Last updated: 6 November 2026. Written by the FreeMyCloud team.
Checked against the GST Act 1999 and GST Regulations 2019 compilations on the Federal Register of Legislation, and the ASIC company record keeping page, on 6 November 2026.
- It moves bill entry, coding, GST treatment, statement reconciliation and payment run preparation outside the business. Approval and bank authority stay with you.
- A tax invoice must show the supplier identity and ABN, and the buyer identity or ABN once the total price is at least $1,000 (GST Act s 29-70).
- No tax invoice is needed where the supply value does not exceed $75, which is $82.50 including GST (GST Act s 29-80, GST Regulations 2019 s 29-80.01).
- A GST credit on a supplier bill ceases four years after the day the GST return for that tax period was due (GST Act s 93-5).
- A company must keep financial records, invoices included, for at least seven years (ASIC).
- It suits steady weekly volume, and does not settle an unmade decision about who approves a bill.
Accounts payable outsourcing moves the supplier side of your ledger to a bookkeeper outside the business: bill entry, coding, GST treatment, statement reconciliation, the aged payables report and payment run preparation. Approval and bank authority do not move. It is the easiest piece of a small finance function to hand over: high volume, rule based, and every step leaves a record someone else can check. Below: what the week looks like, the GST and record keeping rules it has to respect, how it differs from automation, and when keeping it in-house is the better call.
What is accounts payable outsourcing, and what stays with you?
Accounts payable is the money-out half of the ledger: supplier and subcontractor bills, the coding that puts each against the right account and GST treatment, the match against what was ordered and received, and the payment that closes it off. Outsourcing hands the processing of that cycle to someone working in your accounting file. What it does not hand over is authority. A bookkeeper can enter a bill, flag a discrepancy, reconcile a statement and tell you what falls due. Releasing money is a separate act, and in most arrangements the owner approves the batch in the banking platform.
Processing moves easily because it is written down. Approval does not. A fuller picture of the jobs is in our guide to what a bookkeeper does, and the scope sits on our accounts receivable and payable page.
What does the accounts payable process look like week to week when it is outsourced?
The accounts payable process in a small Australian business is a weekly rhythm rather than a monthly event, which is why it responds well to outsourcing. Done monthly it becomes a day of reconstruction. Done weekly it is an hour or two of routine.
| When | What happens | Who does it |
|---|---|---|
| Daily | Bills captured from the accounts inbox, entered, coded, GST treatment checked | Outsourced accountant |
| Daily | Bills that disagree with the order or quote go on a query list | Accountant raises, you resolve |
| Weekly | Aged payables report prepared, batch drafted for what falls due | Outsourced accountant |
| Weekly | Payment batch reviewed and released in the banking platform | You, or your office manager |
| Weekly | Bank feed reconciled so paid bills close off | Outsourced accountant |
| Monthly | Supplier statements agreed to the ledger, credits chased | Outsourced accountant |
| Quarterly | Payables detail and GST coding tidied for the BAS | Accountant prepares, your registered agent lodges |
The handover is unremarkable when the file is in the cloud. Access is granted at the permission level you choose, the inbox is shared, and the first week goes on agreeing the coding conventions already in the file. Our page on how outsourced bookkeeping works sets out the sequence, and FreeMyCloud arrangements start within three business days, with no setup fees and no lock-in contracts.
What are the tax invoice requirements an outsourced accounts payable team has to check?
This is where payables stops being data entry. A GST credit depends on holding a valid tax invoice, and section 29-70 of the A New Tax System (Goods and Services Tax) Act 1999 sets out what it must contain. It is issued by the supplier, is in the approved form, and carries enough information for the supplier identity and ABN, what was supplied and the price, the extent to which each supply is taxable, the date of issue and the GST amount to be clearly ascertained. Once the total price is at least $1,000, the buyer identity or ABN must be ascertainable too. That is compilation 96, compilation date 1 January 2026.
There is a low value exception. Section 29-80 removes the requirement where the value of the supply does not exceed an amount set by regulation, and section 29-80.01 of the A New Tax System (Goods and Services Tax) Regulations 2019 specifies $75. Value is the GST exclusive figure, so the practical threshold is $82.50 including GST. That is compilation 5, compilation date 1 November 2025.
