How to Start a Medical Practice: Accounting Advice for Medical Practice Business Structure
Author │ Lal Paulose – MAS Tax Accountants Geelong. P: 03 5222 3265
If you are a General Practitioner or Medical Professional looking to start your own practice, it’s important to have a solid business plan and structure in place. Similar to opening any small business, plus the added complexities of the medical industry, there are several legal and financial steps you will need to undertake. Our expert Tax Accountants can guide you through these processes, including setting up your medical practice business structure, tax and reporting obligations, business planning and solicitor referral.
Starting a medical practice may be one of the most significant decisions of your professional life. Opening a new or buying an existing medical practice is a common goal for many health and medical professionals. However, as planning and implementing the new business can require a lot of extra time, it may be difficult to fit into your already busy day-to-day life. Due to this reason and the complexity involved in the setup of a new medical practice, many doctors and other medical practitioners restrict themselves in taking the next step in their career. This is where an expert and reliable Business Tax Accountant can help to get started on the initial set-up and provide ongoing support.
Important steps to consider when starting your medical practice and business set-up:
1) Business Set-Up: Medical Practice Business Structure
The business structure is a vital aspect of your business, as it lays the foundations to correctly set-up and operate. There are a different business structure types that may suit you, including:
a) Sole Trader: Independent, ultimate liability on the owner, easy to run, less setting up cost, tax rate would be higher up to 45 to 48% depend on your income.
b)Trust: Highly tax efficient, can reduce tax bracket 30 to 33% if set up properly.
c) Company: Limited liability, fixed tax rate 28.5%, set up is more expensive compared to a sole trader or trust, and you will need to comply with Corporation Act and ASIC.
2) Location: Where do you want to open the practice?
Issues regarding location and premises have to be decided by the practitioners or investors, so it is recommended that you do your research on property areas, building specifications, council allowances, target market proximity and prices. Ideally, you may want a popular location, such as a shopping centre where you could benefit from available parking and minimum marketing expenses to promote your business. If you plan to buy or build a commercial property, be sure to plan everything accordingly and seek professional advice. It is also important to check if there any restrictions in your current work contract in practicing with new the business set-up, such as area restriction, DWS or monetarium.
3) Capabilities: Consider Business Functionality and Set-Up
Assess your abilities to manage the day-to-day business activities, both before and after opening. If you are considering hiring staff, such as a Practice Manager, they can assist you in running the practice smoothly and without much delay. This could be very important during the starting stages of your business, as they can assist in the administrative and technical tasks.
4) Managing Your Business: Billing, Staff, Tax and Accounting
When it comes to managing your business activities, there are a lot of considerations to keep in mind. These could include deciding the billing structure for patients (private, bulk billing or both), staffing needs, furniture and equipment, ongoing tax and accounting responsibilities, and so on. If you buy an existing business, you may not have to worry as much about some of these processes.
If you are hiring staff, you will also need to ensure that your accounting and payroll systems align with the ATO reporting standards, including Single Touch Payroll (STP).
Your tax and accounting responsibilities will be influenced by the business structure and your accountant can assist in preparing and lodging needed statements or returns. There are several tax considerations and accounting work that will need to be completed on a regular basis, all of which may differ in complexity depending on the size and structure of your business. Our expert Tax Accountants Geelong can help you with these responsibilities.
At MAS Tax Accountants Geelong, we can help you with all the step by step processes of starting your own medical practice and running a successful business. If you are planning to buy an existing practice, we can assist in negotiating with the vendor, complete due diligence checks and go through all legal formalities with our referred solicitor, provide a referral to our financial planner and assist in the business set-up documentation.
We can help with all your daily tax, accounting and bookkeeping, which will give you more time to focus on running your business and seeing clients.
Mas Tax Accountant Geelong can also help you with the finance required for buying the existing business and working capital requirements to start the practice.
Learn more about our Geelong office, including our Tax, Accounting and Business services. We also offer a free initial 30 minutes consultation.
For more information or to schedule an appointment, please contact us below or call us on 03 5222 3265