“When Your Accountant Doesn’t Get General Practice…"

Practice Manager Roxanne S. recently wrote?on LinkedIn

“When Your Accountant Doesn’t Get General Practice…”

“There’s nothing more frustrating than working with an accountant who doesn’t understand how a medical practice operates. General practice isn’t just another business—it’s highly regulated, with specific grants, Medicare complexities, and funding opportunities that can make or break a practice.”

I have decided to respond to her excellent question. It was one of the reasons I became an accountant after my later father, a doctor, and his friends encouraged me to start my national firm in 1992. So with Roxanne’s support here is my take.

Tick and Flick or Assumption Accounting?! | Expert Healthcare Financial Solutions

A GP/Medical and Healthcare tax accountant should be critical in supporting practices. These specialists go beyond traditional accounting services, providing tailored financial solutions that address the unique challenges and complexities of the healthcare industry.?

From my over 33 years of national experience as a Chartered Accountant to medical and healthcare practices working with similar experienced specialists, accountants can show you at the first consult how to ethically become more viable and protect your assets and practitioners.?

Trustworthy financial advisers who offer value for money, ethical guidance, and reliable holistic evidence-based recommendations exist.?Your adviser must be across the detail.

Unfortunately, many people don't allocate the time or attention to consider their advice until it's too late, carefully.?

This oversight often results in ten times more expensive issues to resolve, typically triggered by a dispute or an audit. By then, the cost of inaction has compounded significantly.?

As my late medical doctor father once wisely said, 'penny wise, pound foolish'—a phrase that aptly captures the shortsightedness of neglecting sound advice, only to face far greater expenses down the line.

Are Low Fees a Reliable Indicator?

Relying on low-cost, superficial 'tick and flick' accounting methods or those based on assumptions can result in a high rate of non-compliance.

While having an accountant sign off on your books may provide a false sense of security, it doesn't guarantee accuracy. As many have found with the GP payroll tax saga, the fact that a professional has reviewed your accounts doesn't automatically make them correct.

However, depending on your engagement terms, you may have the right to seek legal recourse if the accountant has made errors in their work.

This approach often combines with a mindset that the lower the fee, the better the accountant, when in reality, the opposite is likely true. This can increase the risk of a life-changing tax audit for you and your practitioners. It only takes one AI-driven ATO data matching audit to trigger a significant problem, so you must consult specialists.?

As the saying goes in general practice, prevention is better than cure.

The savvy practices realise that a low fee is no longer a reliable quality indicator for accounting services. The advice of a skilled accountant should generate value that exceeds their fee by 5 to 10 times. If not, you should not change your adviser.

Like Roxanne S. posts, difficult questions are often met with no proactive response, or we don’t know, or other firms are scaremongering.?It becomes a circular can kicking exercise.

Real experts do not have to charge a fee for a first consult to answer your tricky question. They are usually very generous with their information, and allow you to test them. We always encourage potential clients to return to your accountants and legal advisers first.?

Experts provide 100% Accounting, Tax and Legal Evidenced-Based Clarity

Most importantly, experts do not sit on the fence. They demonstrate a full-time and not just a part-time commitment to your industry-specific healthcare sector and not for example, farms and coffee shops.

Experts can provide 100% evidence-based clarity on a complex issue. They have been through and have successfully won audits such as payroll tax on GP services.

This is what you should be testing for.?

Your time is valuable and you cannot afford to make an irreparable mistake that damages your reputation.

Specialised Knowledge

Experienced GP, Medical and Healthcare accountants possess in-depth knowledge of:

• Medicare complexities and billing requirements - 100% Medicare Bulk Billing incentives, Pip’s SIP, WIP’s, SWPE’s, DPA, Visa free, tenant doctor and Monash Modelling arrangements, free GP benchmarks ?
• Industry-specific grants and funding opportunities
• Healthcare regulations and compliance issues
• Payroll tax, Superannuation, GST implications for medical and healthcare practices
• Automated tax-tested bookkeeping and accounting software solutions, e.g. Doctors Pay Calculator?

Key Services

• Financial Management: They help set up effective GP benchmarked and tested financial systems tailored to practices, ensuring accurate record-keeping and reporting.
• Tax Planning:? Working with specialised medical and health tax lawyers, GP accountants optimise tax strategies specific to healthcare providers, including navigating complex ATO rules for the industry, e.g., tax-tested compliant non-contractor arrangements for Tenant Doctor.
• Compliance: They assist with payroll compliance, including Single Touch Payroll systems and fair work regulations.
• Strategic Advice: These specialists offer insights on practice growth, expansion planning, and investment opportunities aligned with healthcare business models.

Benefits of Specialised Medical and Healthcare Accounting - “Eat Well Sleep Well”

• Improved Accuracy: Accountants enhance the organisation and accuracy of financial records with the latest tested optimal business and compliance test arrangements, which is crucial for informed decision-making, practitioner recruitment, and retention.
• Time-Saving: They enable medical and healthcare professionals to focus on patient care by handling complex financial tasks.
• Risk Mitigation: They help practices avoid costly mistakes related to industry-specific regulations and tax obligations.

Over the Horizon - Industry Challenges

Several critical issues facing GP accountants and practices:

• 60% of SA medical practices now paying payroll tax due to poor tax and accounting advice or implementation. This is a nationwide problem with the exception of a few states.
• Rising insurance premiums and limited coverage for accountants who prepare payrolls due to misclassification of employee-like contractors and or wage underpayment claims. There are no exemptions or amnesties for getting it wrong.
• Increased employee-like contractor scrutiny from the ATO and Fair Work on accountants and medical and healthcare practices who are not ensuring compliance.
• New regulations requiring tax agents to report non-compliant colleagues and clients. Due to the payroll tax issue, we are acting for several clients seeking damages for poor accounting and tax advice and reporting their former tax agent(s)to the Tax Agents Board.

For traditional accounting firms, it is crucial to grasp the rapidly developing intricacies of the healthcare industry. We help traditional accounting firms by ensuring their clients are compliant so you do not have to change your accountant.

Summary of Key Points:

• Understanding Industry Nuances: Essential for accounting firms to avoid compliance issues.
• Risk of Non-Compliance: 60% of SA GP practices may have found that cheaper accounting methods can lead to higher systemic risks. For employee-like contractor arrangements, expect more from the ATO e.g. 11.5% super, PAYG, Workcover and Fair Work or practitioner disputes.?
• Misconceptions About Fees: Lower fees do not necessarily mean better service.
• Consequences of Audits: A single AI-driven audit can cause significant financial issues.
• Prevention Over Cure: Proper accounting practices are essential to prevent future complications. For those who lack the interest or enthusiasm for managing these responsibilities, considering alternatives to practice ownership might be a wise decision. The landscape is not becoming simpler, so it is important to remain proactive.
• The rewards are there, however this is the new cost for doing business.

I hope you have found this useful. Please feel free to share.

Thanks Roxanne S. for the nudge to write something, I hope this helps.

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