It’s totally ok if you don’t have the time to learn about medical accounting or accounting methods for medical practices. Whether you’re a dentist, general practitioner, optometrist, physiotherapist, surgeon or some other medical specialist, getting support from a medical accountant is a great way to free up your time while having peace of mind that your financial health is taken care of.
With different ways of supporting you at every stage of your career, a medical accountant’s job description goes beyond preparing tax returns. Here’s how the help of a medical accounting expert can up your game.
Many healthcare professionals double up as ambitious entrepreneurs and dream of having their own practice. Whether you’re starting up a practice or buying into an existing business, you can get help from your accountant:
- Choosing your business structure. Operating as a sole trader, partnership, company or trust have different consequences in terms of tax, asset protection and risk. The right structure depends on your circumstances and preferences in each of these areas.
- Consider funding alternatives. You’ll need to know your financing options and prepare a realistic business plan and cash flow forecast. Both are vital to getting loan approval or attracting investors.
- Registering your business. You’re required to apply for a business name as well as a TFN and ABN. You’ll likely need to register for GST too.
- Being spot on with people matters. Hiring staff brings about employer obligations. Rather than spending your time researching the latest rules, your accountant can help you stay informed with payroll, superannuation guarantee and WorkCover developments.
Bookkeeping with a medical accountant
In the past, electronic tracking of financial transactions was more common in hospital accounting systems. But these days, keeping your books up-to-date through medical accounting software is affordable and accessible even for small medical practices.
A good medical accountant will help you choose the right software by considering factors like:
- the kind of revenues you have,
- your transaction volume,
- the number of staff on your payroll,
- your invoicing needs,
- and more
The trick is to avoid getting software beyond your needs because using them will likely require sophisticated skills and knowledge in accounting fundamentals for health care management, and they’ll be more expensive too.
Once you have selected the software, your accountant can help set it up and provide some training so you and your staff can maximise its functionalities for your business.
If you prefer to outsource your bookkeeping fully, cloud-based software like Xero is a top choice. With cloud software, your accountant or bookkeeper will be able to access your books at any time, from anywhere.
Xero connects to third-party apps that handle appointment scheduling, practice management and more. This way you can run and account for your business through one software solution.
Growing your business with a medical accountant
As your business grows, your medical accountant’s experience and knowledge in healthcare can help you make key decisions.
You’ll likely need to evaluate financing alternatives for further borrowing. By securing appropriate financing, you can expand your operations by moving to a bigger space with additional medical equipment, and new furniture and fittings.
A growing business usually means bringing in more staff – doctors, receptionists, nurses, etc. – necessitating research into appropriate pay rates.
Additionally, you’ll need to know the ins and outs of leases so you can know whether to buy or lease equipment. Consulting with an accountant can help you understand your cash flow situation and help you make an informed decision.
Accountants can help you forecast your cash flows too. They’ll make sure you’ve got enough cash to support your day-to-day operations. Remember, you’ll have to start meeting higher costs before money comes in from seeing more patients.
Their experience in cost accounting for health care organisations means you’ll know the metrics to track to understand the inner workings of your business.
Without ways to record, analyse and allocate costs to each patient service – which are essentials of cost accounting for health care organisations – you won’t know which services are profitable and whether your pricing covers your costs.
Whether you want to sell your practice, buy into one or admit a new partner, you’ll need your practice or your target practice valued by an independent expert.
You may also want your business valued as a part of borrowing negotiations or divorce settlement.
Some accountants will provide this specialist service, so you can have an unbiased opinion based on their knowledge and experience of valuing similar businesses.
They’ll inform you of the accounting consequences of buying or selling your operations or change of partnership, ensuring you account for these correctly and stay on the right side of the ATO.
Of course, tax compliance services are bread and butter for medical accountants. You can expect them to:
- Prepare financial statements and business and individual income tax returns
- Prepare monthly or quarterly BAS
- Handle compliance issues regarding BAS, GST, PAYG and superannuation
- Process payroll such as calculating payroll and tax obligations
A key benefit of working with a professional specialising in your field is their knowledge of claimable tax deductions. Medical practitioners often incur significant work-related expenses, and many of these are allowable deductions that can lower your tax bill.
From professional development costs to vehicle and travel expenses, there are many tax deductions you can claim. Just make sure to track your expenses throughout the year and keep your receipts.
POP Business medical accounting services
Hopefully our article has given you some insights on how an accounting professional can lighten your load and set you on the path to business and financial success.
If you’re interested to find out how a medical accountant can help you, get in touch with POP Business. We’re different from your local medical accountants nearby because we’re cloud-based. That means we can help you out without you having to travel and can provide on-demand support. Our processes are savvy, tech-driven and streamlined, which is why we can offer top-notch services at affordable prices.
We can even get you connected to Xero at a 20% discount.
So call us today on 1300 180 630 or sign up here!