A tax invoice has to identify the buyer once the total price reaches $1,000 (GST Act s 29-70). Below a supply value of $75, which is $82.50 including GST, no tax invoice is required (GST Act s 29-80 and GST Regulations 2019 s 29-80.01).
The checks that catch real problems are dull and repeatable: a valid ABN, GST charged by a supplier that is actually registered, the GST line agreeing with the total, no second copy of an invoice entered under a different supplier spelling, and contractor payments captured in enough detail to be pulled out later. On that last point, our explainer on TPAR and reportable contractor payments covers who has to report. A clean payables ledger is also what makes BAS preparation a review rather than an excavation.
How long do you have to claim input tax credits on a supplier invoice?
Four years. Section 93-5 of the GST Act says the entitlement to an input tax credit ceases to the extent it has not been taken into account in an assessment of a net amount during the four years after the day the GST return was due for the tax period it would be attributable to. Division 93 puts it plainly: entitlements cease unless included within a limited period, generally four years. Section 93-10 sets out the exceptions.
That rule is the quiet argument for a weekly routine: an invoice that never reached the ledger is not a missing document, it is an expiring one. The mirror image on the money-in side, where a GST adjustment is available on a bad debt, is in our post on unpaid invoices and where they rank.
Retention is a separate question. ASIC states that companies must keep financial records for at least seven years after the transactions are complete, that those records must correctly track and explain transactions and the company financial position, and that electronic records are fine provided a hard copy can be produced in a reasonable timeframe. See the ASIC company record keeping guidance. Where processing happens offshore, the storage and access questions are worth asking directly, and we set out the Privacy Act position in our article on offshore bookkeeping and data security.
Is accounts payable automation the same as accounts payable outsourcing?
No, and conflating the two is the most common way a payables project disappoints. Accounts payable automation is software: bill capture that reads a PDF and proposes a supplier, an amount and a tax treatment, approval workflows, payment file generation. Outsourcing is a person doing the judgement around that software. The tools have become good, which is why the work left over is the awkward part.
Capture tools read what is on the page. They do not know the freight line was quoted differently, that a supplier has charged GST on a GST-free item for two quarters, or that this bill is a second copy. Our comparison of Australian accounting software covers the bills side of each platform, and FreeMyCloud accountants are able to work with Xero, MYOB, QuickBooks and Reckon.
| The job | What automation does well | What a person still has to do |
|---|---|---|
| Capturing the bill | Reads the PDF, proposes supplier, date, total and tax | Confirm the supplier, and that the bill is not a duplicate |
| Coding | Repeats the last coding used for that supplier | Notice when this bill is not like the last one |
| GST treatment | Applies the default rate on the supplier record | Check the supplier is registered, and the GST line agrees |
| Matching | Holds a purchase order against a bill | Resolve short deliveries, price variances, missing credit notes |
| Supplier statements | Little, in most small business stacks | Agree the statement to the ledger, chase what is missing |
| The payment decision | Drafts the batch and the file | Decide what gets paid this week, and release it |
Automation lowers the hours and outsourcing covers the judgement, so most businesses use both. Neither helps if the file was never set up properly, which is where cloud bookkeeping earns its keep.
Should you be outsourcing accounts payable and receivable together?
Usually, for a reason that has nothing to do with buying more hours. Accounts payable and receivable are the same question asked twice: the payables list says what leaves the account over the next three weeks, the receivables list says what should arrive. Outsourcing accounts payable and receivable together means one person holds both lists and can tell you on a Tuesday whether the week works.
What accounts receivable outsourcing adds on the money-in side
Accounts receivable outsourcing covers invoicing out on time, allocating receipts against the right invoice, keeping the aged receivables report current, and running the follow-up cycle at agreed intervals rather than when someone remembers. Most overdue balances are not disputes, they are invoices nobody chased in the first three weeks.
Where accounts receivable management and credit control sit
Accounts receivable management is the reporting and the discipline. Credit control is the decision about who gets terms and what happens when they are breached, and it stays with the business. Consistent documented follow-up is the part that benefits from someone whose week has it scheduled, which our debtors management service covers.
What do accounts payable outsourcing services cost compared with an accounts payable officer in-house?
