You are running out of time.

There’s a big misconception that it’s okay to set up a Self-Managed Super Fund (SMSF) and then just leave it be. Educating yourself on the legislation surrounding your SMSF is key to being prepared for the changes to come in the 2017 financial year, explains Adelaide Accountant Kym Nitschke.

Tags: Accountant, Adelaide, ATO, Australian Tax Office, Retirement, Self-Managed Super Fund, SMSF, South Adelaide Accountant, South Australia, Super Fund, Superannuation, trustee

Self-Managed Super Funds (SMSF) are giving Australians more control than ever before over their superannuation. Is an SMSF right for you? Adelaide financial planner Kym Nitschke explains the benefits.

Tags: Adelaide, Adelaide Accountant, Nitschke Nancarrow Accountants, Self-Managed Super Fund, South Adelaide, Superannuation, superfund, Taxes

When you decide to become an employer and hire employees, it is important to be aware of your payment and reporting obligations as a boss. The relevant authorities do expect each employer to understand their obligations and to adhere to them. Non-adherence may result in significant penalties being imposed upon you.

The following information is a summary only and is intended to create awareness of your obligations as an employer. Links to relevant websites have been provided to assist you in becoming familiar with your obligations.

It is vital that you understand the following components prior to becoming an employer:

-Employee Tax File Number Declaration

-PAYG Withholding (PAYGW)

-Superannuation for Employees

-Annual Employee Reporting

-WorkCover Insurance

-Payroll Tax (if applicable)

 

Employee Tax File Number Declaration

Upon the commencement of employment, each employee must complete and sign a Tax File Number declaration form. You will submit this form to the Australian Tax Office (ATO) and will also use this information to determine how you pay your employee. Refer to this ATO link for further information: ATO Tax File Number Declarations Information

Pay As You Go Withholding Tax (PAYGW)

As you will be paying wages to your employees, you are required to register for Pay As You Go Withholding Tax (PAYGW) with the Australian Taxation Office (ATO). If not already actioned by Nitschke Nancarrow Accountants, refer to this ATO link for guidance on how to register: ATO Registering for PAYG Withholding Information

When paying wages, you are required to withhold taxes from each wage payment made to employees. Refer to this ATO link for further information and to assist you with calculating the tax to be withheld: ATO PAYG Withholding Information

Once you have registered with the ATO as a PAYG Withholder, there will be new Pay As You Go Withholding Tax (PAYGW) fields on your Business Activity Statement (BAS). You are obligated to include both the gross wages paid and the tax withheld in these fields for each period. The taxes withheld will be included in the net amount payable/refundable on your BAS. If you’d like Nitschke Nancarrow Accountants to complete your BAS, we’ll ask you to provide us with your gross wages and tax withheld each period. The following ATO link explains this further: ATO PAYGW – BAS Reporting Requirements Information

If you are not already registered with the ATO as a PAYG Withholder, Nitschke Nancarrow Accountants offers a service to action this on your behalf.

Superannuation for Employees

As an employer you have 3 main superannuation obligations:

1. Super Guarantee
2. Choice of fund for employees
3. SuperStream

Super Guarantee

As an employer you are required to contribute towards superannuation (under the Super Guarantee Act) on behalf of your employee(s). For details of the current Super Guarantee rate on ordinary earnings and a broader overview of employer Super Guarantee obligations, please visit this ATO link: ATO Super for Employers Information

Choice of Fund for Employees

As an employer who is required to pay the Super Guarantee, you may also be required to offer your employee(s) a choice of which super fund they would like you to pay Super Guarantee contributions to. The following ATO link provides information on how to manage this for each employee: ATO Choice of Fund Information

Additionally, this ATO link provides a broader overview of setting up a super and includes information on advising the super fund of the employee(s) Tax File Number: ATO Setting Up Super Information

SuperStream

As an employer you must meet the recently introduced ATO SuperStream rules, which require employers to provide data and payments to their employees electronically. The following ATO link provides information on how to manage these requirements: ATO Guide to Managing SuperStream

Payroll Tax

Payroll tax is a self-assessed, general purpose state and territory tax assessed on wages paid or payable by an employer to its employees, when the total wage bill of an employer (or group of employers) exceeds a threshold amount. The payroll tax rates and thresholds vary between states and territories — as you see, they can vary widely:

