Protect your business: taking care of finance

In the 18 years I've supported medical and allied health professionals across Western Australia — including psychiatry, physiotherapy, general practice and a private day hospital — I've seen how much difference accurate, well-structured bookkeeping makes to the overall calm and efficiency of a practice.

Many clinics experience financial stress simply because these tasks have been added onto someone's already full workload. Payroll routines may have been set up years ago and never reviewed. Reporting falls behind, not because people lack care, but because their time is split across too many responsibilities.

A major risk inside medical practices is a lack of proper separation of duties. When the same staff member pays suppliers, processes wages and can also authorise bank payments, the practice is exposed to unnecessary risk. It also places unfair pressure on that staff member.

I've supported practices where this combination led to significant financial loss, including one matter that resulted in conviction and imprisonment. Strong internal controls protect both the business and the people within it.

Getting the books right

Incorrect coding is another frequent issue. When bookkeeping isn't handled by someone trained in compliance, transactions are often allocated to the wrong accounts or wrong GST category. This can lead to GST being over-claimed or under-claimed and create issues during BAS reporting.

Late activity statements also attract penalties that are noticeably higher than the interest charged by the ATO and since 1 July 2025, ATO-charged interest is no longer tax-deductible, which means using the ATO as a cash-flow buffer is becoming an expensive strategy.

When bank accounts, wages, PAYG, GST and superannuation are not reconciled correctly, the balance sheet becomes unreliable and difficult to interpret. If the practice is ever audited, correcting these errors is both time-consuming and costly.

Suspense and clearing accounts also tend to grow quietly in the background. They are commonly used as temporary holding areas but are not reviewed or cleared out. Over time, this makes financial statements inaccurate and creates additional clean up work that could have been avoided.

Payroll compliance deserves particular attention. With Single Touch Payroll fully established and same-day superannuation contributions commencing on 1 July 2026, practices must ensure their payroll systems are compliant, not just functional. When wages and superannuation must both be processed at the same time, having accurate, well-structured payroll workflows is essential to avoiding penalties and protecting cash flow.

Cash flow

Cash flow itself can be misunderstood. Many practitioners rely on the profit and loss statement to understand the business, but it doesn't reflect what is available in the bank.

Cash flow is influenced by timing differences, private health fund delays, outstanding liabilities and financing arrangements. Without accurate monthly reporting, important decisions are made without the full picture.

When a practice's financial systems are stabilised, the improvement is immediate. Payroll becomes compliant, BAS lodgements are straightforward, and cash-flow planning is clear.

Clean, accurate accounts also allow accountants to provide timely advice — including help with drawings, potential Division 7A considerations and tax planning — instead of needing to correct past errors.

Practitioners themselves express this relief best:

"Her attention to detail was exemplary and consistently met all audit requirements."
— Helen Smith OAM, Eye Surgery Foundation

"Angela is detailed, proactive and reliable, and I couldn't manage without her."
— Dr Gemma Edwards-Smith, Psychiatrist

This content was written by Angela McLean, registered BAS Agent, as part of a paid partnership with Precision Finance.

For more information visit precisioncs.net.au/medical

Angela McLean is the Director of Precision Compliance Solutions. She supports professional service, medical, and allied health businesses across Australia through remote, paperless bookkeeping, payroll, and compliance systems.