Bookkeeping for Medical Practices

The most significant financial issue facing medical practices in Australia at present has nothing to do with billing software. It concerns how practitioner arrangements are treated for payroll tax. A large number of practices operate on a service entity model, where the practice provides rooms, reception and administration, and the practitioner bills patients in their own right with the practice retaining a service fee. For many years this structure was widely assumed to sit outside payroll tax.

State revenue offices, including RevenueWA, have taken a considerably closer interest in these arrangements. The question turns on the substance of the relationship rather than the wording of the agreement, and on how payments actually flow. Where patient fees are collected by the practice and then paid across to the practitioner, the arrangement may be treated as a relevant contract for payroll tax purposes, with the practice liable on those payments once the threshold is reached. Practices that have never considered payroll tax can find themselves with an exposure covering multiple years.

This is not something a bookkeeper resolves on your behalf, and we do not pretend otherwise. It is a question for your accountant or a specialist adviser. What we do is make sure your records show clearly how money actually moves through the practice, so that when the question is asked you can answer it with evidence rather than recollection. Practices that cannot demonstrate the flow of funds are in a much weaker position than practices that can.

Alongside that sits the day to day work. Medicare and DVA payments arrive in bulk and need to be matched back to individual services rather than accepted as a lump sum. Private health fund receipts settle on their own cycles. Patient gap payments arrive separately. Where these are not reconciled to your practice management system, your income records drift from reality quietly and continuously.

GST is the other recurring point. Most medical services are GST free where they meet the relevant criteria, but retail items, some cosmetic procedures and certain non clinical services are not. Coding everything the same way produces an incorrect BAS in one direction or the other.

We reconcile your funding streams, code GST correctly, run payroll for practitioners and administrative staff, and prepare your BAS. Reporting is structured so you can see the contribution of each practitioner and each service line.