Importing is a cash business disguised as a margin business. You pay a deposit when you place the order, the balance when the goods ship, then duty and GST when they land, then freight and warehousing. Your customer pays you 30 to 60 days after delivery, if they pay on time. In between, the exchange rate has moved twice. A wholesaler can grow sales by 30% and run out of money doing it.
The accounting has to keep up with all of that. Here is how we do it.
What goes wrong for importers and wholesalers?
- No true landed cost. The supplier invoice goes to stock, but freight, duty, broker fees, insurance and port charges go straight to expenses. Gross margin looks great; net profit doesn't, and nobody knows which products actually make money.
- Currency eating the margin. You priced the range at one exchange rate and paid at another. The difference is buried in "bank fees" or not recorded at all.
- Cash gaps on every big order. Deposits and balances go out months before customers pay. A large seasonal order can drain the account.
- Import GST that's wrong on the BAS. GST paid at the border is missed, claimed twice, or claimed using a broker's invoice instead of the import declaration.
- Stock that hides problems. Slow-moving lines sit at full cost on the balance sheet for years, inflating profit and tax.
What do we do for importers and wholesalers?
| Area | What we do |
|---|---|
| Landed costing | Freight, duty, broker, insurance and port costs allocated to each shipment and product, in Xero or your inventory system |
| Multi-currency | Supplier invoices booked in their currency, payments matched at the actual rate, realised FX gains and losses recorded correctly |
| Import GST | Import declarations matched to BAS claims, deferred GST reconciled each month |
| Inventory | Stock counts reconciled to the ledger, slow-moving stock reviewed, year-end valuation for tax |
| Working capital | Cash conversion cycle reported monthly, purchasing and credit terms reviewed |
| Funding | Trade finance and debtor finance needs modelled before you approach a lender |
| Compliance | Monthly or quarterly BAS, payroll, company and trust returns |
Our transaction coding agent suggests account codes and GST treatment for unreconciled lines and flags the ones it's unsure about. Our BAS pre-lodgement check agent catches GST coding and label errors before a BAS is lodged. A qualified accountant reviews every BAS before lodgement.
How should landed cost be worked out?
Landed cost is everything it costs to get a product onto your warehouse shelf, ready to sell. Here is a simplified example for a single container.
| Cost | Amount | Basis of allocation |
|---|---|---|
| Supplier invoice (US$40,000 at 0.65) | $61,538 | By product value |
| International freight and insurance | $5,200 | By volume or weight |
| Customs duty (say 5% of customs value) | $3,077 | By product, at each product's duty rate |
| Customs broker and port charges | $1,450 | By value or by line |
| Local cartage to warehouse | $850 | By volume |
| Landed cost (excluding GST) | $72,115 |
The goods cost $61,538 at the supplier. They actually cost $72,115, about 17% more. A product priced at a 40% margin on the supplier cost is making far less than that on the real cost. Import GST is not part of landed cost if you can claim it back.
Duty rates vary by product classification, and free trade agreements can reduce duty to nil if you hold the right origin documents. Duty also depends on the customs value, which has its own rules. Check the classification with your customs broker, and check our numbers against the import declaration.
Which KPIs should an importer or wholesaler track?
| KPI | What it shows | How it's worked out | Watch for |
|---|---|---|---|
| Gross margin on landed cost | Real product profitability | (Sales − landed cost of goods sold) ÷ sales, by product and customer | Lines below your overhead recovery rate |
| Stock turn | How fast stock sells | Cost of goods sold ÷ average stock at landed cost | Slowing turn on lines you keep reordering |
| Days inventory outstanding | Days of stock on hand | Average stock ÷ cost of goods sold × 365 | Rising before a big order |
| Debtor days | How fast customers pay | Debtors ÷ sales × 365 | A few large customers stretching terms |
| Creditor days | How long you take to pay | Trade creditors ÷ purchases × 365 | Deposits make this shorter than it looks |
| Cash conversion cycle | Days your cash is tied up | Inventory days + debtor days − creditor days | Growing as you grow |
| FX impact on margin | How much currency moved profit | Realised FX gains/losses ÷ gross profit | Unhedged exposure on large orders |
The cash conversion cycle is the number that predicts trouble. If it's 120 days and you double sales, you need roughly double the working capital to fund the same cycle.
Which tax and compliance issues are specific to importers?
GST on imports and the deferred GST scheme
GST on imported goods is generally 10% of the value of the taxable importation, which includes the customs value, duty and the cost of international transport and insurance. Normally it's paid at the border before the goods are released, and you claim it back on your next BAS. That can mean funding the GST for weeks or months.
Under the deferred GST scheme, eligible importers report and pay import GST on their monthly BAS instead, with the credit on the same BAS, so the cash cost is close to nil. Per the ATO, you must have an ABN, be registered for GST, lodge monthly, and lodge and pay electronically, and your lodgements and payments must be up to date. The deferred amount is pre-filled at label 7A, and you claim it at label 1B. We check the scheme's figures against your import declarations every month.
Customs duty and import declarations
Goods over the low-value threshold need a full import declaration, usually lodged by your customs broker. Duty depends on the tariff classification and the customs value, and may be reduced under a free trade agreement if you hold valid origin documents. Some products carry anti-dumping duties. Duty is a cost of the stock, not a general expense. Errors found later can be corrected with Australian Border Force, sometimes with a refund.