Australian Capital Territory: $2,000,000 annual threshold and a tax rate of 6.85%

New South Wales:  $750,000 annual threshold and a tax rate of 5.45%

Queensland: $1,100,000 annual threshold and a tax rate of 4.75%

South Australia: $600,000 annual threshold and a tax rate of 4.95%

Tasmania: $1,250,000 annual threshold and a tax rate of 6.1%

Victoria: $575,000 annual threshold and a tax rate of 4.85%

Western Australia: $850,000 annual threshold and a tax rate of 5.5%, unless income is between $850,000 – $7,500,000 annually (sliding diminishing threshold) or in excess of $7,500,000 annually (no threshold granted).

Annual Employee Reporting

As an employer, you will have annual reporting obligations and you will need to give each of your employees a payment summary specifying how much you paid them in the financial year and how much you withheld from the payments.

You must also send the ATO an annual report summarising all payments and amounts withheld for the year.

The following ATO link provides information on how to manage these requirements: ATO Payment Summaries and Annual Reports Information

WorkCover Insurance

WorkCover is Australia’s Workers’ Compensation insurance and is required to be provided by all employers. The insurance covers the cost of benefits if your employees become injured or ill because of their work. The specific agency names differ by state.

The insurance may also cover:

-Replacement of lost income

-Medical and rehabilitation treatment costs

-Legal costs

-Lump sum compensation in the event of a serious injury

Further information for Victorian employers is provided in WorkSafe – Your WorkCover Insurance – A Guide for Employers. New South Wales employers should see SafeWork NSW’s guide, and South Australian employers should consult ReturnToWorkSA.

For employers in states or territories other than Victoria, South Australia, and New South Wales, please research WorkCover online and follow the link to your relevant WorkCover department.

Employee Contract

In addition to the requirements above, we recommend that you document a job description or role outline for all of your employee(s) in order to clearly define the tasks they will undertake as part of their employment. This will ensure each employee clearly understands your expectations. This document can also assist you with managing their performance if required. It should include the terms of their employment so you are both on the same page. It is often a good idea to get a lawyer to draft this up, especially if there are specific terms of employment.

Awards & Agreements

Minimum conditions at work can come from registered agreements, awards or legislation.

When a business has a registered agreement in place and it covers the work that the employee does, then the minimum pay and conditions in the agreement will apply. If there’s no registered agreement that applies and an award covers the business and the work the employee does, then the minimum pay and conditions in the award will apply.

There are 122 industry and occupation awards that cover most people working in Australia, which means many employees who aren’t covered by an agreement will most likely be covered by an award.

Where no award or agreement applies, the minimum pay and conditions in the legislation will apply. For further information on awards, agreements and employment contracts, refer to this section of the Fair Work Ombudsman website.

This is just a brief summary of some of the things you will need to think about when considering becoming an employer. Nitschke Nancarrow Accountants can be with you every step of the way.

You’re just getting started out in your new career as a doctor. You’re young, you’ve got student debts to worry about and you’re distracted by the myriad of new responsibilities on your plate. Now’s not the time to be thinking about retirement.

Or is it?

Medical accountant Kym Nitschke shows how contributing the right amount to your super every year starting now will help you secure a successful retirement.

Even though retirement may be the farthest thing from your mind at this point, it’s important to start paying attention to your super fund right now.

Why Do Doctors Need Super?

Odds are that you’ll need more in your super than you currently think. Prices can inflate beyond expectation. You might encounter health problems of your own down the road. If you don’t save up diligently, then that nice standard of living you currently enjoy may shrink and suffer cutbacks as you enter retirement.

You might be hoping to hit it big with an investment scheme and be set for life. While doctors can do well with investing, it’s not something you should rely on. Investments carry risks while whatever you put aside in super is guaranteed to grow and be there for you in the future.

Remember, too, that there are tax benefits to maintaining a healthy super fund. For example, if you’re self-employed, you may qualify to claim deductions for personal super contributions.

With annual super contribution caps fixed at just $25,000 a year, it’s crucial for young doctors to start making regular contributions ASAP and you’re no exception.

