Bookkeeping for medical practices

How medical bookkeeping usually works

A strong bookkeeping for medical process starts with a review of your structure (sole trader, company, trust or service entity), practice management software, bank and merchant facilities, current coding, and any overdue BAS, super or payroll issues.

Then the work typically splits into three stages:

• Immediate triage: Fix urgent errors, reconcile bank and settlements, bring BAS/STP/super up to date.
• Process design: Align PMS reports to accounting workflows, set up clearing accounts, map GST rules, and document provider payouts.
• Ongoing review: Monthly reconciliations, provider payable ledgers, KPI reporting and compliance calendar checks.

Australian context to keep in view

• Multiple payers: Medicare, DVA, private health, NDIS and self-pay each settle differently; batches must tie to PMS day sheets.
• GST: Most medical services are GST-free; many allied health, consumables and cosmetic services can be taxable. Correct BAS coding is essential.
• Provider splits: Service-fee models need clear documentation, provider ledgers and timely payouts.
• Payroll: STP Phase 2, super guarantee, awards/loadings for nurses/admin and contractor vs employee decisions need careful handling.
• Privacy and controls: Limit who can see clinical data vs finances, and separate receipting from bank reconciliation where possible.

If you also need help beyond bookkeeping for medical, see BAS agent services, payroll services or tax accountant support.

What’s included in bookkeeping for medical practices

• Daily/weekly bank feed reconciliation and settlement matching (Medicare, private insurers, HICAPS, Tyro/EFTPOS).
• PMS report matching to accounting entries and clearing accounts to capture timing differences.
• Accounts receivable management for private/self-pay patients and third-party payers.
• Accounts payable for suppliers, consumables and equipment; paperless bills and approvals.
• Provider payout calculations, statements and ledger reconciliations.
• Payroll processing for admin/nursing, STP and super lodgements; support for contractor clinicians where applicable.
• BAS and IAS preparation from correctly coded data; GST review on taxable vs GST-free services.
• Practice KPIs and board-ready month-end packs.

Software and integrations that matter

Medical bookkeeping is smoother when your PMS and accounting tools are aligned. Common combinations include:

• PMS: Best Practice, MedicalDirector, Genie, Zedmed, Cliniko, Dentally and similar.
• Accounting: Xero, MYOB Business, QuickBooks Online.
• Payments: Tyro, HICAPS, EFTPOS providers; health fund/insurer portals.
• Workflows: Data capture and bill approval apps, secure document storage, and dashboard/reporting add-ons.

Ask your medical accountant to demonstrate how PMS day sheets, batching and settlement reports reconcile to bank feeds and your general ledger.

GST and BAS for medical practices

• Confirm which services are GST-free medical services and which are taxable (e.g., some allied health, cosmetic procedures, consumables sold separately).
• Use separate revenue accounts and tax codes to keep BAS accurate and auditable.
• Reconcile Medicare/private settlements that net off fees so GST and income aren’t misstated.
• Track PAYG withholding and instalments; lodge BAS/IAS on time to avoid penalties.

Not sure how your services should be coded? A registered BAS agent or tax accountant can review your setup.

Payroll and contractor payments in medical

• Apply the correct award/enterprise agreement for nurses and admin; configure loadings and allowances.
• Set up STP Phase 2, super guarantee and leave correctly; reconcile super payments to ledgers.
• Document contractor arrangements for clinicians; manage service-fee deductions and provider payables.
• For eligible not-for-profit health entities, coordinate salary packaging and consider FBT implications.

If you’re unsure where payroll stops and contractor payouts start, see payroll for medical or use the form below.

Controls, reconciliations and a simple compliance calendar

• Daily banking check against PMS takings; weekly settlement reconciliations.
• Month-end: bank, clearing accounts, provider ledgers and super reconciliations.
• Quarterly: BAS and practice performance review.
• Annually: payroll reconciliation, tax planning with your medical tax accountant, and software health check.

Common mistakes we fix often

• Posting insurer/Medicare settlements straight to income without using clearing accounts.
• Mixing GST-free medical income with taxable services or consumables.
• Paying providers without a reconciled provider ledger or clear fee-split documentation.
• Underpaying super or misclassifying contractor clinicians as employees (or vice versa).
• Letting PMS and accounting reports drift apart, creating hidden timing differences.

What to compare before you commit

Best next steps

Write down the exact outcome you want: clean reconciliations, correct GST/BAS, reliable provider payouts, payroll confidence, or better monthly reporting.

Shortlist providers who can show how they reconcile PMS to bank and explain GST and fee splits clearly. Use the related links to move into payroll or tax if that’s urgent, or reach out now for tailored help.