like media spend, printing, and subcontracted production. For professional services firms between $1M and $10M, a healthy GPM typically falls between 50% and 70%. Most agencies we work with are well below that when we first see their real numbers.

This post is about why chasing revenue is often the wrong move, why the answer is usually hiding in the middle of your P&L, and what it actually looks like to fix it.

The Revenue Reflex

When cash gets tight, the instinct is always the same. Sell more. Book more calls. Launch a new service. Hire another salesperson. Push the top line up and everything else will follow.

It feels logical. More money coming in should mean more money left over.

The problem is that if your gross profit margin is below 40%, every new client you win barely covers their own delivery cost. You’re adding complexity, team stress, and operational overhead for almost no profit contribution.

Run the numbers. At 35% GPM, a $10K/month client generates $3,500 in gross profit. After that client’s share of overhead – rent, software, admin, the time you spend managing the account – you might keep $500. Maybe nothing. Maybe you lose money on them entirely.

And you won’t know which one it is because most agency financial setups don’t show you margin at the client or service level. You just see revenue going up and wonder why it doesn’t feel like it.

According to Planable’s 2026 Agency Profitability Report, 21.5% of agencies are actively losing money. Not breaking even. Losing money. Many of them have healthy-looking revenue numbers. The revenue isn’t the problem.

Why Revenue Growth Makes Bad Margins Worse

Growth without margin discipline creates weight, not momentum.

Each new client at sub-40% GPM requires more delivery headcount. More headcount raises your cost base. A higher cost base means you need even more revenue to cover the new costs. You’re on a treadmill, running faster to stay in the same spot.

This is the “busy but broke” pattern. The team is slammed. Clients are happy. Revenue is up 20% year over year. And the founder is still checking the bank balance every morning wondering if payroll is going to clear.

Here’s why the maths works against you.

Two Paths for a $2M Agency

What happens when you chase revenue vs. fix margins

Path A: Chase Revenue
Add $500K in new revenue at current margins
New revenue+$500K
GPM (unchanged)35%
Gross profit added$175K
New hires to deliver2 people
Loaded hiring cost-$160K
Net Gain
$15K
Plus added complexity and management overhead
Path B: Fix Margins
Improve GPM from 35% to 50% on existing revenue
Revenue change$0
GPM improvement35% → 50%
Old gross profit$700K
New gross profit$1,000K
Additional headcountNone
Net Gain
$300K
No new clients, no new hires, no new complexity
20x more profit from fixing margins than from chasing revenue.

There’s a term for this that fits perfectly: indigestion that agencies mistake for starvation. There’s plenty of revenue coming in, but the business can’t convert it into profit. The instinct is to sell more. But selling more is actually making things worse.

The maths is clear. But most founders never see it this way because their books aren’t set up to show them.

Where the Margin Is Actually Hiding

Most agency founders don’t know their real GPM. That’s not a criticism – it’s a structural problem.

Here’s what typically happens. Your bookkeeper or accountant sets up your chart of accounts using a generic template. Employee salaries go into one bucket. Software goes into another. Contractors might land in cost of goods sold or might land in operating expenses depending on who set it up. There’s no separation between the people who deliver client work and the people who run the business. Everything is blended.

The result: your reported GPM is fiction. It might be too high (because delivery costs are sitting in overhead) or too low (because overhead is mixed into direct costs). Either way, you can’t trust it. And you definitely can’t see it by client or service line.

When you restructure the chart of accounts to properly separate direct delivery costs from operating expenses, the real GPM is almost always different from what the founder expected. Sometimes dramatically.

One agency we worked with – a 5-person wedding venue marketing company – had GPM swinging between 22% and 73% month to month. Not because their business was wildly inconsistent, but because their books couldn’t distinguish between what it cost to deliver the work and what it cost to run the business.

This is actually good news. If the problem is structural – how the books are organised – it’s fixable. You don’t need to overhaul your delivery model or fire half your team. You need your financials to tell you the truth so you can make decisions based on what’s actually happening.

Here’s where healthy GPM sits for professional services firms at different stages. These numbers reflect patterns across hundreds of agencies. Your numbers may look different depending on your business model, service mix, and operational structure – use these as directional guideposts, not rigid rules.

GPM Ranges for Professional Services Firms

Gross Profit Margin interpretation by performance band

<40%
Struggling
Likely over-servicing, underpricing, or carrying high contractor costs. Not sustainable long-term without intervention.
40-50%
Average
Workable if overhead is lean, but leaves little room for error, slow months, or investment in growth.
50-60%
Great
Healthy balance between delivery efficiency and service quality. Room to invest, hire, and weather downturns.
60-70%
Strong
Shows pricing power and resource discipline. Typically seen in specialized agencies with strong value-based pricing.
Note: These benchmarks assume your financials are set up correctly. Most agencies we work with do not have this right when we first meet them.

One important note: these benchmarks assume your financials are set up correctly – direct costs in the right buckets, revenue recognised properly, and overhead separated from cost of delivery. Most agencies we work with do not have this right when we first meet them. If your GPM looks unusually high or low, the issue may not be performance – it may be how your books are structured.

How to See Your Margins (Even Without Perfect Data)

You don’t need a perfect financial setup to start getting visibility into your margins. You need a rough picture that’s directionally correct. Perfection comes later. The muscle of actually looking at this is what matters first.

Here’s a practical way to start, even if your books aren’t clean yet.

Step 1: Identify your direct delivery costs.

The simplest rule of thumb: would this cost exist if you had zero clients to manage? If the answer is no, it’s a direct delivery cost. If the answer is yes, it’s overhead. Pull out everyone who delivers client work – designers, developers, account managers, strategists, project managers. Their salaries (or the billable portion) are direct costs. If you had no clients, you wouldn’t need them. That’s how you know. If someone splits their time – say 70% client work and 30% business development – estimate the split. A rough number that’s close is infinitely more useful than no number at all.

Step 2: Add contractor and freelancer costs.

Every dollar you pay contractors or freelancers for client delivery work is a direct cost. This one is usually straightforward – pull it from your accounting software.

Step 3: Add delivery-specific software.

Design tools, project management platforms, stock media subscriptions, hosting costs for client work. Same rule of thumb: if you had no clients, would you still pay for this tool? If no, it’s a direct cost. If a tool is used for both delivery and operations (like Slack), either split it roughly or leave it in overhead. Don’t overthink this.

Step 4: Add pass-through and hard costs.

Ad spend you manage for clients, printing, postage, stock assets purchased for specific projects, subcontracted production work – any hard cost tied directly to delivering a client engagement. These are often already tracked as separate line items in your accounting software, so this step is usually straightforward.

Step 5: Calculate your overall GPM.

Take your total revenue, subtract the direct costs from steps 1-4, and divide by revenue. That’s your GPM. It won’t be perfect, but it’ll be a real number based on your actual business.

Step 6: Break it down by service line or client type.

Take your billable team members and estimate roughly how their time splits across your major service lines or client types. Apply the same logic to contractors, delivery software, and pass-throughs. You’ll end up with a rough revenue-minus-direct-cost calculation for each line. Some will look great. Some will look terrible. That’s the point.

This exercise takes a few hours the first time. It’s not perfect, and you’ll refine it as you get better data. But the agencies that start measuring this – even roughly – make fundamentally different decisions than the ones that don’t. You stop guessing which work is worth doing and start knowing.