The next question is: how much should you contribute every year?

Make a Plan

The first thing you need to do is establish a starting point. Determine the following things:

– How much you currently have in super

– How much you’re currently earning

– When you plan on retiring

– How much you’ll need to live on in retirement

– How much you can afford to set aside right now

An expert medical accounting and financial planning team, like Nitschke Nancarrow, can help you figure out all of these details. Only after you find the answers will you know exactly how much you should set aside each year for super contributions.

There are a few other points you should consider to help you decide.

Consolidate Your Super

You might have super left in multiple separate funds if you’ve worked a variety of jobs. Each fund is charged different fees so that accumulated super could slowly slip away if you lose track of it. Putting your super all in one place will help you cut down on fees.

Start Saving Early

Let’s review a few reasons why it’s so important for young doctors to start saving for retirement as soon as possible:

– Your money is guaranteed to accumulate interest every year. The sooner you put it in, the more it will grow.

– You’ll be better prepared in the event an unexpected illness or accident forces you to take an early retirement.

– You can compensate for several years down the road when you may not be actively earning income such as if you take time off to raise young children.

Once you figure out how much you should be setting aside each year, do it! Don’t wait!

How Much Should a Young Doctor Save?

In today’s current economic environment most financial advisers would recommend that you put aside anywhere from 10 to 20% of your income in a retirement fund. Aiming for 15% is a good range.

Granted, the exact amount depends on a lot of factors unique to your situation. But let’s take a look at an example of someone who contributes the max of $25,000 every year to their super fund.

If this person started putting away that $25K per year starting at 30 years of age and received a 5% return on it, they would see close to $2 million in their super account by the time they’re 60 years old and ready to retire.

Leaving that $2 million in the bank would earn $100K per year at that 5% rate. That’s sufficient to afford a very comfortable lifestyle for the doctor and his or her partner in retirement. Assuming the house is paid off, that income would easily cover basic living expenses and then some.

Sound nice to you?

Then it’s time to get started with a savings plan for your super fund. Contact Nitschke Nancarrow today on (08) 8379 9950 or send me an email to plan your free initial consultation. We’re happy to help young doctors like you start successfully saving for retirement.

Contact Nitschke Nancarrow managing partner Kym Nitschke for a free initial discussion about your situation. Call us on (08) 8379 9950 or send me an email.

– Kym Nitschke

The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s  interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.

Tags: medical accountant, Superannuation

When it comes to your super, it’s never too soon to start investing. This is true even for high income earners like doctors. Here’s key information for medical professionals to help understand and make the most of superannuation.

Superannuation can be hard to understand. Given the ever-changing legislation surrounding this already murky topic, it’s no wonder that even skilled and knowledgeable professionals (including doctors like you) put super on the backburner.

Your super, however, is still one of the most effective investment strategies and a reliable way to prepare for retirement.

Here’s what you should know about super and how it affects you as a medical professional.

How Your Super Fund Works

Your super fund accumulates a portion of your earnings over many years until you reach the age of retirement. Your employer is responsible for contributing a percentage of your salary into the fund. You can optionally sacrifice more of your earnings to pad your fund but there is a limit for how much you can contribute each year.

You can use the funds in your super to invest in various ways to help grow the money even further, but you can’t use the money until you’re retired.

Now, let’s review some other key considerations about superannuation, particularly for doctors.

Key points on Super for Doctors

You need to start saving now.

As a doctor, you need to start paying attention to your superannuation plan much sooner than you’d think – even if you’re relatively new to medical practice. This is because you’re already late to the game.

Doctors spend a significant portion of their lives studying. You spent several years learning instead of earning so you may be a bit behind in your retirement savings.

The sooner you prioritise contributing to your super, the more time your fund will have to experience growth. What’s more, the annual limit for making a voluntary contribution to your super fund means that you can’t just save up and deposit a large sum later on in life when you’re getting close to retirement.

Giving attention to your super fund now will also help you to mitigate any unexpected negative circumstances. For example, what if you get injured during your working years and have to stop practicing? What if family responsibilities limit your earning capabilities? What if you have to retire earlier than planned? What if you have large expenses come up after you’ve reached retirement and need to use up more of your savings than you anticipated?