Foreign exchange gains and losses
When you book a supplier invoice in US dollars and pay it later at a different rate, the difference is a realised foreign exchange gain or loss, generally taxable or deductible. Converting money in a foreign currency account also realises gains and losses. Unrealised movements on balances still open at year end are generally not taxed until realised. If you use forward contracts to hedge, the accounting and tax treatment need to line up.
Trading stock at year end
For tax, each item of trading stock can be valued at cost, market selling value or replacement value, and you can choose item by item. That lets you write down obsolete or damaged stock to what it would fetch, provided you can support the value. Cost must be full absorption cost, including freight and duty.
Losses and the new loss carry-back
Wholesalers can have a bad year after good ones, often because of currency or a customer failure. Under the Tax Reform No. 2 Act 2026, which is law, companies with aggregated turnover under $1 billion can carry back revenue losses from income years starting 1 July 2026 against tax paid in the two prior years, limited by the franking account balance. That turns a loss into a cash refund when it's needed most.
How should importers fund working capital?
Funding an import cycle with an overdraft or the owner's mortgage is common and expensive in a different way: it puts the family home behind the business. The usual options are:
| Option | Fits | Watch for |
|---|---|---|
| Trade finance (import loans) | Funding supplier payments until goods are sold | Short terms; the lender usually wants clean, current financials |
| Debtor finance | Turning invoices into cash quickly | Cost, and customers seeing the arrangement |
| Supplier terms | Negotiating balance on arrival instead of on shipment | Price trade-off |
| Overdraft or business loan | Steady, predictable needs | Personal guarantees and security |
| Retained profit | Long-term base | Requires tax planning so cash isn't distributed and then needed back |
A lender will want a forecast showing when the money goes out and comes back. Our cash flow forecast agent builds a monthly three-way forecast from your order pipeline; your accountant reviews it before it goes to the bank.
Which structure suits an importing business?
Most importers trade through a company, often owned by a family trust. Limited liability matters because you sign supply contracts, carry product liability risk and give warranties. If you own the warehouse, holding it in a separate entity keeps it away from trading creditors. Our guide to sole trader vs company vs trust compares the options, and our business structures team handles the setup.
How do we work with importers?
- Free strategy call about your supply chain, currencies, systems and cash pressure points.
- Landed cost and stock review. We rebuild landed cost on recent shipments and reconcile stock to the ledger.
- System set-up. Multi-currency in Xero, landed cost workflows, links to your inventory system, deferred GST if it suits you.
- Monthly. Books current daily, monthly BAS if needed, margin by product and customer, cash conversion cycle and forecast.
- Year end. Stock valuation, FX review, returns lodged, tax planned before 30 June.
Everything runs on Nagaris. Questions about a shipment arrive by SMS or email; you reply with a photo of the paperwork. The AI agents draft; qualified accountants review and sign off.
What does it cost?
Importers with steady volumes usually choose Business Insights (from $249 per week + GST) for payroll, monthly reports and KPI analysis. Businesses managing big seasonal orders or bank funding often choose the Fractional CFO plan (from $499 per week + GST) for forecasting and a monthly strategy meeting. See our pricing page.
What should you send us?
- Last two years' financial statements and tax returns
- For three recent shipments: supplier invoice, import declaration, freight and broker invoices
- Aged stock report and your last stock count
- Bank and foreign currency account statements, and any forward contracts
- Debtor and creditor ageing reports
- Supplier and customer payment terms for your largest relationships
- Any finance facility agreements
If you also sell online, our page for ecommerce businesses covers marketplace and platform accounting. For the full list of BAS dates, see BAS due dates.
Frequently asked questions
Is customs duty part of the cost of stock?
Yes. Duty, freight, insurance, customs broker fees and other costs of getting goods to your warehouse are part of the cost of the stock, both in your accounts and generally for tax. They're expensed as the stock is sold, not when the bills are paid. Coding them straight to expenses distorts both margin and stock value.
Can I claim back the GST I pay on imports?
Generally yes, if you're registered for GST and import the goods for your business. Without the deferred GST scheme you pay GST at the border and claim it back on your next BAS; with it, the GST and the credit appear on the same monthly BAS. You need the import declaration and proof of payment as your record, not a supplier tax invoice.
How is foreign exchange taxed?
Realised gains and losses on foreign currency, such as the difference between the exchange rate when you booked a supplier invoice and when you paid it, are generally assessable or deductible under the forex rules. Unrealised movements on open balances are usually not taxed until realised, although some elections change that. Your bank's multi-currency account also creates realised gains and losses when you convert.
Do I need to switch to monthly BAS to use deferred GST?
Yes. The ATO requires deferred GST participants to lodge monthly and lodge and pay electronically. A switch from quarterly takes effect at the start of the next quarter. Monthly lodgement is more work, but for regular importers the cash benefit usually outweighs it.
What happens if I buy from a related company overseas?
Prices between related parties across borders must be arm's length under the transfer pricing rules, and customs has its own valuation rules for related-party transactions. Keep documents showing how the price was set. Larger groups also have reporting obligations that smaller importers don't.
Official sources
General information only, current as at 18 October 2026. It is not personal tax, legal or financial product advice and doesn't take your circumstances into account. Talk to us before you act. Where a recommendation needs a licensed financial adviser or a solicitor, we work alongside them.