Matter-Based Billing for Conveyancing Practices in Melbourne

Professional Fee vs Disbursements: Two Different Things

A conveyancing matter's total invoice usually combines two very different components: the professional fee, the practice's charge for doing the work, and disbursements, third-party costs incurred on the client's behalf during the matter, title searches, council and water authority certificates, and PEXA lodgement fees among them. The professional fee is genuine revenue to the practice. Disbursements are a pass-through, reimbursed at cost, and shouldn't be treated as, or marked up as, additional income.

Reconciling Against the PEXA Settlement Statement

Where the professional fee is deducted directly from settlement funds through PEXA rather than invoiced and collected separately, the amount received needs to reconcile exactly against the PEXA settlement statement, not simply against whatever lands in the business bank account. Any variance between the two, a fee adjustment, a disbursement recorded differently than expected, needs to be identified and explained at the time, not left for a bulk reconciliation weeks later when the specific matter details are harder to recall.

Setting Up Matter-Level Tracking Correctly

• ✓ Assign a unique matter or job code to every file at intake
• ✓ Track disbursements against that matter code in the trust ledger as they're incurred
• ✓ Record time spent against the matter, even under a fixed-fee model, to measure true profitability
• ✓ Reconcile the final invoice and PEXA deduction against the matter's settlement statement
• ✓ Review matter-level profitability quarterly, not just total practice revenue

Why Fixed Fees Hide Unprofitable Matters

A fixed professional fee makes sense for a standard, predictable matter, but complex matters, unusual title issues, difficult negotiations, delayed settlements, can consume significantly more time than a standard file without the fee changing to reflect it. Without time and disbursement tracking at the matter level, this pattern is invisible in a practice's overall numbers, since a handful of unprofitable complex matters can be masked by a larger volume of straightforward, genuinely profitable ones.

GST Treatment on Fees and Disbursements

Standard 10% GST applies to the professional fee component of a conveyancing service. Disbursements passed through at cost are generally treated as a reimbursement rather than a separate taxable supply, though the correct treatment can depend on exactly how the original disbursement was incurred, and is worth confirming with your accountant to ensure BAS reporting reflects the right GST position on each component.