Showing posts with label medical accounting. Show all posts

How Can Reliable Medical Accounting Help You Out?

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If you’ve been operating a private medical practice for some time, then you know how stressful it can be to worry about earning money and managing costs. Indeed, Dr. Danielle Clode (2004) said that these concerns are two of the most severe stressors general practitioners in Australia grapple with today. Rather than shoulder most of the bookkeeping, why not work with reliable medical accountants to lend you a hand?

The core of a medical accountant’s duty is to gather and analyse financial information from your practice, which they will then use to create accurate financial reports and help you make business decisions. This information isn’t easy to come by, considering that different practices have different methods of earning income and different expenses, which in turn means different financial reports. For example, some practices charge per session, while others require a fixed facility fee from their patients.

Your method will give medical accountants an idea of whatever tax credits, rebates, etc. you may be qualified for. It is also their duty to ensure that your financial documents are correct and up to current industry standards. This will protect you from unforeseen tax liabilities, which can also stress you out, and instead allow you to focus more on making money and managing overhead costs.


When Can Doctors Claim GST Credits?

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Running a medical practice has a lot in common with operating other businesses. For example, you have to hire a staff and prepare their payroll. You also have to deal with overhead costs, such as office space rental, utility bills, inventory supply costs, and the like.
Of course, one can’t forget about taxes, which all doctors are obligated to pay. Fortunately, they can claim goods and sales tax (GST) credits when they purchase items that will be used in the conduct of their business. The following conditions must be met though:

You Must Be Registered
You can’t claim GST credits if you are not GST-registered. The Australian Tax Office (ATO) has made this easier though; aside from the standard pen-and-paper method, you can now also register online, over the phone, or through a registered agent.

Purchase Price is GST Inclusive
If the item you purchased already includes GST in its price, you can claim the GST as a credit. Note, however, that you need a tax invoice as proof of this, and the invoice must explicitly state that the price is GST inclusive. Fortunately, suppliers are required to provide tax invoices for most purchases worth $82.50 and above.

You’re Paying for It

You can’t claim GST credits for something you didn’t buy. For example, you can’t claim a credit for a PC someone else bought and gifted to you even (though it will be used as an office computer).

Types of Accounting Help for the Medical Field

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Medical establishments, like any other business entity, need sound accounting practices to keep them running. Fulfilling this need is considered a top priority for large hospitals, most of which possess enough resources for an in-house accounting department. Sadly, this isn’t the case for smaller-scale clinics, which turn to outsourcing accounting services. Here are some of their most common forms, along with brief descriptions.

Private accountants. These professionals often have multiple clients, and are trained on special accounting considerations concerning the medical profession. One such factor is detailed cost accounting, which typically deal with keeping patient bills constant with the rising costs of acquiring and maintaining medical equipment.

Accounting firms. They practically serve as a small clinic’s accounting department, and provide specific services tailored to meet their clients’ needs. These may include billing, payables, receivables, and the production of cash flow statements or monthly/annual financial reports.

Part-time accountants. Clinics can also hire accountants on an hourly basis, who work within the premises at frequencies ranging from a day or two per week. Their services typically don’t differ with the first two, only the work shift does.

Tax consultants. These professionals specialise in the preparation of annual tax returns, and giving out tax advices. As the saying goes, taxes are one of the most certain things in this world, and medical establishments are not exempted from taxation, regardless of their valuable services to people.

Tips for a Successful Medical Practice

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People assume that a medical degree guarantees a big income for doctors. In reality though, doctors—like everyone who earns a living—must work hard to earn money.

This is especially true for those who open their own practices. While they enjoy perks like being their own boss and deciding how many patients to see each day, they also don’t have the fixed salary that doctors working in hospitals have.

If you’re planning to open your own practice, you’re probably aware of the challenges mentioned above. To help your business thrive, below are a few tips to consider:

Start as a “Micropractice”
If you open a practice, chances are you’ll be hiring a support staff too. Before doing so, however, ask yourself how many people you really need. Remember, the more employees you have, the more salaries and benefits you have to pay—and the less income you get to take home. Consider starting a Micropractice instead, which operates with a bare-minimum staff to reduce overhead costs.

Brand Yourself
It’s unlikely that you’re the only medical practice in your town or city. Therefore, decide what’s different about your practice and market your unique selling point to prospective clients.


Keep Your Books in Order
Keeping your financial records tight is vital to tracking how profitable your practice is—though you may not have the time or experience to do the number crunching yourself. Fortunately, many firms offer medical accounting services to doctors.  

