An RCTI is a recipient-created tax invoice: the recipient issues it for the supplier’s taxable supply when the GST rules allow. For a broker, it can document commission owed by an aggregator. Reconcile that invoice with the loan-level commission statement and the bank deposit before recording the receipt.
A smaller deposit can reflect a clawback, fees or a payment split. The difference needs an explanation against the issued documents, not an extra income entry to make the bank balance match.
Identify the RCTI and Its Parties
RCTI stands for recipient-created tax invoice. Where your brokerage supplies the services to the paying aggregator, your brokerage is the supplier and the aggregator is the recipient. Check the legal entities in the agreement. The individual broker’s name and the brokerage’s trading name can differ from the supplier named on the invoice.
A commission statement lists the earnings and deductions for a payment run. An RCTI documents the taxable supply and its GST treatment. One document can perform both jobs if it meets the requirements. A payment notification that only states the deposit amount does not establish a valid tax invoice.
Read the supplier details against your brokerage’s Australian business number (ABN) and the recipient details against the paying entity. If the payment comes through a different entity, ask the issuer to explain the arrangement before matching the documents.
The guide to how mortgage brokers are paid explains how upfront and trail are earned. This reconciliation starts with the amounts the issuer has reported.
Check the Agreement and Invoice Fields
Check eligibility before treating a statement as an RCTI. Under the Recipient Created Tax Invoice Determination 2023, both parties must be registered for goods and services tax (GST). The business-entity pathway also requires the recipient to determine the supply’s value. The agreement and other requirements must be met.
Section 8 requires a current written agreement specifying the taxable supplies. It must permit the recipient to issue RCTIs, prevent the supplier issuing invoices for those supplies and record both parties’ GST registration. Each party must notify the other if registration ceases. Section 9 provides a separate route for an agreement embedded in the RCTI, including acceptance and notice conditions.
Compare the issued document with your actual agreement. A generic RCTI agreement template or blank form cannot establish eligibility for your arrangement.
Use the following checks to read your invoice. They are annotations, not a universally valid RCTI template.
| Field | What to check |
|---|---|
| Document heading | Its intention as an RCTI is clear. |
| Supplier | The supplier’s identity and ABN match the entity supplying the services. |
| Recipient | The recipient’s identity or ABN identifies the entity receiving the supply. |
| Issue date | The invoice identifies when it was issued. |
| Invoice number | Use the issuer’s reference to match the payment run and prevent duplicate posting. |
| Supply description and price | The document explains the services and their amounts. Check any stated quantities. |
| Taxable amount and GST | You can identify the taxable portion and GST payable, with GST payable by the supplier. |
| Adjustment references | A correction or clawback can be traced to the original document and its adjustment record. |
The ATO’s GSTR 2013/1 tax-invoice ruling explains the tax-invoice information requirements and the additional RCTI requirements. Keep the taxable amounts separate from the payment deductions when checking the calculation.
Map Commission Lines to the Loan Book
Match each commission line to a loan and its earning period. Use the lender loan number, client reference and loan split where supplied. A client’s name alone can match several loans.
| Statement line | Record to match |
|---|---|
| Upfront | The settled loan, payment reference and commission earning period. |
| Trail | The lender loan number and the period for which trail was earned. |
| Clawback | The original upfront payment and the loan that triggered recovery. |
| Fee | The agreement or fee invoice that authorises the deduction. |
| Adjustment | The original line, reason for correction and affected earning period. |
If a loan number is missing, keep the amount as an unresolved item and request the identifier from the issuer. If one net adjustment combines several loans, request a breakdown. Do not spread an unexplained amount across the book to force a match.
Allocate recovered backdated trail to the original loan and the periods it relates to. It increases this payment run’s cash, but it does not show new loan-book growth. Keep the receipt period and earning periods visible in your reconciliation.
Once the statement is mapped, use the monthly trail-tracking routine for the continuing loan-by-loan comparison. The clawback guide explains the recovery terms behind a clawback line.
Reconcile Gross Earnings to Cash
Reconcile the commission before GST, the tax documents and the deposit separately. The following example is fictional. Assume all shown supplies are taxable at 10%, and the issuer provides the stated adjustment and fee documents.
| Item | Before GST | GST | Including GST |
|---|---|---|---|
| Upfront commission | $4,000 | $400 | $4,400 |
| Trail commission | $2,000 | $200 | $2,200 |
| Commission RCTI total | $6,000 | $600 | $6,600 |
| Clawback adjustment deducted | $500 | $50 | $550 |
| Fee invoice deducted | $200 | $20 | $220 |
| Bank deposit | $5,830 |
The $5,830 deposit equals $6,600 less $550 and $220. Net commission after the clawback is $5,500 before GST. The $200 fee is a separate expense in this example. The commission statement explains the cash calculation, while the RCTI and supporting documents explain the tax amounts.
Use these checks in order:
- Add the statement’s commission lines and match them to the RCTI’s commission total. Confirm whether each amount includes GST.
- Match each deduction to its supporting document. Keep a fee invoice separate from a commission adjustment.
- Calculate the expected deposit and match its payment reference to the bank transaction. Check for split payments or a payment still outstanding.
- Record any difference with its amount and the line or payment it concerns. Ask the issuer for the missing breakdown or correction.
Suppose the bank receives $5,720 instead. The $110 difference remains unresolved until the issuer explains it. A further documented deduction, a partial payment or an error can each produce that result. Do not record the RCTI as income and then record the bank deposit as a second sale.
Your bookkeeping method determines when income and GST are recognised. An earning-period allocation used for trail analysis does not decide the GST reporting period.
Correct and Retain the Record
Ask the issuer for a corrected RCTI or appropriate adjustment document when the tax fields or amounts are wrong. Send the invoice reference and the affected statement lines, with the amount you expected and your reason. Keep the reply with the reconciliation.
For a reversed clawback, match the credit to the original debit. Confirm the loan, original payment reference and broker allocation. Check which pay period receives the reversal so that the restored amount reaches the broker entitled to it.
Retain the original report and its corrected version. Mark which version replaces the payment record and link the correction to the original. The corrected report replaces the relevant record in your reconciliation. Count the corrected amount once, and check the system’s correction procedure before importing either version.
Section 7 of the RCTI determination requires the recipient to retain an original or copy for five years. For the brokerage’s business records, ATO ruling TR 96/7 describes five years from preparation or receipt, or completion of the transaction or acts, whichever is later. Longer requirements can apply.
Keep the agreement with the original invoice and correction history. Retain the reconciliation decision and supporting payment evidence so another person can follow why the final amount was posted.
Confirm the Final Commission Position
Finish with every loan-level difference explained or assigned to a named person for follow-up. Check that the recorded income and GST match the agreed tax treatment. An unexplained item needs an amount and a next action, even when the overall deposit matches.
After reconciling the brokerage’s gross receipt, check the individual broker’s allocated share against the remuneration agreement. Confirm the split’s calculation basis and each deduction. A correct aggregator payment can still contain an incorrect internal broker allocation.
Trail reports help identify earnings that stopped or changed. Track My Trail’s Commission Verification matches upfront payments to trail expected within two months and shows trail received without upfront. Use those exceptions to investigate the affected loans alongside the issued statements. The analysis supports the loan-level check, while your accounting records hold the invoice, tax treatment and posted receipt.
Use the broker accounting guide for the bookkeeping workflow after reconciliation. Resolve a disputed tax treatment with your registered tax agent before finalising that entry. Send the issuer a precise discrepancy list with the loan references and supporting documents for any amount still outstanding.