Anticipating such situations will motivate you to start making the most of the time you have to save up for retirement.

You might have to consolidate your super fund accounts.

There’s usually no need to have multiple super funds but you may have unaccounted-for super in accounts you’ve forgotten about. This happens when you switch jobs and forget to take your super savings with you to your new employer/fund.

Forgotten super can be a bad thing since those neglected accounts may still be charging you fees out of the balance you have left there.

You can check with the ATO to find out if you have any lost super somewhere.

Before you consolidate your super fund accounts, however, consult with a financial adviser for guidance. Cancelling one account could affect things like your insurance coverage that may be attached to that account.

Superannuation contributions help you save on tax.

The government is happy to take a significant cut from the income of high-earners. And as a doctor, you earn more than most people.

Super is taxed at a lower rate than regular income so putting away as much of your earnings as you can means you may get a tax break. This is why superannuation is so important for doctors to understand.

Invest diversely.

You can use your super fund to invest in various areas, and you should. If you keep your investments concentrated on just one sector then you risk losing a lot, if a market takes a turn for the worse. Generate different income streams by investing in properties, shares and international investments, for example. Your super fund will have a failsafe in the event that one or two of your investments don’t perform well. Take care to invest in smart and safe endeavours and not suspicious schemes that target high-earners.

How to Choose a Super Fund

There are many super fund options. You may want to consider sticking with an industry fund rather than one that’s bank-owned. You’ll likely find that the industry fund is more member-focused.

Another thing to consider when choosing a super fund is the cost. Super funds come with specific fees attached and you don’t want to pay a cent more than you have to. Carefully comparing the fees and benefits of each type of fund will help you choose the best option. You can usually find a clear statement about the fees listed in the product disclosure statement on the website of any fund.

Beyond the fees, you’ll also want to examine the investment strategies available with a super fund. Some accounts seem expensive, but they offer attractive investment options. Others look like they have low fees on the surface, but they charge you extra fees later on when you use their investment services.

If you don’t choose your own superannuation strategy, then your employer will set you up with a default account. This fund will have low fees but it will also likely offer few investment opportunities. If and when you decide to switch to a fund of your choice, remember that you can only make the change once in any given year so think carefully and choose wisely before committing.

What About a Self-Managed Super Fund?

Many professionals including doctors are taking super responsibility into their own hands. A Self-Managed Super Fund (SMSF) does give you more freedom with your investment decisions, but it also leaves you responsible for any failed investment or poor investment decisions.

Self-managed super funds tend to be a bit costly and risky to manage.

Whether you choose to manage your own super fund or shop around for another option, you’d do well to get some professional advice, first.

Get Advice

When it comes to your super, you don’t want to risk making mistakes or adopting the wrong strategy. Seek advice not only from experienced accountants and financial advisers, but advisers who get your needs. The team at Nitschke Nancarrow can help you through every super question and need.

Contact Nitschke Nancarrow, experts in all aspects of superannuation for doctors – accounting, financial planning, investment and business. We operate in Adelaide, Sydney, Melbourne and throughout Australia. Managing partner Kym Nitschke is available for a free initial discussion about your situation. Call us on (08) 8379 9950 or send me an email.

– Kym Nitschke

The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s  interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.

Tags: medical accounting, Self-Managed Super Fund, Superannuation

Working as a doctor comes with a great income, but those who rely on their wage alone will not reach their full wealth potential.

Every doctor should have a wealth strategy designed to make sure all of your hard work, and every dollar you earn, is put towards achieving your retirement and life goals.

Don’t have a wealth strategy? That’s ok, you’re in the right place.

Here are the key initial things to focus on.

Set your goals

Goal setting is crucial because different wealth strategies and investments will produce different outcomes. What do you want in retirement? What do you want for your kids? What legacy do you want to leave?

And putting those goals to a timeline will also help you to get a sense of what’s achievable, and by when. This is why the earlier you start the better – if you begin developing and actioning your wealth strategy at the start of career, you’ll be giving yourself more time for your investments to pay off while also creating more flexibility. If you’re late in the process, don’t worry, the best time to start focusing on your wealth strategy is right now.

