2024 Year end tax planning and financial reporting guide - unlocking tax and reporting insights for year end success > Download the full guide
Practice Financial Statements Essentials
1 June 2016 | Minutes to read: 2

Practice Financial Statements Essentials

By William Buck

As more and more pressure is placed on GP practices in the current environment, the ability to access accurate and timely financial information is becoming more critical.  From the results of our recent GP benchmarking survey we noted that more than 60% of practice’s are using old desktop software and not considering the integration of their practice management and financial software.

Historically many GP practices have focused on the clinical side of life and not as much on the financial side.  With the freeze in Medicare Rebate likely to continue or remain low there is more pressure than ever to ensure you are running a profitable business.

A practice that follows good management including financial management will benefit in the following:

  • More profitable, better cash flow and less financial risk;
  • Easier to sell and even get a better price;
  • Better placed to respond to opportunities and deal with challenges as they arise; and
  • Easier to obtain finance should it be required.

Being able to access financial information that is timely and accurate is the best way to assist you in understanding your practices financial requirements.  Historically bookkeepers or practice managers have relied on completing a bank reconciliation at the end of the month and then handing the file over to their accountant at the end of the year to produce the financial statements.  For practice owners there can quite often be up to 12 months delay receiving accurate financial information on the performance of the practice.  In doing this you are always reviewing historical data therefore reducing usefulness of the data.

Times have changed!  Best practice is now to utilise cloud software that enables the financial data to feed directly from your bank account into your software on a daily basis.  With automatic rules being setup for the allocation of income and expenses you can significantly cut the time spent in entering and reconciling bank accounts.  By having up to date information, which your advisor can also access at the same time, you can talk to your advisor at any time during the year allowing you to discuss the performance of your practice.  Changes can be implemented to respond to opportunities and challenges in real time rather than 12 months in arrears.

To work out the best option for your practice, please contact your William Buck Advisor

Disclaimer: The contents of this article are in the nature of general comments only, and are not to be used, relied or acted upon without seeking further professional advice. William Buck accepts no liability for errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice. Liability limited by a scheme approved under Professional Standards Legislation. This information is current as at 14th June 2016

Related Insights