🇦🇺Australia

GST Revenue Leakage in Consignment Sales

2 verified sources

Definition

Consignment sales involve complex GST treatment where the agent charges GST on their commission (typically 20% + GST) and passes the net proceeds to the owner, who may have separate GST obligations. Manual handling risks pricing errors and missed invoicing.

Key Findings

  • Financial Impact: AUD 22% commission leakage incl. GST (e.g., AUD 400 min commission); 2-5% revenue loss from unbilled services[3]
  • Frequency: Per consignment sale
  • Root Cause: Manual consignment agreements without automated GST calculation

Why This Matters

Retail musical instrument stores in Australia waste AUD 5,000+ annually on GST compliance errors in consignment processing. Automation of agreement tracking and BAS reporting eliminates this risk.

Affected Stakeholders

Store Owner, Accountant

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Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Delayed Payment Time-to-Cash Drag

7-30 days payment delay per sale; AUD 2,000+ opportunity cost at 10% capital cost for AUD 20k inventory turnover

Idle Time from Poor Repair Status Tracking

20-30% capacity loss; AUD 15,000-50,000/year in foregone repairs

Verlängerte Zahlungsziele durch interne Layby-Pläne

Logic estimate: 1–2% of annual revenue effectively lost to extra working‑capital/financing cost on layby balances (e.g. AUD 20,000–40,000 per AUD 2m turnover), plus 5–10 hours/month of admin time per store chasing payments.

Fehlentscheidungen bei Sortiment und Preis durch fehlende Layby-Datenanalyse

Logic estimate: 1–3% of annual gross margin lost due to poor pricing and ordering decisions on products frequently sold via layby (e.g. AUD 10,000–30,000 margin impact on AUD 1m gross profit base).

Lost Invoicing from Scheduling Gaps

5-10% of annual lesson revenue unbilled; AUD 5,000-20,000/year for typical school

Superannuation Guarantee Shortfalls

AUD 200+ per quarter per instructor in SG Charge (20% of shortfall + interest); typical SME shortfall AUD 2,000-10,000/year

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