How to Start an IT Consulting Business in Australia?
- johnry8
- Dec 17, 2025
- 2 min read
Starting an IT consulting business can be exciting, especially if you already have strong technical skills and a desire to help businesses streamline their systems, improve security and work smarter with technology. But while the tech side may feel easy, the business and accounting side often catches new IT consultants off guard.
Many IT professionals move into consulting because of their expertise, but running a business requires a whole different skill set. Without the right structure and financial systems, it is easy to:
Undervalue your time
Miss important tax and compliance obligations
Run into cash flow issues
Lose track of expenses or unpaid invoices
Make business decisions based on guesswork instead of real numbers
A strong accounting foundation is not just about staying compliant. It helps you:
Set profitable pricing
Manage cash flow with ease
Understand which services make you money
Plan for growth and future team hires
Avoid surprises at tax time
Starting with the right structure and systems early, saves money, time and stress later.
1. Set Up the Right Business Structure
Your structure impacts your tax obligations, risk exposure and reporting requirements.
The most common structures for IT consultants are:
Sole Trader Simple and easy to set up, but you are personally liable for business debts.
Company More protection and often more tax effective when income grows. Also tends to look more professional to corporate clients.
2. Get Your Accounting System Set Up Properly
A cloud based accounting system like Xero, QuickBooks or MYOB makes it easier to:
Track income and expenses
Record client invoices
Automate invoice reminders
Reconcile payments
Stay across your GST obligations
Best practice setup includes:
Separating your personal and business finances
Creating service codes for your IT offerings
Setting up recurring invoices for monthly retainers
Using automated reminders to speed up payment collection
3. Understand Your Tax and GST Obligations Early
IT consultants often do not realise when GST registration becomes mandatory. You must register once your turnover reaches $75,000.
You will also need to understand:
Business Activity Statements (BAS)
How to track GST on expenses
What you can claim as a deduction
How to pay yourself correctly
When PAYG withholding begins if you hire staff
Do’s and Dont’s
Do:
Keep digital receipts for equipment and software (Hubdoc etc)
Track travel and home office costs
Put aside money for tax every month
Do not:
Mix personal purchases with business accounts
Wait until year end to sort your bookkeeping
Ignore overdue BAS obligations
4. Build a Pricing Model That Protects Your Time
A common mistake in IT consulting is undercharging. Remember you are not just paid for the hour you work but for the years of expertise behind it.
Pricing options include:
Hourly rate
Fixed projects
Monthly support retainers
5. Put Insurance and Legal Agreements in Place
Many IT consultants skip this part, but it protects you and makes you more professional.
Important protections:
Professional indemnity insurance
Public liability insurance
Solid client agreement outlining scope, responsibilities and payment terms
If you are thinking about starting your IT consulting business or want help getting your structure, accounting system or tax obligations set up correctly, we are here to help.