The Small Business Instant Asset Write-Off has been in the news this last week. I discuss practical tips on how to take advantage of the write-off.

Proud to be one of the judges for the Practice Ignition. Top 50 Women in Accounting of 2018 along with Lielette Calleja and Kylie Parker. Enter your nomination here.

“Advisory” has been the buzz word in accounting for the last few years. Accountants are clamouring to productise and package their advisory offering for both new and old clients. But with all of this focus on "giving" advice, have accountants lost or abandoned the skill of just sitting with and actively listening to clients? Many would say that listening to clients and understanding their business, personal life and goals are part of delivering advice – and I totally agree with this organic form of advisory. The problem is that many advisers aren’t doing it. With the rise of tech products that facilitate advisory (amazing tools if used correctly) it seems to me that the cookie cutter approach to providing advice is winning out with many. This approach focuses only on traditional goals one would expect business owners to have – increased revenues, profit, saving tax. All very important metrics but only part of the picture. If we sit down and really listen to our clients maybe the traditional financials goals aren’t what we need to be focusing on. In fact maybe this focus is counter productive right now. Often the important goals are more specific to that individual or family group: time with kids and family, managing financial stress, juggling health concerns while running the business, resolving partnership issues, redefining the business offering, preparing the business for a child to takeover. And these are the things that can only ever be discovered by listening. When I work with clients, I make it my number one priority to listen. Listening comes first – advice comes second.

Think you have your Medical Practice’s Xero or MYOB file mastered? Check out our top tips for setting up and maintaining a file and Chart of Accounts specific to Medical Practices. 1. Be specific to Medical Setting up a Chart of Accounts that enables you to accurately classify income and expenses and report on profitability is key. Medical practices have specific income, expenses and liabilities which need to be classified correctly. And you won’t find these accounts in the standard Chart that comes with your software. 2. Who owns income? When devising the Chart of Accounts you will need to consider how to account for income of the practice. Too often patient fees are reported in the incorrect manner and shown as top line income of the practice. Patient fees should (generally) be reported in two account types: Revenue Accounts (Sales) – showing patient fees and income of employees or owner doctors who do not operate through another legal entity Liability Accounts (Clearing Accounts) – showing fees collected on behalf of practitioners running their own business under service agreement with the practice (sometimes referred to as “contractor doctors” by those working in the industry). Some have the view that it is “no big deal” to report income of all practitioners (including non-employees or owners) in top line revenue. The rationale is that the inclusion of a corresponding expense taken up when net billings are physically paid essentially arrives at the same final profit result. We do not support this view, as reporting income that does not belong to the practice as revenue has the potential to cause issues around payroll tax, GST, superannuation, small business concessions and employment entitlements. 3. Clear the clearing account Income collected under agreement on behalf of practitioners but not yet paid needs to be quarantined to a clearing account (or multiple clearing accounts) until payment is made to the doctor. Be vigilant with these accounts and ensure they are: Reconciled regularly Keep these accounts for the sole use of parking patient fees that have been collected by you on behalf of practitioners. Don’t mix other transactions, loans or adjustments in this account! Even better, investigate using a tool such as Surgical Partners which will integrate with your Xero file and PMS to automate this process. 4. Cash vs accruals accounting Is your practice accounting on an accruals method or cash method? Is your GST reporting method (as required by the ATO), via the cash or accruals system? The way in which you report for accounting and GST purposes is going to impact on how the Chart of Accounts is set up. 5. Don’t neglect other sources of income Many practices sell goods – skincare products, medical aids, educational materials and even food. Therefore, your file needs to be set up to account for the purchase, and in some cases, the tracking of these goods. Just because these sales may not be your main income source does not mean that you do not need to actively account and report for these goods with any less care. At the very least you need to easily identify the profit these lines are generating at any point in time. 6. Keep it clean Having your Chart of Accounts set up correctly won’t help you if your data is not clean and maintained. Regular reconciliations as well as reviewing Profit and Loss and Balance Sheets to ensure quality and consistency of input is key. Ensure old accounts are archived to avoid accidental miscoding and lock dates are utilised to limit access to prior periods. Always remember the old saying ‘rubbish in – rubbish out’. Take the time to set up and review your file and Chart of Accounts for successful and accurate reporting in your practice.