The Importance of Hiring a Medical Accountant

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When most people think about the difficulties of being a doctor, they think of elaborate surgeries or complicated differential diagnoses. What many of these doctors fail to consider though when difficulties come to mind are their finances. Some doctors may be able to read medical textbooks from cover to cover, but when it comes to tax minimisation strategies or tax returns, they come up short.

Unlike most people, Aussie doctors are self-employed. This means these physicians do not have the luxury of having an accounting staff deduct their taxes from their earnings. While obtaining a full income might sound like a dream come true to most of these health practitioners, having to compute incomes and deductibles to file taxes is no walk in the park.

As such, it is important for doctors to manage their accounts properly to ensure they are paying the right amount of taxes every year. One misstep can lead to an unwarranted audit and an unwanted visit from the Australian Tax Office. In a worst-case scenario, a physician can even be charged with tax fraud.


Fortunately, such a grim scenario can be avoided by hiring a trusted medical accounting service. These accounting experts specialize in the needs of medical professionals in particular, allowing the latter to stay focused on their duties and responsibilities as doctors. Whether for your personal or your practice’s accounting needs, do not hesitate to enquire an experienced medical accountant about concerns you may have.

Benefits of Medical Accounting to Your Practice

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Regardless of what your specialization is, your medical practice is reflective of your ability not only as a professional but also as a manager and proprietor. However, since not every medical practitioner is well-versed in accounting and finance, it’s still important to hire a reliable medical accountant to help your practice.

You have already invested time, effort, and money into your private practice. As much as possible, you should try to keep it sustainable for the benefit of your patients, especially since most Australians are said to rely on their family doctors for up to four generations. If you’re having trouble with your medical accounting obligations, consider hiring a medical financial services provider so you can focus on treating your patients.

By turning to experienced financial advisers who specialise in the medical field, you can explore options that will work for you as a medical practitioner. You can manage your financial well-being as a doctor and as a sole proprietor of your practice successfully with the help of skilled professionals. As a result, you can manage your assets better, specifically your loans, investments, and insurance.

Since maintaining your practice is similar to running a business, your service provider will be able to help you conduct effective financial planning in terms of compliance, taxation, and other accounting strategies. In turn, you can enjoy financial stability while attending to the needs of your patients. This will help your practice become resilient amidst constant change within the government and the medical industry.

What is Income Protection for Doctors?

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Doctors are exposed to all sorts of dangers in the practice of their profession. With the possibility of contracting a serious illness or suffering a debilitating injury while on the job, doctors are often faced with the danger that something might happen that may cost them the ability to perform their jobs properly—putting their incomes at risk as well.

Income protection for doctors will allow them to receive a regular income in the event that they become incapacitated. With this type of insurance, a doctor should be able to maintain his quality of life in spite of his inability to continue his practice. It also provides protection to the physician’s family who has become dependent on his income.

Income protection might often be compared to critical illness insurance, however, there are differences. Unlike critical illness insurance, income protection does not provide the insured with a lump sum payment. This feature means that the insured will continue to receive protection throughout the duration of the insured’s incapacitation, or until the insured no longer suffers a loss of income, the policy ends, or the insured dies.


Unlike critical illness insurance, income protection is only designed to cover the insured until he reaches a given age. Typical options are 50, 55, 60, and 65, but some insurers are able to provide options that will protect the insured until he turns 70.

Importance of Medical Accountants

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Service-based offices such as hospitals and medical practices will inevitably keep records of all transactions made with patients, health insurance providers and other practices. This is done so that accounting expenses and profits will be easily computed using correct and updated patient records and accounting records.

However, not all doctors and medical practitioners have the ability and the time to record all transactions, update records, and perform all accounting tasks. Hiring a medical accountant relieves medical professionals of the burden of taking on administrative responsibilities. Doing so also ensures that all areas of accounting are covered by certified professional accountants.

Accounting firms that focus on helping medical practitioners and private practices offer a range of services which include:

  • Accounting and bookkeeping services
  • Workers compensation audit and review
  • Consultation and creation of new employee benefits packages
  • Payroll services
  • Retirement planning including pensions, retirement investment plans, and annuities
  • Maximizing earnings using sound strategies
Most accounting firms take into account the unique needs and various demands of clients from the medical community. This is why many of their services are tailored to address these demands so that their clients don’t have to spend time doing administrative tasks, allowing them to focus on their practice and their patients instead.


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