The $325K Transformation: What Actually Happened

Here’s the full story of the $2.6M agency from the introduction, because the details matter.

When we started working with them, the founder was stuck. Revenue looked fine. But the financial reporting was inaccurate enough that every decision felt like a coin flip. There was no visibility into which clients were profitable, which service lines were carrying the business, or where costs were leaking. The instinct was to sell harder. The data said something different.

Month 1-2: Get the picture right.

First step was rebuilding the bookkeeping and restructuring the chart of accounts so GPM was visible by client for the first time. This phase didn’t change any financial outcomes. It just changed what the founder could see. And what they saw was uncomfortable – a significant segment of their client base was unprofitable. Some of their busiest accounts were their worst performers.

This is the moment that matters. Not the day you cut costs or raise prices. The day you see the real picture for the first time. Every decision after that gets easier because you’re working with real information instead of assumptions.

Month 3-6: The managed transition.

This is the part that most content about “firing bad clients” gets wrong. Nobody woke up one morning and emailed half the client list to say the relationship was over. It was a deliberate, phased strategy that played out over months.

First, they ranked every client by margin. The bottom tier got examined closely. Why were they unprofitable? Underpriced from the original proposal? Scope creep that was never addressed? Heavy contractor dependency eating into margins? Wrong service mix? The answer was different for each client.

For some, the answer was repricing. They had the conversation backed by data for the first time: here’s what this engagement actually costs us to deliver, here’s what we need to charge for it to work for both of us. Some clients accepted. That alone improved margins on those accounts.

For clients where repricing wasn’t viable – the work was inherently low-margin or the relationship wasn’t a fit – they transitioned them out gradually. Gave notice. Helped them find alternatives. Used the freed capacity to serve remaining clients better.

At the same time, they expanded services for their highest-margin clients. Added complementary work to accounts that were already profitable and already trusted them. This generated 5.5% revenue growth at minimal acquisition cost – no sales cycle, no onboarding friction, just deeper relationships with clients who were already happy.

The net effect: revenue dropped by $16K (essentially flat), but gross profit increased by $356K because the remaining client base was dramatically more profitable.

Month 6-12: Tighten the operation.

With the client base cleaned up, two more levers got pulled. A zero-based budgeting exercise – reviewing every single expense from the ground up, justifying each one from scratch – cut $30K in costs nobody missed. And a team alignment process led to three departures that reduced cost of sales and supported a GPM uplift to approximately 51%.

The result: $325K in additional net profit. Same revenue. Fewer clients. Leaner team. More money. To see how this process works from day one, here’s an overview of how Visory’s partnership model operates in practice.

The Maths That Changes Everything

Here’s why this matters at every scale.

$3M revenue. 60% GPM. 30% overhead. That’s 30% net profit margin – $900K.

Same $3M revenue. Drop GPM to 50%. Let overhead creep to 35%. That’s 15% net profit margin – $450K.

That’s a $450K difference. The revenue line is identical in both scenarios. What the founder takes home is cut in half.

Now flip it the other direction. If you’re sitting at 50% GPM and you can move to 55%, that’s $150K in additional gross profit on $3M revenue. No new clients needed.

Every 5 percentage points of GPM improvement on a $3M agency is worth $150K. On a $5M agency, it’s $250K.

This is why GPM is the single most important metric for a professional services firm. Not revenue. Not even net profit (which is an output, not a lever). Gross profit margin is where the operational decisions you make every month show up in dollars.

What to Do Monday Morning

Find your real GPM. Use the process from the earlier section. Pull your P&L, separate direct delivery costs from overhead, and calculate the number. If you can’t do this cleanly with your current chart of accounts, that’s your answer – the first fix is restructuring your books so the number is visible.

Run a rough client margin audit. Estimate how your billable team’s time splits across your major clients or service lines. Apply the direct costs. Which clients generate the most revenue? Which ones consume the most team time? The gap between “highest revenue” and “most time-intensive” is usually where your worst margins live. You don’t need a time-tracking tool to start. An honest estimate from your delivery leads gets you 80% of the way there.

Question the revenue reflex. Before you invest in lead gen, ads, or another sales hire, run this calculation: would you rather add $500K in new revenue at your current margins, or improve your margins by 10 points on your existing revenue? If 10 points of GPM improvement on your current revenue produces more profit than $500K in new revenue at your current margins – and for most agencies under $5M, it will – that changes your entire growth strategy.

The agencies that break out of the “busy but broke” cycle aren’t the ones that sell the hardest. They’re the ones that understand what’s happening between revenue and net profit and have the discipline to fix it before they grow. If you’re ready for the tactical playbook on exactly how to move these numbers, we break down the 5 specific levers that improve agency profitability step by step.

Revenue is the number everyone asks about at industry events. What’s your run rate? How much did you grow this year? It’s the number that sounds impressive and the number your team celebrates when it ticks up.

But it’s not the number that determines whether you can pay yourself properly, invest in your best people, or build a business that actually works for you. That number lives in the middle of your P&L. And most professional services founders have never had someone sit down with them and show them what it actually says.

If you’re running a firm between $1M and $10M and you’ve never seen your true GPM by service line – that’s where this starts. Not with more sales. Not with more clients. With seeing the real picture for the first time.

Frequently Asked Questions

What is a good gross profit margin for an agency?

For professional services firms, a healthy GPM typically falls between 50% and 70% depending on your size and service mix. Below 40% is a warning sign – it usually means underpricing, over-servicing, or heavy contractor dependency. Between 40-50% is average and workable if overhead is lean. Above 50% gives you real room to invest, hire confidently, and weather slow months. For a deeper breakdown by revenue tier, the Financial Performance Check covers the key financial metrics for firms between $500K and $10M.

How do I calculate GPM for my agency?

GPM = (Revenue – Direct Costs) / Revenue. Direct costs are everything that goes into delivering client work: billable employee salaries (or the billable portion of split roles), contractor and freelancer fees, delivery-specific software, and pass-through costs like media spend, printing, and subcontracted production. The test for whether something is a direct cost: would this expense exist if you had zero clients? If no, it’s a direct cost. If yes, it’s overhead. Most agencies get this wrong because their chart of accounts wasn’t designed to separate delivery costs from operating expenses.

Can I improve profitability without growing revenue?

Yes, and the maths often favors it. A $2M agency that improves GPM from 35% to 50% adds $300K in gross profit with no new clients, no new hires, and no additional operational complexity. The same agency adding $500K in new revenue at 35% GPM gains roughly $15K after accounting for the delivery headcount needed to service that revenue. The levers include repricing undervalued services, transitioning unprofitable clients over time, reducing contractor dependency, cutting non-essential overhead through zero-based budgeting, and improving team utilisation.

What’s the difference between gross profit margin and net profit margin?

GPM measures what’s left after the direct costs of delivering your services. Net profit margin is what’s left after everything – delivery costs plus overhead (rent, admin salaries, software, marketing, insurance). The relationship is roughly: Net Profit Margin = GPM minus your Overhead-to-Revenue ratio. For a $3M agency, a 10-point swing in GPM translates to $300K in the founder’s pocket.

How long does it take to improve agency margins?

A meaningful margin transformation typically plays out over 6-12 months. Months 1-2 focus on financial clarity – restructuring your chart of accounts so you can see GPM by client or service line. Months 3-6 involve the managed transition: repricing where possible, gradually offboarding unprofitable work, expanding services with high-margin clients. Months 6-12 focus on operational tightening – zero-based budgeting, team alignment, and building the reporting cadence that keeps margins improving. The agency in our case study added $325K in net profit over 12 months following this sequence.