Deal with debt first

Getting rid of high-interest debt such as credit cards is a practical step that will help set the foundations for your wealth strategy. For many doctors the cost of servicing debts outweighs investment returns, which is a real problem. When you’re free of debt, you’re in a strong position to invest well with lower levels of risk.

Budget

Budgeting is essential to your wealth strategy process. If you don’t have a budget, you don’t have a handle on what you can realistically afford to invest. And even if you do have some capacity to invest, we can guarantee that you’ll have a lot more to contribute if you have an effective budget!

It’s a misconception that you need to begin your investment journey with bucket loads of cash. It isn’t the amount you start with that matters, it’s being financially prepared to invest even the little you have with an ongoing, systemised process that you can build over time.

It’s also wise to create an emergency fund, where you store roughly six months of pay to support yourself in hard times. Without an emergency fund, an unforeseen financial problem could force you to derail any investment progress that you’ve made.

Risk tolerance

When you partner with an experienced adviser, investment risks are much lower than if you were to go it alone. However, investing always comes with some level of risk and it is important to be aware of that.

Learning what level of risk you’re comfortable with can help guide you towards the types of investments that will suit you best. While lower risk investments won’t change your bank balance overnight, they’ll often deliver consistent returns over time that will set you up in the long term. Higher risk investments might deliver greater instant reward but require much more management with the potential for longer term pain. Only invest what you can afford, and do it with the help of an experienced financial adviser.

Invest in what you know 

As a doctor you’re familiar with the health industry. Investing in health, or another field that you know a lot about, means you understand the opportunities in the industry and have a clearer picture about where the market is heading. You’ll be able to grasp ideas easier than if it were in unfamiliar territory.

However, make sure you invest with diversity in mind. Use your knowledge and strength to your advantage but don’t put all your eggs in one basket, so to speak. 

Get expert advice

Creating a wealth strategy and starting to invest can be intimidating, but with the right advice and support, anyone can do it successfully.

Doctors should work with medical wealth experts who understand the unique financial needs of medical professionals.

Nitschke Nancarrow is among the most sought-after firms in Australia by doctors who want to build wealth and create the lifestyle of their dreams.

Contact us for an initial discussion about your needs.

The information contained on this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.

Tags: doctor, investment, wealth strategy

With so many Superannuation funds to choose from, it can be hard to know which one suits you and your needs.

And it’s no small decision. Choosing the right or wrong fund will have a tangible impact on your returns and how much money you’ll have available in retirement.  

So how do you make the right choice? The ball is in your court, and it’s important to get the right advice. But here are some key considerations.

Performance is key

No one has a crystal ball, so super returns and fund performance can never be guaranteed, past performance can give you some indication. Look at the last five years, and compare similar super funds to get the most relevant comparisons.

There are also various tools available online, including this one from the ATO, to help you assess the options.

Investing approaches

Some super funds let you choose from a range of investment approaches, including growth, balanced and conservative options.

The growth approach is optimised for higher returns, but at a high risk. This includes investing in property or shares.

Balanced means a broad mix of investments with a focus on fixed-interest and cash-based investments.

A conservative approach aims to have minimal risk of money loss, but also generating the lowest potential returns of the three.

It is important to weigh up the level of risk you’re comfortable with, with the full knowledge of the expected upside and downside.

Insurance coverage 

It’s a smart move to understand what, and the level, of insurance included with the super funds you’re considering.

Most funds offer life insurance, total and permanent disability cover and income protection cover. When comparing the insurance for multiple super funds look for premium rates, the amount of cover and any exclusions that might affect you.

One of the benefits of having insurance through your super fund and not a separate insurer is that normally it is cheaper than external insurance and doesn’t require out of pocket payments – instead, it’s pulled from the funds available in your super.

The downside however is that the insurance may not cover your specific life situation and needs. So again, make sure you get professional advice.  

Fees

Every super fund comes with fees, so comparing these expenses with other factors such as risk, investment returns, services and insurance will important to determine the value and benefits of the funds you’re considering.

A general rule of thumb is that the lower the fees, the better. Comparing the fees deducted, whether they be a fixed dollar amount or percentage of your balance, against the returns, can give a solid indication if the percentage of fee is too high. 

