The 2016 Bookkeeping Centre site listed health networks and clinics among the files that “needed little oversight”. That sentence hid a lot of unglamorous work: health-fund settlements that did not match the appointment book, practitioners who called a weekly transfer a “wage”, rooms that looked busy and still did not cover the rent, and a BAS that mixed GST-free consults with taxable retail on the same reception desk.
This is the clinic file as we would still keep it in Rosebery or Perth. It is not clinical advice and it is not a ruling. Confirm ATO GST health schedules, Fair Work instruments and your registration type before you copy a single tax code.
Start from how the rooms actually earn
A clinic is not one income line. It is usually some mix of:
- practitioner fees that the entity earns and then shares
- practitioner fees that the practitioner earns while paying you room rent
- health-fund and Medicare-related settlements (the scheme names change; the matching problem does not)
- gap payments at reception
- retail — creams, supports, supplements, aids
- classes, reports, and the occasional medico-legal letter
- room hire to a visiting specialist
If you dump all of that into “Sales”, you cannot price a room, you cannot acquit a grant if a network funds you, and you cannot explain GST. The chart of accounts should name the streams you actually invoice. The allied health habit is to match the appointment book, not the software default.
Write a one-page legend: which practitioner belongs to which stream, who invoices whom, and what reception is allowed to code without asking. A new receptionist is the most expensive tax decision you will make this year if you leave them to guess.
Practitioner money: wages, draws, splits and rent
This is where clinic files go to die. The hallway language is “we pay the physios 60%”. The law does not speak hallway.
If the practitioner is an employee, they are on the payroll. Ordinary time, any allowances, PAYG withholding, Super Guarantee at the rate in force (12% from 1 July 2025 — confirm the ATO), and from 1 July 2026 payday super on the same rhythm as wages. Confirm Fair Work for the award or agreement. Do not invent casual loadings here. The payroll hub is the longer file. A “60% of billings” employee is still an employee. The percentage is a bonus formula, not an escape from STP.
If the practitioner is a genuine contractor, you need a contract, invoices, and a clear GST story on their supply to you. You also need to keep asking the contractor-versus-employee question as the facts change. This journal will not bless a structure from a paragraph. Your agent and, if needed, your lawyer will. The bookkeeper’s job is to stop coding contractor transfers as wages “because it is easier for super”.
If the practitioner owns the entity, their weekly transfer is a draw, a director fee, or a distribution — named as such. It is not “wages” and it is not “cost of sales” unless you want a lying P&L. Related-party room arrangements belong on the balance sheet in language that makes a tax agent sit up.
If the model is room rental — they keep their fees, they pay you rent — then your income is rent and perhaps reception services, not their consults. Do not put their health-fund money through your sales so the bank rec “looks nice”. The bank rec can look nice with a clearing account.
Pick one model per person and write it down. A clinic with three models is fine. A clinic with three models and one income account is not.
Health-fund settlements and the gap
Reception takes a gap. A batch hits the bank two days later for a different amount. Merchant fees sit in the middle. A rejected item appears next week. If you code the bank deposit as sales, you have understated or overstated income, missed the fee, and lost the patient-level story.
Use a clearing account. Day’s gaps and any private cards go to the clearing account. The settlement also goes to the clearing account. The difference is fees, rejects, or a patient you need to call. That is the same discipline a café uses on a till, and it is the same discipline the hospitality essay uses on merchant batches.
Keep the fund’s report. A feed is not a record. When a patient argues a gap in four months, you will want the appointment, the claim and the settlement on one page. The original desk’s “validated numbers” included that page.
Do not recognise the full consult as income twice — once at the diary and once at the bank. Pick the document that starts the sale (usually the invoice or the claim) and let the bank clear it.
Rooms as a P&L, not as a floorplan
If you cannot say whether room 3 covers its practitioner cost, its share of reception, and its share of rent, you are running a blended hope. The job-costing method works here with “room” or “practitioner” as the job.
Monthly, after the close:
- billings by practitioner (GST-exclusive for margin)
- gaps collected versus gaps still sitting
- labour or split paid to that practitioner
- consumables that belong to them
- a share of rent and reception you have written down and do not fiddle
Then one sentence: this room carries, this room is carried. A board pack for a health network should not hide a carried room in a surplus.
Empty sessions are a cost. So is a practitioner who books the room and bills elsewhere. Write the rule before you have the argument.
GST on mixed health supplies
GST is 10% when a supply is taxable. Many health services supplied by a recognised professional are GST-free if they fit the ATO’s health schedules. Many things sold in the same building are not.
Typical clinic mixes we see — always confirm, never copy blindly:
- a listed consult by a registered practitioner: often GST-free
- a device, cream or supplement from reception: often taxable
- a report that is not a health service: often taxable
- cosmetic or wellness work that is not a GST-free health service: often taxable
- room hire to another practitioner: often taxable
- a package that bundles a consult and a product: a mixed supply that needs an apportionment you can defend
Simpler BAS does not save you from a wrong tax rate on a mixed reception desk. It only simplifies how you report. Run a tax-rate report every month. Look for taxable creams sitting as GST-free “because health”, and GST-free consults sitting as taxable “because the default was 10%”. The GST control account must still equal the draft BAS. See the BAS hub.
Private health and Medicare arrangements do not decide GST by themselves. The nature of the supply and the supplier does. If you are unsure, ask the agent and keep the written answer in the file.
Grants, networks and the second set of books
Some clinics sit under a network or take a program grant. That money is not sales. It is a grant ledger with an acquittal date. The original testimonials about grants admin were about this exact mess: a clinic that is tidy on gaps and sloppy on restricted funds. Read grant acquittals before you dump a network payment into “other income”.
If the network is also your board, they need restricted cash separated from trading cash on the pack. A handsome month of consults does not make an unspent program surplus.
Payroll, locums and the quiet liabilities
Leave cover is a cash event. Super follows the locum if they are an employee. If they are a contractor, their invoice still needs a job or room code. Workers compensation declarations should look like the people who actually stood in the rooms, not like last year’s estimate copied forward. Confirm the current state scheme rules.
Staff discounts on retail are still sales, usually, with a policy. Practitioner family consults need a rule before they become a fight about drawings.
The clinic close, in a day
The month-end ritual, clinic-shaped:
- Banks, cards, and the health-fund clearing account reconciled to statements and settlement reports.
- Appointment-book totals versus invoices raised — material gaps named.
- Practitioner payments matched to the model you wrote down, not to the hallway.
- GST tax-rate report, especially retail versus consults.
- Super and STP agreed; payday-super timing noted from 1 July 2026.
- Rooms page: who carries, who is carried.
- Three sentences for the owner or the network board.
If that still takes a week, the diary and the ledger are not talking. Fix the legend first. The industry guides hub is the rest of this desk’s field notes. A clinic file that is boring on a Wednesday is a clinic that can think about care, which is the point the old Rosebery copy was making when it talked about time returned to the owner.
