When a new business client walks in the door, the first job is getting the foundational registrations and obligations in place before any trading begins. Missing a step at this stage — failing to register for GST on time, not setting up payroll correctly, or failing to open a separate business bank account — creates compliance problems that are expensive and time-consuming to unwind. This is the checklist every bookkeeper should work through with a new Australian business client.
Step 1: ABN Registration
An Australian Business Number is the starting point. An ABN is required to trade commercially, to register for GST, to quote for work without having tax withheld at the top rate (47%), and to interact with the ATO. It is also required for any entity that wants to issue tax invoices.
Who qualifies? Any individual, company, trust, partnership, or other entity that is carrying on an enterprise in Australia. The ATO uses a genuine enterprise test — activities conducted as a hobby or purely for personal purposes do not qualify.
How to register: ABN registration is done through the Australian Business Register (ABR) at abr.gov.au. For most simple structures, registration is free and immediate. For companies, the company must first be registered with ASIC and have an ACN before applying for an ABN.
What bookkeepers need to confirm: The legal entity name and structure, the business commencement date (this affects GST registration timing), and the business address. The ABN must exactly match the entity's registered name — using a trading name on invoices without the registered entity name is a common error.
Step 2: The GST Registration Decision
GST registration is mandatory when turnover (or projected turnover) reaches $75,000 per year ($150,000 for non-profit organisations). However, voluntary registration is available at any turnover level.
Arguments for registering early, even below threshold:
- The business can claim input tax credits on startup costs, which can be significant in capital-intensive businesses.
- It avoids the disruption of mid-year registration when threshold is crossed (supplier relationships, invoice templates, accounting setup all need to change).
- Some clients — particularly other GST-registered businesses — prefer to deal with registered suppliers.
Arguments for deferring registration:
- A business with primarily consumer clients (B2C) would need to charge 10% more on its prices or absorb the GST, compressing margins.
- Administrative burden — quarterly BAS lodgement is an ongoing obligation.
The decision should be made intentionally, not by default. Document it in the client file with the reasoning.
Step 3: Other ATO Registrations to Consider
Beyond GST, new businesses may need:
Pay As You Go Withholding (PAYGW): Required as soon as the business employs staff or engages workers who do not quote an ABN. PAYGW registration must happen before the first payroll run. Failure to withhold and remit when required creates personal liability for directors in a company structure.
Fringe Benefits Tax (FBT): If the business will provide fringe benefits to employees — cars, entertainment, loans — FBT registration is required. The FBT year runs from 1 April to 31 March, separate from the income tax year.
PAYG Instalment: Generally not a day-one issue, but the ATO will eventually ask business owners to pay income tax in instalments. Understanding this obligation upfront prevents cash flow surprises in year two.
Step 4: Business Structure and Banking
The bookkeeper's scope typically does not extend to advising on business structure — that is the tax agent's or accountant's domain. But the structure chosen (sole trader, company, trust, partnership) has direct bookkeeping implications.
A sole trader can use a personal bank account for business, but I always recommend a separate business account. It makes reconciliation vastly simpler and protects the client in the event of an ATO audit. For companies and trusts, a separate account is not optional — using personal accounts for entity transactions creates legal and accounting problems.
At account opening, ensure the account is in the entity's legal name, not the trading name. The bank account BSB and account number will be needed for BAS payment plan setups and for super fund registrations.
Step 5: BAS Agent vs Tax Agent — Understanding the Distinction
A common point of confusion for new clients: the difference between a BAS agent and a tax agent.
BAS agents are registered with the Tax Practitioners Board (TPB) to provide BAS services — preparing and lodging activity statements, advising on GST, PAYG, and employer obligations. Bookkeepers typically operate as BAS agents.
Tax agents are registered to provide tax advice and lodge income tax returns. They can also provide BAS services.
If you are a BAS agent, be clear with clients about the boundaries of your advice. You can advise on GST treatment, payroll obligations, and activity statement preparation. You should not be advising on income tax planning, entity structuring, or CGT — that is the tax agent's role. Referring clearly to the tax agent when questions go outside your scope protects you professionally and serves the client better.
The Setup Checklist
- ABN registered and confirmed correct entity name
- GST registration decision documented and registration completed if applicable
- PAYGW registration completed before first payroll
- Business bank account opened in entity's legal name
- Accounting software configured with correct entity details, GST settings, and financial year
- Chart of accounts set up appropriate to industry
- Payroll software configured with correct award and tax settings if staff engaged
- Super fund default chosen and registered with ATO for SuperStream
- Engagement letter signed covering scope, fees, and client responsibilities
Working through this checklist systematically at onboarding takes two to three hours and prevents dozens of hours of corrective work later. It is one of the highest-value things a bookkeeper does for a new business client.