Services 

Super funds sometimes also offer a range of services that are included with the fees. It’s important to again weigh up what’s on offer, decide whether you’ll actually use those services, and then decide whether to factor it in to your decision making process. 

Get Advice

Get the right super strategy, and the right fund, with expert advice from Nitschke Nancarrow. Get in touch to chat about your needs. 

The information contained on this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.

Tags: Superannuation

Comparing your expenses against your income can be a shock for anyone. However, this is particularly true for many doctors — as their salary continues to rise, so do their living costs. 

Lifestyle inflation can creep up on doctors as much if not more than anyone. Before you realise it, you’re living paycheck to paycheck. Even if you’re earning a great wage.

Not only does this fuel unnecessary stress, but it opens up the door to debt and blocks retirement and investment opportunities.

Here are some simple ways for doctors to avoid the trap of lifestyle inflation.

Take an honest look at your expenses

A career in the medical sector is demanding. After working a gruelling shift, it’s almost impossible to ignore the internal, convincing voice saying you deserve a reward; after all, you work hard and earn a good salary, you should enjoy it. But then comes the retail therapy, or spending more on that new car. These impulsive buys can greedily eat away at your salary. 

To avoid overspending, first look at your lifestyle and identify the big costs contributing to your expenses.  

Next, set up a budget to cultivate conscious spending habits. Through a robust budget, you’ll be able to set aside income for important expenses rather than reflexively firing the trigger on costly purchases. 

Don’t forget to leave some money to spend on something you enjoy; denying yourself any gratification will only backfire. The key is to manage it.

Advice from a medical wealth expert can help independently assess your financial habits.

Drill down on your financial goals

Just like a goal is always more achievable if it’s measurable, planning for medium and long-term financial goals is easier once actual figures are penned to the page. 

If you have a spouse or partner, take the time to discuss your ideal future. 

Where do you want to be in five and ten years?

How much do you want to earn in ten years?

What would your ideal retirement look like?

When do you want to retire?

What are your lifestyle goals?

Sitting down with a professional who understands the unique financial needs of doctors can help you set realistic wealth goals and advise you on investment options that suit your income and future plans.

With goals in place, you’ll be much more accountable and smarter with your money.

Don’t forget the debt

Many medical professionals study for longer than most people. By the time they enter the job market, they’re often behind and carrying debt. 

Before going after any big goals like investing, you need to prioritise paying off all debt. This could be credit cards, a car loan or student debt.

The key to successfully coming out of debt is to focus on the high interest items and stick with your plan before increasing your spending. You should get professional advice about your approach.

Shift your understanding of success

One of the simplest ways to avoid lifestyle inflation is to think of success differently. Constant comparison between yourself and colleagues or friends will only drive that insatiable desire to have more.

Validating your success through big-item purchases, like a new car or a big house you can’t afford, doesn’t prove your significance to others. 

Instead, re-evaluate what you own. Continually check your spending decisions against the principle of how the purchase adds value now and into the future.

Get focused and prioritise

You’re incredibly busy. And because of this, it is hard to stay on top of your financials and set yourself up for success. With a little professional help, doctors thrive. As medical wealth experts with specialising in accounting, financial planning and wealth strategy, we’ll make sure lifestyle inflation no longer impacts you. Because no medical professional should have to worry about money.

Contact us for a free initial discussion about your needs.

The information contained on this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.

Tags: medical accounting

Many medical practice owners quickly hit a common hurdle – business is booming but cash in the bank is low.

If the problem is ignored, it can severely hobble the practice or bring it to its knees. Even with a full list of patients.

So it is key to identify the issues swiftly so your practice can run smoothly and grow, without limitation. 

Here are the key medical practice cash flow killers to avoid.

High overheads

Running a medical practice is expensive, especially if you’re not on top of your costs. Analysing your overheads against the revenue you produce can indicate whether or not the overheads are suitable, or if they are stunting your cash flow beyond good measure.

If this is the case making small adjustments can help, however bigger costs such as rent or the loan repayments are not always easily managed. You can’t just pack up and move to a more affordable place.

Take a step back and analyse what is in your control, like machinery maintenance, overtime payments and patient numbers. Here you make the changes that matter.

