Bill them, or watch them come out of your advisory line. Those are the two outcomes, and one of them happens by default if nobody decides.
AML and CTF obligations applied to Australian accountants from 1 July 2026, after AUSTRAC opened enrolment on 31 March. Search for what that means and you will find a dozen compliance vendors with the same checklist: enrol, write a program, do customer due diligence, keep records, report.
All true, all necessary, and none of it answers the question a practice owner is actually sitting with. The work is real and recurring. The week it has to fit into is the same length it was in June. So who is paying for it?
The hours are not the problem. The invisibility is.
Most practices will cope with Tranche 2 the way practices cope with everything: the work gets done, by somebody, in the gaps. That is not a disaster in month one.
It becomes a disaster in month fourteen, when next year's fees are being set. Fees get set from last year's fee plus a percentage, and last year's fee did not have AML in it. So the new work is priced at zero, permanently, and the only trace it leaves is that everybody is busier and the margin is slightly worse and nobody can say exactly why.
This is the mechanism by which practices absorb cost. Not a decision to absorb it. An absence of a decision, repeated annually.
Where the hours actually come from
A week does not get longer because a statute changed. The hours have to come out of something, and they come out of the work with no deadline attached.
| Work | Has a hard deadline | What happens when the week is full |
|---|---|---|
| BAS and tax lodgements | Yes, statutory | Gets done. Always. |
| AML onboarding and monitoring | Yes, now statutory | Gets done, from 1 July 2026 |
| Year-end compliance | Yes, client expects it | Gets done |
| The quarterly advisory session | No | Moves to next month |
| The client plan you promised in March | No | Moves to next quarter |
| Reviewing which clients are unprofitable | No | Does not happen |
Nothing in that table is a judgement about what matters. It is just what a deadline does. Advisory loses every scheduling conflict it is in, because it is the only line with no external party chasing it, and Tranche 2 just added a new row to the top half of the table.
Wolters Kluwer's Future Ready Accountant found 93% of firms now say they offer advisory, up from 83% a year earlier. The AFR Top 100 data says compliance is still where most firm revenue sits. Both of those can be true at once, and the table above is how.
Three ways to pay for it, and what each costs you
Bill it as a line. A separate AML or verification fee, visible on the invoice. Easiest to defend, because the obligation is not yours and did not exist last year. Hardest conversation to have with a client you have under-charged for six years, since the new line invites a look at the whole bill.
Price it into the engagement at the next renewal. Less confrontation, and it survives into future years because the base fee goes up. Requires you to know the number before renewal, which means logging the hours from now rather than estimating them in June.
Absorb it deliberately. A legitimate choice for a client you are deliberately subsidising, or a book you intend to sell. It is only a choice if you know the size of it. Absorbing an unknown amount is not a strategy, it is a leak.
The one option not on the list is the one most practices will take, which is to decide nothing and find out at year end.
What you need before you can choose
You cannot price work you cannot see. The practices that will handle this well are the ones that can answer three questions in November rather than next July:
- How many hours did this client take last month, and in which categories?
- What is this client's gross profit once those hours are costed?
- Which clients are now unprofitable that were fine in June?
None of those is an accounting question. They are all a record-keeping question, and the record has to be kept as the work happens, because nobody reconstructs a year of hours accurately in hindsight.
This is the part Empiraa GPS is built for. Time logged against the client and the work category as it happens, retainers showing hours used against hours promised, and a gross profit and loss per client that counts the hours rather than guessing at them. It will not do your customer due diligence and it is not a compliance product. It will tell you what the due diligence cost you.
The honest version of the advice
Nobody enjoys repricing a client because the government changed a rule. It feels like passing on your problem.
It is worth remembering that the alternative is funding a statutory obligation out of the part of your practice that was supposed to grow. A client who would leave over a verification fee is a client who was already priced below what they cost, and finding that out in November is better than finding it out across the whole book in June.
Start the categories now. The conversation gets easier when you have a number instead of a feeling.
Related reading: the advisory revenue your practice already has and never bills, and tracking client time without turning it into surveillance, which is the objection most teams raise the moment you ask them to log hours by category.
See how the hours, the retainers and the client profit and loss fit together in myPortal, or compare GPS Professional Services plans.
