Bookkeeping for Allied Health Practices in Australia

Why Allied Health Bookkeeping Is Different

Most small business bookkeeping follows a simple pattern: invoice, bank deposit, reconcile. Allied health practices are more complex. You're dealing with multiple payment streams — direct patient payments, Medicare rebates, HICAPS private health fund claims, NDIS — each arriving in different amounts, at different times, and with different GST treatment.

Practice management software like Cliniko or PowerDiary handles the front-end billing well. What it doesn't do is reconcile those transactions against your actual bank account, prepare your BAS with correct GST-free coding, or run your payroll under the Health Professionals Award. That's where a specialist bookkeeper steps in.

GST and Medicare: What Most Practice Owners Get Wrong

This is the biggest bookkeeping error in allied health: coding Medicare income as GST-taxable (10%) instead of GST-free.

Under the GST Act, most Medicare-eligible health services are GST-free. This applies to physiotherapy, occupational therapy, psychology, speech pathology, and most other registered allied health services. HICAPS private health fund payments for eligible health services are also GST-free.

What this means in practice:

• You do not charge GST on Medicare-eligible patient invoices
• You code income from these services as GST Free in Xero
• You cannot claim the GST component on practice expenses in the same way a fully-taxable business can — your GST credit entitlements are apportioned
• If you also provide non-health services (e.g., coaching, consulting, non-health products), those may be taxable at 10%

NDIS Bookkeeping for Allied Health Practices

NDIS payments received by registered NDIS providers are GST-free. The bookkeeping challenge is reconciliation — because NDIS payments arrive through three different pathways depending on how your client's plan is managed:

• Agency-managed clients: You claim directly through the NDIS myplace portal. The NDIA pays you directly. Match bank deposits to portal claims in Xero.
• Plan-managed clients: You invoice the plan manager. They pay you. Match invoices to plan manager payments in Xero.
• Self-managed clients: You invoice the client directly. They claim from NDIS and pay you. Match invoices to client payments in Xero.

Each pathway creates different timing between service delivery and payment. A bookkeeper keeps these reconciled so your debtor reports are accurate and you're not chasing money that has already been paid.

Cliniko and PowerDiary: What They Do and Don't Do

Cliniko and PowerDiary are excellent practice management platforms. They handle appointments, billing, Medicare Online, HICAPS terminal integration, and invoicing beautifully. They are not accounting software.

The gap between your practice management platform and your Xero file needs a bookkeeper to bridge:

• Bank reconciliation: Medicare deposit amounts rarely match individual invoice totals exactly — gap payments, bulk-billing shortfalls, and HICAPS batch payments need to be correctly matched in Xero
• GST coding: Cliniko/PowerDiary pushes invoices to Xero — but the GST codes need to be correctly set up in Xero so that health services are GST-free
• BAS preparation: Your BAS figures come from Xero, not Cliniko
• Payroll: Cliniko/PowerDiary does not run payroll. STP, super, leave, and payslips are managed separately in Xero Payroll

Allied Health Payroll: What Makes It Complicated

Payroll in an allied health practice has several layers most industries don't have:

• The Health Professionals and Support Services Award covers most practice employees. Pay rates vary by classification (Physiotherapist Grade 1–4, Allied Health Assistant, Reception etc.) and can be complex to interpret correctly
• Many practices engage practitioners as contractors rather than employees. This means ABN invoices, no PAYG withholding — but super may still apply if they earn above the threshold and work primarily for your practice
• Percentage-of-billings payment structures (e.g., practitioners paid 40–50% of what they bill) require careful calculation each pay period and clear records
• STP Phase 2 reporting applies regardless of how many staff you have

Choosing a Bookkeeper for Your Allied Health Practice

Not every bookkeeper understands allied health. When evaluating a bookkeeper for your practice, ask:

• Are you a registered BAS agent? (Non-negotiable — required by law)
• Have you worked with Cliniko or PowerDiary integrations before?
• Do you understand GST-free coding for Medicare services?
• Have you handled NDIS reconciliation for a practice?
• Are you familiar with the Health Professionals Award pay rates?

True Tally works with allied health practices across Geelong, the Mornington Peninsula, and the Surf Coast. We understand the specific billing and compliance requirements that come with Medicare, NDIS, and private health — and we maintain Xero files that actually reflect how your practice runs.