See the real picture for the first time.

If you’re running a professional services firm between $1M and $10M and you’ve never seen your true GPM by service line – that’s where this starts. Book a free discovery call and we’ll walk through your numbers together.

Book a Free Discovery Call →

How to Improve Agency Profitability: 5 Levers That Actually Move the Numbers

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There are only two ways to improve your agency’s profitability. Increase your gross profit margin or reduce your overhead. That’s it. Everything else – pricing, utilisation, scope control, team structure, expense management – is a sub-lever of one of those two.

Agency profitability comes down to a simple equation: Net Profit Margin = Gross Profit Margin minus your Overhead-to-Revenue ratio. For professional services firms between $1M and $10M, healthy GPM sits between 50% and 70%, and overhead should stay below 25-30% of revenue. Most agencies we work with aren’t hitting either number when we first look at their real financials.

Most advice on this topic gives you a list of 10 or 11 strategies and leaves you to figure out which ones matter. This post does the opposite. Five levers, ranked by dollar impact, with the maths at every step so you can see exactly what each one is worth at your revenue scale.

The Profitability Equation

Before getting into the levers, you need to understand the equation they’re all pulling on.

Net Profit = Revenue minus Direct Costs minus Overhead. Break that into ratios and you get: Net Profit Margin = GPM minus Overhead-to-Revenue ratio.

The Profitability Equation at $3M Revenue

Same revenue. Two very different outcomes.

Healthy Agency
Strong margins, lean overhead
Revenue$3,000,000
GPM55%
Gross Profit$1,650,000
Overhead (% of rev)25%
Overhead $$750,000
Net Profit
$900K
30% net profit margin
Struggling Agency
Weak margins, creeping overhead
Revenue$3,000,000
GPM45%
Gross Profit$1,350,000
Overhead (% of rev)30%
Overhead $$900,000
Net Profit
$450K
15% net profit margin
$450K difference on the same $3M in revenue.

Every lever in this post pulls on one of those two numbers. The first three improve GPM. The fourth reduces overhead. The fifth keeps it all visible so improvements stick.

If you want to understand why revenue growth alone won’t fix profitability – we covered that in depth separately. This post is about what to actually do about it.

Lever 1: Get Financial Visibility

You can’t improve what you can’t see. Before touching pricing, team structure, or overhead, your books need to show you real GPM – and ideally GPM by service line or client type.

Think of it like going to a doctor and saying “I don’t feel great, fix me” but not being able to tell them where it hurts, when it started, or what makes it worse. They might order every test available and eventually figure it out. But you’d never bet your health on that approach. Your agency’s finances work the same way. Without clear data on what’s costing you money and where, any improvement plan is guesswork.

Most agencies don’t have this. Their chart of accounts was set up using a generic template where employee salaries, contractors, and software all sit in broad buckets with no separation between the cost of delivering client work and the cost of running the business.

The fix starts with one question: would this cost exist if you had zero clients?

If the answer is no, it’s a direct delivery cost. This includes four categories: billable staff salaries (or the billable portion if they split time), contractor and freelancer fees, delivery-specific software (design tools, PM platforms, hosting), and pass-through or hard costs tied to specific client work (media spend you manage, printing, stock assets, subcontracted production). If you had no clients, none of these would exist.

If the answer is yes – rent, admin staff, your accounting software, the founder’s salary – it’s overhead.

Separate those two buckets in your financials and you can calculate GPM. Then break it down further: estimate how your billable team’s time splits across service lines or major clients. Apply their cost proportionally. You’ll get a rough margin picture for each area of the business.

This exercise takes a few hours the first time. It won’t be perfect. It doesn’t need to be. A rough number that’s directionally correct is infinitely more useful than a precise number that’s wrong because your books blend everything together.

We’ve seen agencies with GPM swinging 22% one month and 73% the next – not because the business was inconsistent, but because the books couldn’t distinguish between delivery costs and overhead. Once the chart of accounts was restructured, the real GPM stabilized and every decision that followed was grounded in actual data.

Lever 2: Improve Your Gross Profit Margin

This is the biggest lever. A 5-point improvement in GPM on a $3M agency is worth $150K. On a $5M agency, $250K. No new clients needed.

There are four ways to move it.

Reprice with data, not gut feel.

Once you have GPM by service line, you can see which services are underpriced relative to what they cost to deliver. The conversation with clients shifts from “we feel like we should charge more” to “here’s what this engagement costs us to deliver, here’s what we need for it to work for both of us.”

We’ve seen agencies double their rate for new clients – from $1,997/mo to $3,997/mo – after running this analysis for the first time. They weren’t being greedy. Their onboarding costs were simply invisible until the data showed up. The pricing conversation becomes easy when you have the numbers behind it.

Run a pricing review at least annually. Compare your rates against your actual delivery costs, not against what competitors charge. Your cost structure is yours – price from it.

Manage your client mix deliberately.

Rank your clients by margin. The bottom tier is where your GPM is being dragged down. But don’t just look at the number – diagnose why each one is unprofitable. Underpriced from the original proposal? Scope creep that was never addressed? Heavy contractor dependency? Wrong service mix?

For some, the answer is repricing. For others, it’s tightening scope. For the rest, it’s a managed transition out – give notice, help them find alternatives, use the freed capacity to expand services with your highest-margin clients.

This is a phased process that plays out over months, not a single decision. You’re replacing low-quality revenue with higher-quality revenue. The math often surprises founders – gross profit can increase by hundreds of thousands of dollars while revenue stays flat, because the remaining client base is dramatically more profitable than the old mix.

Control scope and reduce delivery waste.

Scope creep is the most common margin killer and it’s almost always invisible until you measure it. Industry data suggests scope creep erodes margins by 5-15% on average.

Standardize your delivery processes. Create SOPs and templates for each service type so every project doesn’t start from scratch. When your team reinvents the workflow on every engagement, you’re paying for that reinvention in margin.

Introduce project management software that tracks time against scope. If you can’t see when a project goes over budget in real time, you’ll only find out when the invoice doesn’t cover the hours.

Audit your workflows for double handling – steps where information is entered twice, approvals loop through people who don’t need to be involved, or handoffs create rework. Every redundant step is a direct cost that doesn’t produce value.

Use AI to accelerate delivery. Content drafting, research, data analysis, reporting, proposal generation – AI doesn’t replace your team, but it can give them back 20-30% of their time on tasks that used to be manual. That time either converts to more billable hours at the same headcount or fewer hours needed per project. Both improve GPM directly.

Enforce change orders as a standard practice. “That’s outside the original scope, but we’d be happy to take it on for $X” should be a normal sentence at your agency, not a confrontation. The agencies that treat out-of-scope requests as a billing event rather than a favour protect their margins consistently.

Improve utilisation without burning people out.

Utilisation measures what percentage of your team’s available hours go to billable client work. Target 75-85% for delivery team members. Below 70% means you’re paying for capacity that isn’t producing revenue. Above 90% means you’re heading toward burnout and turnover, which is its own margin problem.

Better resource planning is the first step – match team capacity to project demand before overloading your best people while others sit idle. Most utilisation problems aren’t about the team being lazy. They’re about uneven distribution.

Reduce non-billable time by automating internal admin, status updates, and reporting. Every hour your designer spends filling out a timesheet or sitting in an internal meeting that could have been a Slack message is an hour they’re not billing.

