Bookkeeping for medical and allied health practices.
GPs, specialists, dentists, physios and allied health owners: your billing is unlike any other industry's, and your books should be kept by people who know it. Weekly reconciliation, clean splits, calm BAS.
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The bookkeeping a practice actually needs.
Practice software reconciled
Billings, Medicare, gaps and timing differences balanced to the bank weekly - the reconciliation most generic bookkeepers never quite get right.
Practitioner splits
Percentage, service-fee or sessional models calculated from reconciled numbers and documented so every statement stands up.
GST-free and taxable streams
Medical services, reports, cosmetic work and room rental each mapped correctly, so the BAS is right by construction.
Practice payroll
Clinical support and admin staff on the right awards, payday super on every run, practitioner arrangements kept cleanly apart.
Service entity discipline
Intercompany flows recorded consistently and cleanly - the bookkeeping that lets your structure do its job.
Reporting owners read
Practice performance by practitioner, by day, by revenue stream - insight, not just compliance.
Where practice books quietly go wrong.
Practice files break in a small number of predictable places. Two of them can cost real money years after the fact, and none of them look urgent while they are happening.
Service agreements that behave like employment
State revenue offices have been applying the relevant contract provisions of payroll tax law to practices that engage practitioners under service agreements, and several rulings have treated the practitioner's share of patient fees as taxable wages. The pattern that draws attention is the flow of money: the practice collects the patient fee, keeps a percentage and pays the balance out. Where an arrangement sits is a question for your accountant or a lawyer. What your books decide is what an assessor sees when they come looking.
GST-free applied to everything
Most medical and allied health services are GST-free, so GST-free quietly becomes the default tax code on all income. It should not be. Cosmetic procedures that attract no Medicare benefit, medico-legal reports, some employer-requested and insurer-requested reports, room hire charged to another practitioner and anything sold from the front desk can all be taxable. One default set wrong in the practice software repeats across every invoice until somebody checks it.
The Medicare deposit that never quite matches
Benefits arrive in batches, not per patient. Some items are rejected, some sit pending, and DVA runs to its own timetable. Coded straight to income the moment it hits the bank, a rejected item simply vanishes - nobody reworks it and nobody rebills it. Run through a clearing account and reconciled against the payment report, the gap between claimed and paid stays on the screen every week.
Three payments for one consultation
A patient with cover pays a gap on the terminal, the fund settles its benefit through HICAPS overnight, and the practice wears a merchant fee on both. One appointment, several bank entries, different days, all net of fees. Where the lot lands on a single revenue line you cannot separate fund income from patient income, the fees stay buried inside revenue, and the practitioner split is being worked out from a number that has already had money taken off it.
Splits calculated off the wrong base
A percentage of billings raised and a percentage of receipts banked are different numbers, and the difference is rejections, write-offs, bad debts and merchant fees. If the agreement does not say which one applies, or who wears the fee on a rejected item, the practice renegotiates it quietly every month. Most practitioner disputes we are called into are not about the percentage. They are about the base it was applied to.
One profit and loss for five practitioners
Without tracking categories, a practice with several practitioners and multiple rooms produces one blended result. Nobody can see which room pays for itself, which practitioner carries the reception cost, or what the newest hire actually contributed after consumables and their share of the software. Revenue and direct costs split by practitioner, with shared overhead allocated on a basis everyone agreed to in advance, turns a recurring argument into a report.
What the first month looks like.
The income side comes first. Until billings, benefits, gaps and fees are reconciled against each other, every other number in the practice is an estimate wearing a decimal point.
- 01
Look at the file
A free health check across your Xero file, your practice management software and a sample of recent practitioner statements. You get a straight account of where the reconciliation is breaking and what it looks like it has cost, before you commit to anything.
- 02
Rebuild the income side
Clearing accounts for Medicare, DVA, fund settlements, gap payments and EFTPOS, each reconciled against the payment report behind it rather than the bank line in front of it. Merchant fees pulled back out of revenue. Tax codes mapped stream by stream so the BAS comes out right by construction.
- 03
Make the splits defensible
The calculation basis written down and agreed - receipts or billings, what comes off the top, how consumables and rejected items are treated. Then statements produced from reconciled numbers that a practitioner can check line by line. The conversation gets much easier once the arithmetic is not in dispute.
- 04
Keep it running
Weekly reconciliation, payroll for clinical support and admin staff with payday super, BAS lodged on agent deadlines, and reporting by practitioner and revenue stream. Where the payroll tax question is live, your file is kept so your accountant can answer it from records instead of estimates.
Frequently asked questions.
Can you reconcile our practice management software to Xero?
Yes - billings from your practice software, Medicare and gap payments through the bank, and the inevitable timing differences between them, all reconciled on a weekly rhythm. That reconciliation is the heart of practice bookkeeping.
How do practitioner splits work in the books?
Calculated accurately from reconciled billings and documented clearly, whatever your model - percentage splits, service fees or sessional arrangements. Practitioners trust statements that add up.
Is our billing GST treated correctly?
Most medical services are GST-free, but practices usually have taxable streams too - reports, cosmetic work, room rental. We map the codes so each stream lands correctly on the BAS.
Can you run practice payroll?
Yes - nurses, reception and admin staff paid under the right awards with payday super on every run, and practitioner arrangements kept cleanly separate from employee payroll.
Our structure involves a service entity. Does that change the books?
It changes everything about how they must be kept - intercompany flows and service fees need clean, consistent recording to hold up. We keep the bookkeeping tight and work alongside your accountant on the structural side.
Should we be worried about payroll tax on our practitioners?
It is the most live issue in practice finance at the moment. Revenue offices in several states have applied the relevant contract provisions of payroll tax law to service agreements between practices and practitioners, and payments everyone had treated as the practitioner's own income have been assessed as wages. Several states have since announced relief or transition arrangements for general practice, and the detail differs state by state. This is a legal and structural question, so it sits with your accountant or a lawyer. What we do is make sure the flow of money through your file is recorded consistently and matches what your agreements actually say, because an assessment gets built out of exactly that.
Which practice management software do you work with?
Cliniko, Halaxy, Best Practice, Genie, Gentu and Zedmed come up most often. Some connect to Xero directly, others need a scheduled export. The connection matters less than what happens at the other end: billings raised in the practice software have to land in a clearing account and be reconciled against Medicare, fund and gap payments, because those two systems will never agree on the same day.
Can each practitioner see their own numbers?
Yes. Tracking categories in Xero carry revenue and direct costs by practitioner, so consumables, sessional room time and their own support hours sit against them. Shared overhead like reception, rent, software and insurance gets allocated on a basis you set in advance - usually revenue share, clinical hours or rooms used. Agreeing the basis before anyone sees the result is what stops it turning into a negotiation.
How should new equipment finance be recorded?
It depends what you signed. Under a chattel mortgage you generally claim the GST on the full purchase price in the period you acquire the asset, and each repayment splits into principal and interest. Under a lease the GST comes through with the payments instead. Practices often have several agreements running at once across chairs, imaging and fit-out, and treating one like another puts the BAS out for the life of the agreement.
No cost, no obligation
Books as precise as your practice.
Talk to a bookkeeper who knows medical billing. 07 3899 8311, or book a free consultation.