Loss of patients

While cash flow can be an issue even with a full book of patients, if there is a decline in regular patients over a short amount of time that will certainly be reflected in your accounts. Take a look into why this could be. Short staffed? Look into locum doctors who can temporarily fill spots at your practice without taking up permanent roles. Long wait times turning patients off? Holding your staff to regular consult times and hours of operation is important, while also managing expectations.

Analysing the loss of patient numbers can lead to a diagnosis and then a cure. Fixing the areas that seem to be the issue to increase your primary source of income will be the best way to increase your medical practice cash flow. 

Equipment maintenance and costs

Providing your practice with the latest equipment and tools to perform daily tasks is fantastic but can quickly eat into the budget and lock up cash flow. The cost to initially purchase these items and then the ongoing costs to keep them in tip top condition can be a big drain on resources.

Instead, consider renting items needed or even equipment finance. Both these options can offer flexible repayment methods, taking away the financial strain while giving your practice what it needs.

Loan payments are too high

During the initial stages of growing your practice, it can take a while to generate a consistent, steady flow of cash.

Business, property and equipment loans can be a costly factor. Explore medical finance providers that will allow for loan repayments in line with your cash flow. The loan repayments can start off smaller while you’re becoming established, then when you’ve got a strong client base and great cash flow, the loan can be paid off more substantially. Increasing the loan repayments by mirroring it to the practice’s income can offset those big loan costs especially in the early days of the practice.

The reality is, you may not have the best loan deal. You may be able to come to a more affordable arrangement with another provider, or you may be able to consolidate your debt – rolling what you owe in to one loan, saving on fees and rates. Talk to your experienced medical finance expert.

Get Professional Advice

Work with the medical wealth experts at Nitschke Nancarrow, who handle medical practice accounting and finance needs.

We know the industry, and understand what it talks to improve practice cash flow and set up your business for growth. Contact us.

The information contained on this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.

Tags: cash flow, doctors, medical practice management

Nitschke Nancarrow managing partner Kym Nitschke explains the essentials that company directors need to keep in mind when tackling financial reporting.

As the title implies, a company director’s role is to direct the course of a company. Through experience, knowledge and skills, it is their duty and responsibility to oversee company operations. 

One of these key responsibilities is ensuring the company complies with proper financial reporting. 

Typically, even the most financially savvy company director will engage the support of an experienced accountant to help navigate these key processes.

If you’re a company director working through these issues, here are some of the essential things to focus on when tackling your financial reporting.

Keep your financial records in order

Directors are essential in upholding good corporate governance, as outlined under general law and the Corporations Act 2001 (Corporations Act).

Part of this role is ensuring the company has strict accounting standards and an accurate financial report.

Regardless of whether your financial report is prepared in house or by an external party, you need to understand it entirely and review it against your understanding of the company’s position. 

As a director, it’s your responsibility to ensure the company has a fair, accurate and high-quality report by considering:

How has the report been prepared?

Is it supported by written and audited records?

Who has prepared the report? Do they have the necessary qualifications?

Is the report unbiased, accurate and objective?

Has anything been left out?

Audits ensure quality reports

An internal audit committee is essential in checking your report for accuracy and reliability. To save time and stress during the auditing process, ensure proper procedures and controls capture financial information.

An external auditor needs to be independent of the company to provide an unbias opinion of the financial report. During the external audit, directors must ensure all information is provided to the auditors. 

This process can be facilitated by your experienced accountant.

Accounting standards and industry requirements

As a director, you may find yourself responsible for areas you aren’t primarily skilled in. In addition, you need to understand the accounting process and know the reasoning behind your company’s financial decisions. This knowledge also extends to understanding how Australia’s accounting standards and the Corporations Act impacts your business.

Directors must also consider the impact of COVID on their business and what information they now need to highlight in the report. In post-COVID reporting, disclosure concerning the company is a key focus.

Steer your company to success

As a company director, working closely with an experienced accountant will ensure that you meet all of your responsibilities and requirements, providing extra support and protection both personally and for your company.

Avoid liabilities and risks and get set up for success. Contact us.

The information contained on this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.

Tags: company directors, financial reporting, financial reports