The honest comparison is coverage against coverage, not hourly rate against hourly rate. An accounts payable officer in-house knows the suppliers and can be asked a question across the desk, and carries the full cost of employment: salary, superannuation, leave, equipment, software seats and recruitment. Accounts payable outsourcing services give continuity and a documented process at a lower cost, but the person is not in the room.
FreeMyCloud has placed university-qualified graduate accountants based in the Philippines with Australian businesses since 2010, and works with more than 200 of them, from individual operators to ASX-listed companies. The arrangement typically costs about 50% less than employing a bookkeeper locally, and the staff work Australian business hours under a signed NDA. The savings calculator and our page on what a bookkeeper costs in Australia will get you closer to a real figure than any article can.
| Model | Who it tends to suit |
|---|---|
| Accounts payable officer in-house | High volume, and anyone who wants the role in the room |
| Local bookkeeping firm, hourly | Low volume needing a quarterly catch up, not a weekly rhythm |
| Dedicated outsourced accountant | Steady weekly volume, where the same person each week matters |
None of these is right in general, and a business with a capable long-serving payables person is usually better off adding capacity than replacing anybody. Our look at outsourced bookkeeping services compared sets out published prices.
When is accounts payable outsourcing not the right fit?
Three situations come up repeatedly. An unresolved approval process is the first: if nobody has decided who signs off a $4,000 supplier bill, outsourcing the processing surfaces that question faster, it does not answer it. Very low volume is the second, because fifteen bills a month in a tidy file does not justify the coordination. The third is a file months behind, because a backlog is a project with an end date and is better treated as one.
One boundary is worth stating plainly. FreeMyCloud is not a registered tax or BAS agent and does not lodge returns or activity statements. The work is prepared so your registered agent has a complete ledger. Our outsourced bookkeeping FAQs and offshore accounting page cover that division of labour, and the weekly scope is on our bookkeeping services for small business page.
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Frequently asked questions about accounts payable outsourcing
What are accounts payable services, and who provides them in Australia?
Accounts payable services cover the money-out cycle: capturing supplier bills, coding them, checking the GST treatment, matching to orders and deliveries, reconciling supplier statements, preparing the aged payables report and drafting payment runs. In Australia they are provided by in-house payables staff, local bookkeeping firms, BAS agents as part of a wider engagement, and outsourced providers placing dedicated bookkeepers or graduate accountants in the client accounting file.
Does outsourced bookkeeping include accounts payable?
Almost always. Outsourced bookkeeping is usually scoped around the weekly cycle, and bills, coding and bank reconciliation are the core of it. What varies between providers is whether supplier statement reconciliation, query chasing and payment batch preparation are included or treated as extras, so it is worth having the scope written down before the first week rather than after the first surprise.
How does debtor management work if the follow-up is outsourced?
The business sets the terms, the reminder intervals and the point of escalation, and the outsourced accountant runs the cycle to that schedule and documents every contact. Reminders go out at the agreed days overdue, payments are allocated against the right invoices, and anything disputed or genuinely stuck is escalated back to the owner. Putting an account on hold or sending a letter of demand stays a business decision.
What goes in an aged receivables report, and how often should you read one?
An aged receivables report lists every unpaid customer invoice grouped by how long it has been outstanding, typically current, 30, 60 and 90 days and over, with a total for each customer. Weekly is the interval at which it is useful, because a balance identified at 30 days is still a conversation, while the same balance at 120 days is often a recovery problem.
Can an outsourced accounts payable team pay suppliers from your bank account?
They should not need to, and most well run arrangements are built so they cannot. The outsourced accountant prepares the payment batch and the business releases it in its own banking platform, which keeps authorisation inside the business and preserves the separation between preparing a payment and approving it. Access to the accounting file is granted at the permission level the owner chooses.
Does accounts payable outsourcing affect cash flow management?
It improves the information cash flow management depends on rather than changing the cash itself. When payables are entered weekly and receipts allocated weekly, both lists are current enough to show what the next three weeks look like. Deciding which supplier waits and which customer is chased harder remains a business decision, but it gets made on figures rather than on a guess.
This article is general information about Australian bookkeeping and reporting obligations, current as at 6 November 2026. It is not tax, financial or legal advice. FreeMyCloud is not a registered tax agent and does not prepare or lodge tax returns. Rates, thresholds and dates change. Confirm your own position with your registered tax or BAS agent.
