Bookkeeper for Optometrists Geelong | Optical Practice Bookkeeping Victoria

Why Optometry Bookkeeping Requires a Specialist

An optometry practice is effectively two businesses operating under one roof: a health professional providing GST-free consultations, and a retail dispensary selling taxable frames, lenses, contact lenses, and accessories. Getting the bookkeeping right means correctly separating these revenue streams and applying the right GST treatment to each — every single transaction.

Most general bookkeepers are not familiar with this distinction. The result is usually one of two problems: either all revenue is coded GST-inclusive (overpaying GST on consultations), or all revenue is coded GST-free (underpaying GST on dispensing). Both create BAS errors. Both create risk with the ATO.

Mixed GST Treatment: Consultations vs Dispensing

Professional optometry consultations — eye examinations, contact lens fitting assessments, disease management consultations — are GST-free health services. The sale of optical goods — frames, prescription lenses, contact lenses, lens solutions, and non-prescription sunglasses — attract GST at 10%. A practice that does $400,000 per year in revenue, split roughly 50/50 between consultations and dispensing, needs every transaction correctly classified. True Tally sets up a Xero chart of accounts that separates these revenue streams from day one.

HICAPS and Medicare Reconciliation

HICAPS is the payment system used by most private health funds for on-the-spot rebate claiming. When a patient uses HICAPS, the practice receives the gap payment from the patient immediately and the health fund rebate a few days later as a separate bank deposit. Without a proper clearing account workflow in Xero, these deposits are difficult to match and your bank reconciliation becomes a mess over time. True Tally builds a reconciliation process that tracks outstanding HICAPS claims and matches fund payments as they arrive.

Medicare bulk billing for optometry adds another layer — bulk-billed patients create no direct payment from the patient, and the Medicare rebate arrives as a batch payment. These must be matched against individual consultation records in your practice management software.

Frame and Lens Inventory Tracking

Inventory management is often the most neglected area of optometry bookkeeping. Frame and lens stock represents significant value on the balance sheet, and shrinkage, write-offs, and ordering decisions all need to flow through your books. True Tally can set up a basic inventory tracking system in Xero, or help you integrate with dedicated optical inventory tools, ensuring your cost of goods sold is accurately reflected in your profit and loss.

      Not sure if your current bookkeeping is handling the GST split correctly? True Tally offers a Xero health check for optometry practices — a review of your chart of accounts and recent transactions to identify GST errors before your next BAS.
    

Xero for Optometry — Built for Your Practice

True Tally configures Xero specifically for optometry practice operations, not a generic small business chart of accounts. Here is what that looks like in practice:

Chart of accounts with separated revenue streams — consultation income (GST-free) and dispensing income (GST) tracked separately
Supplier payment management — frame suppliers, lens labs, contact lens distributors all set up with correct expense coding
HICAPS clearing account — outstanding fund claims tracked and matched as payments arrive
Medicare reconciliation workflow — bulk bill batch payments matched to individual services
Payroll for reception and optical dispensers — STP-compliant, super, leave entitlements managed
Bank feeds reconciled monthly — no backlog building up before BAS time
Quarterly BAS lodged as a Registered BAS Agent — correct GST treatment, lodged on time
Monthly P&L reports — revenue by stream, cost of goods, and expense ratios in a readable format

Frequently Asked Questions — Optometry Practice Bookkeeping

Is optometry GST-free in Australia?

Optometry consultations — the professional eye examination component — are generally GST-free in Australia as health services. However, the sale of frames, lenses, contact lenses, and accessories is fully taxable at 10% GST. This mixed supply situation is one of the defining bookkeeping challenges for optometry practices, and every sale must be split and coded correctly.

How do optometrists account for HICAPS claims in Xero?

HICAPS claims create a reconciliation challenge because the patient pays a gap amount immediately and the health fund pays the rebate separately a few days later. True Tally sets up a clearing account workflow in Xero to track outstanding HICAPS claims, match the fund payment when it arrives, and ensure your bank reconciliation always balances.

Can Xero integrate with optical practice management software?

Most Australian optical practice management systems do not have a native Xero integration. Reconciliation is typically performed using exported reports matched against Xero bank feeds. True Tally builds a monthly reconciliation workflow tailored to your specific software so your revenue, payment types, and outstanding balances are always correctly recorded.