Track utilisation by individual, not just team average. A blended 72% can hide one person at 95% (burnout risk) and another at 50% (underutilized). Seeing utilisation alongside margin data is what turns this from a vague goal into a specific action plan.

Lever 3: Align Your Team to Profit Outcomes

This is the lever most agencies skip. And it’s the reason margin improvements don’t stick.

Most agencies measure output: projects delivered, hours billed, clients managed. Very few measure profitability at the team or individual level. The result is that scope control, pricing discipline, and utilisation management all fall on the founder’s shoulders. That doesn’t scale.

The shift is from “how much did we bill?” to “how profitably did we bill?”

Give team leads financial visibility. Build department-level or service-line P&Ls so team leads can see the margin on their work. When a delivery lead can see that their division runs at 58% GPM while another runs at 42%, they start asking the right questions without being told to.

Tie incentives to margin, not just revenue. When a project manager’s bonus is connected to delivery margin, scope control becomes their job, not just yours. Revenue-based incentives reward volume. Margin-based incentives reward quality.

Set hire-when rules linked to financial thresholds. Don’t hire because you’re busy. Hire when revenue per employee exceeds a threshold, utilisation is sustainably above 80%, and GPM supports the additional headcount. Being busy at 35% GPM means you’re hiring to do more unprofitable work.

Performance manage with financial metrics. Map your team on two axes: performance and growth potential. Your high performers generating high-margin work are the people you invest in and fight to retain. Underperformers on low-margin accounts are where your cost of delivery is leaking. This isn’t about being ruthless – it’s about being honest. The agencies that manage performance against profitability data build teams where everyone earns more because the business can afford it.

This lever takes the longest to implement – 6 to 12 months to fully embed. But it’s what separates the agencies that fix profitability once from the ones that keep it fixed.

Lever 4: Tighten Your Overhead

Overhead should be 20-30% of revenue. Above 30% means you’re spending too much on things that don’t deliver client work. The good news: overhead is the lever you have the most direct control over.

Zero-based budgeting. Every quarter – or at minimum every 6 months – review every single expense from zero. Don’t compare to last quarter and add 10%. Start from scratch and justify each line item. Ask: would we sign up for this tool today? Is this subscription being used by more than half the team? Is this vendor relationship still competitive? We routinely see agencies find $20-40K in annual expenses nobody would notice were gone. Software subscriptions, unused tools, auto-renewed contracts that haven’t been evaluated in years.

Expense forecasting. Forecast your expenses quarterly and overlay them against your revenue trajectory. If expenses are growing faster than revenue, you have a problem before it shows up in cash flow. Most agencies catch expense creep reactively – after a bad month. Forecasting catches it proactively.

Outsource non-billable work. Bookkeeping, payroll, HR administration, IT support – these are necessary but they don’t generate revenue. Every dollar you spend on internal headcount for non-billable functions is overhead. An outsourced solution often costs less than a full-time hire and frees your management bandwidth for the work that actually drives margin. Here’s an overview of how that works in practice.

Renegotiate vendor contracts. Payment processing, cloud hosting, design tools – most agencies are on default pricing. Enterprise rates exist. Volume discounts exist. If you haven’t asked in the last 12 months, you’re probably overpaying.

Lever 5: Build the Reporting Cadence

Fixing profitability once is straightforward. Keeping it fixed is the hard part. That requires a rhythm, not a one-time project.

It’s the same principle as getting in shape. Nobody’s goal is to get fit once. The goal is to stay fit. And that means stepping on the scale regularly, matching what the mirror tells you with what the numbers say, and adjusting when things start to drift. Skip the weigh-in for a few months and you don’t notice the change until your clothes don’t fit. Skip your financial review for a few months and you don’t notice the margin erosion until cash flow tightens.

Monthly: Review GPM by service line. Flag anything below 40%. Review utilisation by team member. Surface any clients where hours are consistently over scope.

Quarterly: Run a zero-based budget review. Run a client margin audit – which clients moved up, which moved down? Assess team performance against financial metrics. Forecast expenses for the next quarter.

Annually: Full pricing review across all services. Client portfolio review – are you still serving the right mix? Overhead benchmark against the 20-30% of revenue target.

The agencies that maintain healthy margins aren’t the ones that did the best one-time fix. They’re the ones that look at these numbers on a regular cadence and course-correct before problems compound. Start with a monthly GPM review even if it’s just you and a spreadsheet. The discipline matters more than the tool.

What to Do This Week

Calculate your GPM. Use the “would this cost exist with zero clients” test. Separate direct delivery costs from overhead in your P&L. Divide gross profit by revenue. One afternoon.

Identify your top 3 and bottom 3 clients by margin. You probably already have a gut sense of who they are. Write it down. Look at why the bottom 3 are there.

Cancel one expense you’ve been paying for on autopilot. That tool nobody uses. That subscription from 2023 that auto-renewed. That vendor you’ve been meaning to renegotiate. Start with one. The maths compounds.

These are small moves. The kind you can make without a strategy offsite or a consulting engagement. The Financial Performance Check has benchmark guidance by revenue tier if you want to see where your numbers sit relative to the industry.

The 5 Levers, Ranked by Impact

Estimated dollar impact at $3M agency revenue

1
Get Financial Visibility
Restructure books to see real GPM by service line
GPM
Prerequisite
2
Improve Gross Profit Margin
Reprice, manage client mix, control scope, improve utilisation
GPM
$150-300K
3
Align Team to Profit Outcomes
Department P&Ls, margin incentives, hire-when rules
GPM
Sustains gains
4
Tighten Overhead
Zero-based budgeting, expense forecasting, outsource non-billable
Overhead
$20-50K
5
Build the Reporting Cadence
Monthly GPM review, quarterly ZBB, annual pricing audit
Both
Prevents drift
80% of the improvement comes from Levers 1 and 2. Start there.

Agency profitability isn’t complicated maths. It’s two numbers – your gross profit margin and your overhead ratio – and the discipline to watch them consistently. The five levers above are ranked by impact, but most agencies will get 80% of the improvement from the first two: getting financial visibility and improving GPM. Start there. The rest follows.

If you’ve never seen your true GPM by service line and you want someone to walk through the numbers with you, that’s a conversation worth having.

Frequently Asked Questions

What is a good profit margin for an agency?

Healthy gross profit margin for professional services firms typically falls between 50% and 70%, depending on size and service mix. Net profit margin should be 15-25% for a well-run agency. Below 10% NPM means you’re either underpricing, overspending on overhead, or both. Specialized agencies consistently outperform generalists, with some reaching 25-40% net margins. The Financial Performance Check has benchmark guidance for firms between $500K and $10M.

How do I calculate gross profit margin for my agency?

GPM = (Revenue – Direct Costs) / Revenue. Direct costs include billable staff salaries, contractor fees, delivery-specific software, and pass-through costs tied to client work – anything that wouldn’t exist if you had zero clients. The most common mistake is leaving direct costs mixed into overhead, which makes reported GPM unreliable. Separate the two buckets first, then calculate.

What’s the fastest way to improve agency profitability?

Getting financial visibility – restructuring your chart of accounts to see real GPM – is the fastest first step because everything else depends on it. After that, repricing undervalued services using actual margin data typically produces the quickest dollar impact. We’ve seen agencies double their rate for new clients once they could see the true cost to deliver. The hardest but most durable improvement comes from aligning your team to profit outcomes through margin-based incentives and department-level P&Ls.

