As with any industry, medical centres have a number of unique bookkeeping challenges and requirements.

The majority of practices have low margins, and so it’s extremely important to be able to avoid unnecessary costs, seek out ways to increase profitability, and plan ahead. All these tasks require solid medical bookkeeping and reporting.

As the owner of a dental practice, medical centre, day surgery, or other medical business, it’s imperative you ensure your business gets its bookkeeping right – especially when you’re working with such low margins.

A professional medical bookkeeping service will help you get your business’s bookkeeping right. Not only does it keep you compliant with tax laws and requirements, it can also ensure you get the reports and data you need to increase your practice’s profitability and efficiency, and effectively plan for the future.

Medical Bookkeeping Infographic

EzyAccounts Medical Bookkeeping

At EzyAccounts, our bookkeepers understand the bookkeeping challenges and requirements commonly found in the medical industry. From choosing the right accounting system for your business, to generating and interpreting budgets and variance analysis, our medical bookkeepers know how to help your business stay in shape for the long term.

Although medical businesses may face common challenges and issues, each business is still unique. As such, our bookkeepers always tailor bookkeeping services to suit your practice’s specific needs. Depending on your preferences and requirements, we can provide on- or off-site bookkeeping.

Recently, EzyAccounts helped transform and renew this dental practice, restoring growth, reducing product waste, improving profits, and much more. If you would like the same sort of assistance and medical bookkeeping services for your practice, we can help.

Common Bookkeeping Problems For Healthcare Providers

In addition to the challenges posed by low margins, many medical businesses encounter one or more of the following bookkeeping problems:

Incorrect BAS lodgements due to mismanaged allocations of the split between GST-inclusive and GST-exclusive supplies (this can lead to problems with the tax office)
Payroll issues, such as the incorrect handling of superannuation in respect to overtime and/or bonus payments
Inadequate stocktake, which has a negative effect on your practice’s tax position
Lack of planning (or ineffective planning) due to insufficient or unreliable financial reports
Inadequate documentation to support audit trails during ATO investigations, leading to time-consuming and costly problems with the ATO

By outsourcing your medical bookkeeping tasks to an EzyAccounts bookkeeper, you can be confident you won’t face the same problems or risk the same consequences.

Medical Bookkeeping – Pre-Opening Tasks

Ideally, bookkeeping and financial reporting should occur even before your medical facility ever opens. Preparatory tasks may include identifying the best software solution for your practice, implementing stock control systems, and identifying key staff considerations.

By approaching the opening of your medical practice in this way, you will be setting the right foundations for business success.

Medical Bookkeeping For Existing Practices

If you run an established healthcare practice, it’s not too late to establish good medical bookkeeping practices, and enjoy the benefits that flow from them. By getting your books in order and implementing the right financial reporting and planning, you can set your business on the right course for current and future financial success.

Selecting The Right Medical Bookkeeping Software For Your Facility

Regardless of whether you are opening a new medical facility, or your practice is already established, it’s important to ensure you are using the right medical bookkeeping software to suit your business’s unique needs.

Once you have the right system established, it’s easier to bring your books up-to-date, and produce the right reports and data for analysis to provide direction for your business.

Most practices need medical bookkeeping software that includes point of sales (POS) and HICAPS systems. These systems provide basic management information (including sales and inventory reports) at the click of a button. Such functions provide you with information that is crucial to your survival and success, so you no longer run your business blind.

Transforming Your Business With Financial Reporting

As previously discussed, many businesses in the medical industry operate with low margins. To counteract and minimise the problems this can create, it’s important to introduce and utilise the following financial reports in your business. These reports will all be available from the medical bookkeeping software your bookkeeper advises you to use.

Cash Flow Forecasting

Cash flow forecasting on a weekly or even daily basis can be of great benefit to any business with low margins. Cash flow forecasting on a weekly basis helps you to plan ahead for occasions during the month when cash can become tight before easing later in the month. This ensures you are able to pay your employees and suppliers in a timely manner.

Your bookkeeper can advise you on whether weekly or daily cash flow forecasting will best meet your practice’s needs.

Cost Control With Budgeting & Variance Analysis

In order to meet your target profit ratios, it’s important that you keep your medical practice’s costs to a minimum. A budget and variance analysis allows you to do this.

Budgeting involves planning your costs and allocating appropriate monies. You can then use a variance analysis to identify and analyse any variations from this plan.

For smaller medical practices, we recommend you use a monthly budget and variance analysis. For larger practices, we often recommend a weekly variance analysis, as this allows you to take action immediately if any cost category is awry. Your bookkeeper will help you determine which frequency is appropriate for your practice.

Payroll & Scheduling

Staff scheduling is an art form. But in an industry that’s notorious for patient waiting times, it’s imperative your medical practice gets this right.

That said, staff scheduling isn’t just about patient wait times. It also has a huge impact on other areas of your business. Scheduling and paying too many staff can create unsustainable overheads and diminish or wipe out your profits. However, too few staff can mean services aren’t delivered in a timely manner, and lead patients to turn to other healthcare providers.

On top of all this, there’s also the issue of staff working overtime. In any medical practice, staff are frequently required to work extra hours in order to ensure patients are properly cared for. In addition to concerns about profits and overheads, this creates the additional problem of ensuring you correctly apply penalty rates and superannuation to overtime payments, keeping your business ATO compliant.

By utilising a professional medical bookkeeping service to assist you with payroll and scheduling, you can be confident your practice will be better prepared to handle and mitigate all of these common staffing and compliance challenges.

Inventory Management

In the healthcare industry, it’s important to tread the balance between having adequate medical supplies and other stock on hand, and avoiding high volumes of stock going to waste because they’ve reached their use-by dates.

Inventory management allows you to accurately predict and manage your stock requirements, while also managing stock on hand to minimise unnecessary waste by using a first in, first out rotation.

To achieve this, your practice needs easily accessible stock rooms, and bookkeeping software with inventory management features that provide accurate stock on hand reports. You should also undertake frequent stock takes to ensure the accuracy of your stock reports.

Your Medical Practice

Do you need a medical bookkeeping service that’s tailored to your practice’s unique needs and requirements? We would love to talk to you about how we can help your medical practice stay compliant with the tax office, and utilise financial reporting to increase profitability and efficiency. To discuss your practice’s unique needs, call EzyAccounts today on 1300 313 397. We look forward to hearing from you!

Recommended Packages

We recommend the following medical bookkeeping packages for practices of different sizes. (For a tailored recommendation, contact us today.)

0-5 Employees

• Monthly bookkeeping (on- or off-site)
• Full payroll management
• BAS lodgement
• Rolling 12 month cash flow forecasting, showing monthly monetary movements
• 12 month forecasted budgeting, with monthly variance analyses
• Monthly sales analysis to facilitate inventory management

6-20 Employees

• Weekly bookkeeping (on- or off-site)
• Full payroll management
• Staff scheduling assistance (if required)
• BAS lodgement
• Rolling 12 month cash flow forecasting, showing weekly monetary movements
• 12 month forecasted budgeting, with weekly variance analyses
• Monthly sales analysis to facilitate inventory management

21+ Employees

• Weekly bookkeeping (on- or-off site)
• Full payroll management
• Staff scheduling assistance (if required)
• BAS lodgement
• Rolling 12 month cash flow forecasting, showing daily monetary movements
• 12 month forecasted budgeting, with weekly variance analyses
• Weekly sales analysis to facilitate inventory management

To discuss an appropriate medical bookkeeping package for your practice, call EzyAccounts today on 1300 313 397.