FEATURE
Robyn Peters
Robyn Peters is the Managing Director of CONNECT DIRECT Pty Ltd, developers of Direct CONTROL a business management
software solution for the health sector.
robyn.peters@directcontrol.com.au
Financial reporting and the
medical practice
INTRODUCTION four hundred and fifty dollars, a summary of every transaction
Businesses keep books to ascertain whether or not they are is included in the final reports for that particular financial year.
making a profit or a loss. To physically view this information, These transactions result in a list of what you own (Assets), less
reports need to be produced in either soft copy or hard copy what you owe (Liabilities), leaving a value of what you are
so that they can be analysed and shared. worth (Capital or Equity).
The advantage of computer accounting applications
is that reports can be produced quickly without the time ExTERNAL ACCOUNTING
consuming job of gathering, summarising and presenting this Apart from government regulations (the Australian Taxation
information. Office, the Australian Accounting Standards Board – AASB
As the majority of the practice management software which governs the practice of accounting and issues approved
solutions available in Australia are not fully-integrated accounting standards), the main reason for the keeping of
accounting packages, data has to be transferred to a books is to ascertain whether or not the business is making a
third-party accounting solution to get a “good picture” of profit or a loss.
how the business is functioning. This can be quite a tedious The Australian Accounting Standards Board and the
and expensive exercise, particularly if you are managing stock Australian Accounting Research Foundation (AARF) have
movement as well. published a series of Statements of Accounting Concepts.
However, thanks to our having to do Business Activity These statements are accounting guidelines for people
Statements (BAS), this data is at least transferred more often and organisations and are viewed as being part of a set of
than prior to the year 2000. Back then, you were lucky to know interrelated concepts (the accounting conceptual framework).
how your business was going financially once a year when your Detailed below are three reports: The Trading Statement,
accountant lodged your returns to the ATO. the Profit and Loss Statement and the Balance Sheet for
Most medical practices lodge their BAS each quarter a Medical Practice. The registered business name of the
and therefore may only get an indication of how they are Practice is A Bouncing Medical Practice. These financial reports
performing financially at that time. were produced at the end of the fiscal period 30 June 20xx.
Clearly it is far better to have your finger on the pulse However, many organisations produce these reports on a more
of your business every day, so that you can make informed regular basis.
decisions within a reasonable time:
The Trading Statement
• Autoclave breaks down — Can I afford a new one now or A Trading Statement is illustrated below:
should I just pay to have it fixed?
• I need to upgrade the Server — Is this in my budget?
• I need a weeks break — Can I afford to be away?
• Increased income — What areas of the business need
improvement?
• Current practice management solution not meeting business
needs — Can I afford to change to another?
FINANCIAL REPORTS
It is important that the bookkeeper understands what they are
trying to achieve and why.
All transactions are recorded for the financial period, usually
a fiscal year, and a number of reports are extracted from these
records. It is from these reports that the viability of the business
can be seen as each transaction is recorded in monetary
terms.
Whether it is a receipt of twenty cents or a payment of
PULSE+IT 29
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