How much should agencies spend on overhead?

Overhead should be 20-30% of revenue. This includes rent, admin salaries, non-delivery software, marketing, insurance, and any other cost that exists whether or not you have clients. Above 30% typically means expense creep has gone unchecked. Zero-based budgeting – reviewing every expense from scratch each quarter rather than comparing to last quarter – is the most effective way to keep overhead in range.

How often should I review my agency’s profitability metrics?

Monthly at minimum for GPM and utilisation. Quarterly for overhead (zero-based budget review), client margin audits, and expense forecasting. Annually for full pricing reviews and client portfolio assessment. The rhythm matters more than perfection – agencies that review monthly and course-correct catch problems before they compound into cash flow crises.

See where the biggest opportunities are in your business.

If you’ve never seen your true GPM by service line and you want someone to walk through the numbers with you, that’s a conversation worth having. Book a free discovery call and we’ll show you exactly where the levers are.

Book a Free Discovery Call →

Visory Insights: Clarity Beyond the Numbers 

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Built for businesses that want to grow with confidence. 

Visory Insights was born out of what we saw every day from years of working with growing businesses. Most businesses were paying for detailed reports accompanied by financial jargon, but few were able to easily interpret them. 

Some had clean books while others had fancy dashboards. But what they lacked was clarity about what was working, what wasn’t, and most importantly, what to do next. 

 

So, we built the solution in-house. Insights is the brainchild of one of our co-founders, Jordan Bevans and with the support of our talented product team and financial specialists, we created Visory Insights: a powerful reporting and business strategy tool that gives businesses the full financial picture, with the support of a dedicated Business Performance team.  

With so many moving parts in a business, from sales to staffing and operations, it can be difficult to keep track of every key metric in your business.  Often, this results in focussing on two to three of the most important ones at a time.  

So rather than inundating our clients with more fluffy commentary, we focus on cutting through to the most important levers a business can pull to achieve its goals. 

 

What is Visory Insights? 

Visory Insights is a business performance tool built directly into the Visory platform.
It takes clean, up-to-date bookkeeping data, combines this with business context you share with us over time, and turns it into a clear strategy, with easy-to-follow, actionable steps.  

Each month or quarter, depending on your plan, you’ll receive an Insights performance report that highlights key trends, risks, and opportunities across your business. You’ll also have access to 1:1 strategic sessions with your Business Performance Partner, who helps you break down your performance and decide what to do next. It’s like having the clarity of a CFO, without the complex financial models, or the price tag.  

 

Sample Insights and action items

 

Why It Works 

Because it’s built on your Visory bookkeeping data, everything is accurate, timely, and easy to action. We already know how your business runs, so we can provide insights that are relevant, not generic. 

Visory Insights lives inside our platform, storing your reports, actions, and results in one place. As the product evolves, it will continue to learn from the context you share about your business and financials and compare your business evolution to trends in your industry, therefore helping you improve faster.
 

Why Choose Visory Insights? 

If you’re a growing service business that wants to stop reacting and start making more profit through actionable steps, Insights is made for you. 

Boost Profitability 

We uncover pricing gaps, unprofitable services, and underperforming areas so you can take action and grow profit without all the hassle. 

Free Up Time 

We strip away the complexity of financial reporting. You’ll get the insights you need, fast and with clear next steps. 

See the Full Picture 

From gross profit margins to project-level reporting, Insights gives you financial visibility that’s easy to understand and allows you spot problems early and make data-backed decisions. 

Make Progress Toward Your Goals 

We align your financials to your strategic goals, so you’re not just tracking numbers, you’re building a sustainable business. 

 

Ready to increase your profits? 

Visory Insights is now available. If you’re ready to stop guessing and start making smarter financial decisions, we’d love to show you how it works. 

Talk to our team Book a Demo

Can You Claim Tax Deductions Without Receipts?

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If you’re wondering what you can claim on tax without receipts, this guide may help. In Australia, taxpayers can claim a deduction for many out-of-pocket expenses incurred while earning their income. These include work-related travel expenses, clothing and equipment costs, union fees, and other professional expenses.

However, the Australian Taxation Office (ATO) requires taxpayers to have a valid record or receipt to claim a deduction. This is to ensure that taxpayers are only claiming deductions for legitimate expenses. But what happens if you are missing receipts? Can you still claim tax deductions without a receipt?

In this article, we’ll look at what the ATO says about tax deductions without receipts. We’ll also outline which items you can claim without receipts and how you should ensure you are following ATO guidelines.

Australian Taxation Office rules for claiming tax deductions

Any expenses you claim on your taxes must meet three primary requirements: 

  • It must be necessary for you to earn your income.
  • You must have been the one who purchased it. Also, it can’t be an expense a company reimbursed you for. 
  • You must prove you purchased it with a record or receipt. 

If you meet the first two requirements, then all you need are the receipts. The ATO is clear on its stance when it comes to claiming tax deductions without receipts. According to the ATO website, “You must have a record of your expenses to show how you calculated your claims.” If you don’t have a valid receipt, you won’t be able to claim the deduction. However, there are some exceptions to this rule. 

What can you claim without receipts? 

For example, if you’re claiming for a work-related expense that costs less than $100, you may be able to use other records (such as your bank statements) to prove your claim. You should still track expenses.

The $300 rule

If you’re claiming for expenses that cost more than $300, you’ll need written evidence (such as receipts or invoices) to support your claim. You must also keep records of your expenses for five years in case the ATO needs to review your case.

Examples of tax deductions

Businesses and individuals can claim deductions on their tax returns. Claiming tax deductions can save you money. It lowers your overall taxable income, so you could end up paying less in taxes. Examples of tax deductions you can claim include:  

Lodging your taxes

Some costs associated with managing your tax affairs are deductible. For instance, if you pay a registered tax agent to lodge your return or provide advice, you might be able to claim the cost as a deduction. Other costs you can claim include: 

  • Travel expenses incurred when you travel to meet with your agent for professional advice
  • The fees involved with preparing and lodging your tax return and activity statements
  • Expenses related to communicating with the ATO on your behalf
  • Any litigation fees, such as court fees
  • Credit/debit card payment fees for business tax liabilities (GST etc.) and debit 

You may also be able to claim expenses associated with obtaining and using materials or software to assist in the process. However, you can only claim part of the cost if you use the software for other purposes besides lodging tax returns.

Car expenses

If you’re using your own car for work purposes, you can claim a deduction for the cost of running your vehicle.

What it includes: 

  • Fuel
  • Oil
  • Repairs
  • Maintenance

You can calculate your claim using the cents per kilometre or logbook method. 

Home office expenses

You can claim a deduction for a portion of your mortgage interest, rent, insurance, and utilities. However, you must be using a room in your house as a dedicated home office. 

Home office expenses include: 

  • Utility, rent, or mortgage costs for the portion your home office uses
  • Internet costs 
  • Stationery and office supplies

Work-related travel expenses

Some work-related travel expenses are deductible. Many businesses reimburse employees for travel costs. So, remember if you’re reimbursed, you can’t claim it on taxes.

What travel expenses include:

  • Airfares
  • Accommodation
  • Car hire

Clothing and uniform expenses

If you’re required to wear a uniform to work or if you need to purchase protective clothing, you can claim a deduction for the cost of these items. 

Education and professional development

You may need to take professional development courses or incur other education expenses for work. As long as your employer didn’t reimburse you for the costs, you can claim a tax deduction.

