For many medical professionals, handling financial matters can be challenging at the best of times. But in a post-COVID world where time and resources is stretched to the limit, accountants for doctors play a pivotal role to ensure those looking after the nation’s health are able to manage their books, stay on top of accounting and tax obligations and take advantage of the latest government assistance available.
Because we know accounting services for doctors make a real difference whether you work at a hospital or run your own practice, we want to explain how the best accountants for doctors can help.
Accounting and tax compliance
Let’s start with the obvious. Tax accountants are indispensable to owners of medical practices when it comes to navigating complicated tax rules that often change. Accountants are able to prepare your tax returns, Business Activity Statements (BAS) and financial statements — then lodge them by the filing deadlines.
They’ll guide you to appropriate tax treatment in confusing areas like whether a doctor should be treated as a contractor or employee. When you think about employer obligations around PAYG withholding and superannuation contributions, the wrong classification could be costly to resolve.
Accountants can also identify when Personal Services Income (PSI) rules apply and review your PSI income. PSI rules have fundamental consequences in terms of how practice income is distributed and taxed, so it’s vital to know where you stand.
If you’re a contractor doctor, then advice around whether to operate through a limited company or as a sole trader can help you select a structure that minimises your taxes.
Your accountant will also make sure you claim all deductions you’re entitled to on your tax return, such as parking, license fees and tolls, professional indemnity insurance, tool repairs and so much more.
Since medical services is GST-free, think about the large GST refund you could potentially receive every quarter for practice management fees and other eligible items where you paid GST. The cash flow benefit of this is likely to be significant, so it’s worth let your accountant take the lead to optimise your GST position.
Many accountants — including POP Business — offer bookkeeping services to ease the burden of medical practices with voluminous transactions and records to manage. Even if you prefer to do your bookkeeping in-house, an experienced accounting professional could put in place an effective record keeping system by setting you up with accounting software.
We’ll talk more about accounting software later on, but one of its biggest benefits of is that important documents — from invoices, receipts to tax forms — can all be located centrally on the cloud and easily accessed. This makes identifying and managing your practice income and expenses quick and accurate.
Accountants for doctors provide business advice in the following areas as well.
1. Business structure