How to track receipts and expenses 

Tracking your receipts and expenses helps show proof of your expenditure. ATO’s myDeductions app can simplify this process for individuals and sole traders.

However, it’s not suitable for businesses. Instead, businesses should track their expenses with accounting software or receipt tracking via Dext or Xero. Working with an online bookkeeping service can also help you record and organize your expenses and other finances to make lodging taxes easy. 

How can you claim tax deductions without receipts? 

Keeping a record of your receipts is the most straightforward way to claim tax deductions. However, receipts are not the only records that businesses keep to log their income and expenses. 

Here are some examples of records you might also have:

Bank statements 

If you’re working with a bookkeeper, they may already be reviewing your bank statements to make sure your books are accurate. A bank statement will usually show a record of your transactions including the dates, amounts, and suppliers.

Logbooks

A logbook is a detailed record of vehicle usage over a specified period. If you use your car for work purposes, maintaining a logbook can help provide evidence of your claim for vehicle-related expenses.

The ATO will look at the total kilometres driven, how much of that was for work, type of car, and purchase date to determine whether you are eligible for the deduction.

Work Diary

A work diary is a record of work-related activities, often including dates, hours worked, and tasks performed. It can serve as proof of work-related expenses such as long-distance travel or overtime meals, helping substantiate your claims for tax deductions.

What records you can’t use for tax deductions

The ATO has a list of unaccepted proof of deductions, which includes the following:

  • Handwritten notes
  • Oral agreements
  • Estimated receipts
  • Spreadsheets

How do you get the most out of tax deductions?

There are a few things you can do to make sure you get the most out of your deductions.

  1. Keep records: As we mentioned earlier, keep records of all your expenses in case the ATO needs to review your claim. This includes receipts, invoices, bank statements, and wage records.
  2. Know the rules: It’s essential to know the rules around claiming a deduction. This includes knowing which items you can claim without receipts and what evidence the ATO will accept.
  3. Get help: If you’re unsure about something or need assistance calculating your deductions, you can speak to a registered tax agent or accountant.

A registered tax agent or accountant will help you:

  • Understand the rules and ensure you’re claiming deductions correctly.
  • Calculate your deductions so you don’t miss anything.
  • Lodge your tax return and maximise your refund.

At the end of the day, it’s important to remember that you can only claim deductions for expenses that are directly related to your job. However, with the help of a professional, you can be confident that you’re getting the most out of your tax return.

The Bottom Line

You can claim tax deductions without receipts, but you need to show evidence of your expenses through other records such as invoices, bank statements, and wage records. If you don’t have documents to support your claims, you can’t claim the deduction.

Items you can claim without receipts include car expenses, home office expenses, work-related travel expenses, clothing and uniform expenses, and education expenses.

To get the most out of your deductions keep records of all your expenses and know the rules around claiming deductions. If you’re unsure about something or need help calculating your deductions, you can speak to a registered tax agent or accountant. They can help you understand the rules and make sure you’re claiming deductions correctly.

Contact Visory Today

If you need help with getting your books in order for taxes, our team at Visory can help. We are a team of expert bookkeepers who can help you with all aspects of your bookkeeping. We’re here to help you maximise your savings and manage your books. Contact us today to find out how we can help you.

EOFY Survival Guide for Creative Agencies: The Most Commonly Forgotten Financial Tasks

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The end of the financial year (EOFY) is crunch time for creative agencies. While you’re focused on wrapping campaigns, billing clients, and managing deadlines, your financials often take a back seat, until it’s too late. This is why we have created this EOFY checklist for creative agencies.

At Visory, we help creative agencies streamline their bookkeeping and uncover smarter business insights from their finances. So we know exactly where things tend to unravel at the EOFY. This EOFY checklist for creative agencies covers the most commonly forgotten financial tasks, and what you can do now to stay ahead.

 

  1. Unbilled Work That Gets Missed

Have you completed work that hasn’t been invoiced yet? That’s called Work in Progress (WIP), and it may need to be recognised as income, especially for accrual-based accounting.

What to do: Review projects delivered in June. Log hours or progress, and generate any missing invoices. Ensure WIP is properly tracked in tools like Streamtime or Harvest, and synced to Xero.

 

  1. Project Profitability Left Unreviewed

EOFY is the perfect time to understand which clients or projects drove the most profit, and which cost more than they should’ve.

What to do: Run a profitability report across major accounts. Look at time tracked vs. budgeted hours, and flag scope creep for next year’s planning.

 

  1. Accruals and Prepayments Overlooked

If you’ve paid for software or services in advance, only a portion may be deductible this financial year. Similarly, any services you’ve received but haven’t paid for should be accrued.

What to do: Review large annual subscriptions, deposits, or retainers. Work with your bookkeeper or finance partner to allocate expenses across the correct financial periods.

 

  1. Missing Contractor Details for TPAR

If your agency uses freelancers or contractors (especially for design, production, or video), you may need to complete a Taxable Payments Annual Report (TPAR).

What to do: Confirm if your agency falls under reporting obligations. Gather ABNs and contractor payment details. The deadline is 28 August, but it pays to prep now.

 

  1. Forecasting the New Financial Year

EOFY isn’t just about closing the books, it’s a chance to plan ahead. Many agencies forget to build or update cash flow and revenue forecasts until Q1 is already in full swing.

What to do: Use EOFY as a trigger to reset your forecast. Base it on pipeline activity, retained accounts, and recurring costs and don’t forget to align it with your wider business growth goals

 

  1. Chart of Accounts That No Longer Makes Sense

Over time, your Chart of Accounts can become messy, especially if you’re adding new services or team structures. This creates confusion for reporting and budgeting.

What to do: Look at whether your current setup gives you the clarity you need on things like project profitability, team costs, or software spend. If not, we can help restructure your books and provide you with smarter business insights.

EOFY doesn’t have to be a headache

EOFY can be a huge opportunity to clean up, look ahead, and take control of your agency’s finances. But only if you stop putting it off.

With Visory, you get a team of experts who handle the numbers behind the scenes, so you can stay creative and in control. Whether it’s prepping your tax data, running reports, or highlighting key insights, we’ve got you covered.

 

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Frequently Asked Questions Read more

Work-related travel expenses: How to track them and what to claim for your business

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Many business owners and employees travel, so you’ll likely need to record work-related travel expenses. The good news is that business travel expenses are often tax deductible, so tracking them can help you save money on taxes. Tax deductions can lower your taxable income, so you could pay less in taxes overall. 

In this post, we’ll cover everything businesses need to know to track, record, and claim work-related travel expenses, including: 

  • What are work-related travel expenses?
  • Business travel expenses you can claim
  • What you can’t claim
  • Records you need to claim business travel expenses
  • How to track work-related travel expenses

What are work-related travel expenses? 

Work-related travel expenses may include costs for business travel, accommodation, or meals. However, not all travel expenses qualify as work-related. 

Many small businesses run into issues with the Australian Tax Office when they deduct travel expenses. It can be confusing to determine what counts as a qualified business travel expense and what doesn’t.

One of the key issues employers run into is understanding the line that separates personal and business expenses. So, the ATO established clear definitions for the types of expenses that qualify to be tax deductible.

Business travel expenses you can claim

To qualify as a work-related travel expense, you or your employees must be:

  • Travelling away from your home and staying away overnight
  • Able to prove that the travel was necessary for your business

Some of the common travel expenses businesses can deduct are costs for:

  • Rental cars and additional fees for parking, fuel, tolls, etc.
  • Public transport (bus, trains, etc.)
  • Taxis or ride-share (Uber)
  • Airfare (tickets and baggage costs)
  • Accommodations (hotels)
  • Overnight meals

What you can’t claim

You can’t deduct travel expenses that aren’t necessary for conducting business. In other words, you can’t deduct your holiday. However, you can deduct the travel costs to go to another city and meet with a client. In that case, you may deduct transport, hotel, and even some meal costs. 

Other types of non-deductible travel expenses include: 

  • Leisure activities while on a business trip
  • Holidays during business travel
  • Travel insurance, visas, and other documents
  • Gifts and entertainment

If you combine a business trip with holiday, then you can only claim the portion of the trip that was for business. For example, if you live in Perth and attend a work conference in Sydney, you can claim those costs. But, if you decide to stay in Sydney a few days after to sightsee, then the extra days and money doesn’t qualify. 

To qualify part of those expenses, you’ll need to show how you separated the work from personal costs. 

Records you need to claim business travel expenses

Businesses may cover employees’ work-related travel expenses through travel allowances. However, there are specific guidelines for how much an employee may spend daily on travel allowances, which we’ll cover later in this post. 

To claim travel expenses, you’ll need to keep records. If you can prove something was a qualified business travel expense, you should have no issues with your tax return.

Businesses should keep these records for five years:

  • Meal and other receipts
  • Tax invoices
  • Ticket stubs
  • Boarding passes
  • Travel diaries

You may be able to show proof that something is a work-related travel expense through: 

  • Signed contracts 
  • Meetings with documentation
  • Proposals
  • Email confirmations

How to track work-related travel expenses

Businesses can cover work-related travel expenses for employees and track them. To do this, you generally have three options: 

  • Pay for expenses directly with a company card or business bank account
  • Set up a reimbursement program for travel expenses 
  • Pay employees a travel allowance

If your business covers travel expenses through any of the above methods, then employees can’t claim those on their personal taxes. Instead, you may be able to claim them and deduct the cost from business taxes. 

Keep in mind if you offer travel allowances that they might trigger the fringe benefits tax, which is a separate income tax. For example, some businesses offer an employee a living-away-from-home allowance instead of a travel allowance. Because the employee is away from home to work for long periods, it might be considered a fringe benefit.

Businesses need to keep accurate records on those travel expenses. Here are some tips to help you track work-related travel expenses.

1. Educate employees on what they can claim

You can reduce errors and missing records by training employees on how to track travel expenses before they go on a trip. Even a simple checklist of what travel expenses you cover and don’t will be helpful. 

Again, if you offer travel allowances, inform employees of the daily limits or reasonable amounts for meal, accommodation, and incidental expenses. The reasonable amounts vary depending on location and other factors, so consult ATO’s guidelines.

Additionally, your employees should keep all of their receipts and documents while travellingon business. 

2. Track expenses and keep records 

The ATO requires that businesses keep records for five years as proof of travel claims. There are several expense tracking apps that make it easier to save receipts and other documents. 

The ATO app also has a myDeductions tool for sole traders. Larger small-to-medium enterprises will want to invest in a more robust tool. Accounting software like Xero and MYOB also have expense tracking features. 

3. Log a travel diary

If you’re a sole trader or partner and travel for work for more than six consecutive nights, the ATO requires you to keep a travel diary. It’s a logbook of what you do and spend money on while traveling. 

A travel diary can be in any format as long as it shows:

  • The days you travelled
  • What you did each day
  • The times you did it 

These entries should all correlate with the records you keep—this acts as an activity timeline with records. 

Keeping a travel diary even for trips shorter than six nights might be beneficial. If you ask your travelling employees to keep a travel diary, you’ll have an extra way to verify their claimed expenses.

4. Track expenses with a bookkeeper

The ATO is particular about what you can and can’t claim for travel expenses, and it can be costly if you track them incorrectly. At the same time, business travel expenses can become complicated to track, deduct, and report. When your business is fast-growing and you have over 100 employees to track, this is especially true. 

Online bookkeeping services like Visory can help you track, record, and report your travel expenses. Once you need to lodge your business taxes, you’ll have organised books that include all the documents the ATO may need.

To learn how Visory can help you manage work-related travel expenses, and all your back-office finance needs, chat with one of our bookkeeping experts. Once you schedule a time to chat, we’ll get to know your business and identify the best services for you. 

The Ultimate Guide to Year-End Bookkeeping for Business Owners

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As the calendar year winds down, it’s time for business owners to shift gears and focus on closing the year strong while setting the stage for success in 2025. The end of the year is not just about tidying up loose ends, it’s an opportunity to evaluate, plan, and optimise your business operations.

This is why we have developed a financial guide to year-end bookkeeping for business owners, to streamline your finances, align with your goals and prepare for a successful new year.

 

  1. Conduct a Financial Health Check Before Year-End

Start by reviewing your financial statements for 2024. Are they accurate, up-to-date, and reflective of your business performance? This is critical for understanding cash flow, profitability, and potential growth opportunities.

Key Actions:

  • Reconcile bank accounts and transactions.
  • Review profit and loss statements and balance sheets.
  • Identify unpaid invoices or outstanding debts.

Our expert bookkeepers can clean up your financial records and ensure your data is organised and reliable. This provides business owners with a clear picture of your financial health as you head into the new year. Better yet, visit our website to avail of a free Financial Health Check.

 

  1. Optimise Your Tax Strategy

The end of the calendar year is a crucial time to prepare for the end of the fiscal year. Proactive tax planning can reduce liabilities and maximise deductions, ensuring you’re not leaving money on the table.

Key Actions:

  • Identify tax-deductible expenses and ensure they’re recorded.
  • If registered for Fringe Benefits Tax, review benefits provided to employees.
  • Review payroll compliance to avoid year-end surprises.

We collaborate with your accountant to ensure your books are tax-ready, minimising stress and maximising efficiency during tax season.

 

  1. Plan for Cash Flow in 2025

Strong cash flow is the lifeblood of any business. Planning now ensures you won’t face bottlenecks in the new year, especially during slower seasons.

Key Actions:

  • Create a budget for 2025, forecasting revenue and expenses.
  • Identify upcoming investments or large expenses to prepare for.
  • Analyse trends in client payments and adjust forecasts if needed.

We provide insights into your financial data, helping you build a realistic budget and spot opportunities to improve cash flow management.

 

  1. Evaluate Your Operational Efficiency

The end of the year is an ideal time to assess how well your back-office processes are working. Are there bottlenecks or inefficiencies that are holding you back?

Key Actions:

  • Audit your current bookkeeping and reporting workflows.
  • Assess the technology and tools you’re using – are they helping or hindering you?
  • Look for opportunities to outsource time-consuming administrative tasks.

We take time-consuming admin tasks off your plate, from payroll to data entry, so you can focus on growing your business. Plus, our software integrations ensure your systems work seamlessly together.

 

  1. Set Goals and KPIs for 2025

A fresh year means fresh opportunities. Define clear goals and key performance indicators (KPIs) that will guide your business strategy in 2025.

Key Actions:

  • Review this year’s goals: What worked? What didn’t?
  • Identify areas for growth, like expanding services or improving profitability.
  • Establish KPIs to measure progress and success in the coming year.

Our detailed reporting tools give you actionable insights to track your business’s performance and stay aligned with your goals.

 

  1. Review Compliance and Legal Obligations

Ensure your business is compliant with all necessary regulations before the year ends. This avoids penalties and ensures you start the year on the right foot.

Key Actions:

  • Verify employee records and superannuation compliance.
  • Update business licenses and permits if required.
  • Ensure your accounting practices align with the latest standards.

We simplify compliance by keeping your financial records organised and up to date, so you don’t have to worry about falling behind.

 

  1. Prepare for Year-End Reporting

Year-end reporting is critical for stakeholders, investors, and tax purposes. A polished set of reports can also help you make better decisions in 2025.

Key Actions:

  • Compile accurate financial and operational reports.
  • Summarize key metrics, like profitability and growth rates.
  • Share insights with your team to align everyone on next year’s priorities.

We provide real-time reporting that’s customised to your business needs, offering clarity and confidence as you wrap up the year.

Act Now to Set Your Business Up for Success

The end of the year is a busy time, but it’s also an opportunity for business owners to strengthen their foundation for growth. By partnering with Visory, you can eliminate the back-office headaches and focus on building a thriving business in 2025.

Don’t wait—schedule a call with us today to get started!

Introducing Visory’s New Customer Solutions Team

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At Visory, we believe managing your business finances should be easy, efficient, and adaptable to your unique needs. That’s why we’re shaking up the traditional bookkeeping model and delivering a new way to get the support you need, when you need it.

We’re proud to introduce the Visory Customer Solutions Team, a game-changing approach to financial support that replaces the outdated, one-size-fits-all model many businesses have relied on for years.

Why Change the Status Quo?

For decades, the industry standard has been assigning businesses a single point of contact in the form of a bookkeeper or an account manager. While this works for some, it can also present challenges:

  • Conflicting Priorities: Your bookkeeper manages multiple clients, so what you deem a priority, may not align with your bookkeepers.
  • Limited Expertise: Bookkeepers may have a narrow scope of expertise. Complex needs such as migrating from one software to another, may be outside of their scope of knowledge.
  • Inflexible Support: Many businesses need help on the go, not just at their desks.

At Visory, we see things differently. Your business deserves fast access to specialised expertise across a range of financial needs. That’s where our new Customer Solutions Team comes in.

Meet the Customer Solutions Team

This isn’t just a team, it’s a resource designed to fit seamlessly into your operations, offering faster, more tailored support than ever before. Here’s what you can expect:

  • Faster Responses: Enquiries are routed to the most suitable expert quickly, so you’re never left waiting.
  • Specialised Expertise: Our team includes experts in everything from software migrations to cash flow management, giving you access to deep knowledge across a variety of needs and industries.
  • Flexible Support Options: Whether you’re in the office or out in the field, you can reach us however works best for you:
    • The Visory Platform: Log requests, track progress, and get updates all in one place.
    • “New Request” Button: Submit and track your requests with clear timelines for responses.
    • Phone: For urgent issues, call us at 1800 VISORY during business hours.
    • Email: Share detailed questions or documents whenever it’s convenient for you.

The Visory Advantage

This shift isn’t just about solving problems faster, it’s about redefining what great financial support looks like. Unlike traditional bookkeepers, who juggle multiple clients with varying priorities, our team gives you:

  • Dedicated Focus: Your requests are prioritised based on your needs, not someone else’s schedule.
  • Broader Range of Expertise: Whatever challenge your business faces, we have the right specialist to help.

Ready to Get Started with Visory?

From December 13th, the Customer Solutions Team is ready to help you tackle challenges big and small. Whether you’re looking for quick advice, strategic guidance, or hands-on support, we’ve got you covered.

Contact us today to learn more about how this new approach can elevate your financial operations and your business success.

 

Do I Need a Bookkeeper, an Accountant, or Both?

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As a small business grows into a medium- or large-sized operation, it often becomes impractical for the founder to balance the books. Picture a back-office employee, already stretched thin, trying to manage the detailed work of itemizing and coding transactions—where would they find the time?  While office managers can temporarily bridge the gaps, bringing in a dedicated bookkeeper or accountant becomes essential for maintaining efficiency and accuracy.

The terms bookkeeper and accountant are often used interchangeably, but in fact, they are not one and the same. The educational requirements, daily schedule, and specific skills of these two roles can overlap but are not synonymous. Let’s look at why accountants and bookkeepers can each help your business, and how to tell if you need a bookkeeper or an accountant. 

What does a bookkeeper do?

Bookkeepers are responsible for the day-to-day record keeping of your business’s money. The duties of a bookkeeper can include documenting financial transactions, posting credits and debits to a balance sheet, processing payroll, generating invoices, and merging accounts. The bookkeeper may also stay on top of the vital records required by the Australian Tax Office (ATO) or New Zealand’s Inland Revenue Department (IRD). 

In short, bookkeepers create the financial records that an accountant can later analyse and use to create more complex reports or file full tax returns. A bookkeeper is the first stage in the accounting process. They benefit your business by tackling daily financial records that must be accurate in order to create useful reports later. 

Who is a bookkeeper? Some bookkeepers are trained by their employers, but other bookkeepers learn their skills by getting a Certificate in Accounting and Bookkeeping and registering to become a BAS Agent. You may want to hire a bookkeeper if you have a tax accountant but need someone to handle your office’s in-house financial records.

What do accountants do?

Not only will an accountant use the records that a bookkeeper created, but they will also crunch the numbers on their own reports. Their work tends to be more senior level and they may even advise the company regarding high-level company decisions. As a result, the salary of an accountant can be nearly double that of a bookkeeper. 

The typical role of an accountant encompasses things like prepping for taxes, preparing financial statements, plotting the growth of your business, verifying that the company’s finances are government compliant, examining revenue and recommending budgets, resolving accounting discrepancies, and setting up accounting processes. When you’re deciding between a bookkeeper or an accountant, you know you’re ready for a full-time accountant if you have the need for financial analysis and advice regarding the impact of financial decisions. 

An accountant may have a Diploma of Accounting or another advanced degree. Many businesses can get by with one in-house accountant, but you may need the expertise of a whole team as you grow and scale. 

When you need both an accountant and a bookkeeper

It is important to understand when you might need both a bookkeeper and an accountant. Having both roles working together offers significant benefits. Separating their duties helps ensure compliance with government reporting and creates a built-in system for cross-checking. The bookkeeper records the financial transactions, while the accountant reviews and verifies the books, reducing the likelihood of errors.

A complicated tax structure may also call for both roles. You want one professional to keep an accurate general ledger and track daily expenditures (the bookkeeper) and another to analyse the books, look for available tax credits, and prepare tax reports (the accountant). If your business is growing and in search of investors, having both a bookkeeper and an accountant also strengthens the financial picture of your growing organisation. 

So, do you need a bookkeeper or an accountant, or both? Bookkeeping services keep your day-to-day financial tasks done on time. You’ll never miss payroll again. Meanwhile, an accountant offers more robust analysis and internal financing advice. Larger companies probably need both. Bookkeeping services keep you running smoothly in the present day and accountants make sure the future remains stable, allowing you to focus on growth.

If you need a team of financial experts to keep your company’s ship upright, contact Visory. Our highly skilled experts are tailored to the expertise you need, and we can tackle bookkeeping and accounting projects large and small. We’ll become such a part of your team you’ll want to invite us to the holiday party (after we tell you if that can be expensed).