An affordable bookkeeping service for optometry practices in Melbourne
An optometry practice runs a clinical health service and a retail optical business from the same premises, and the bookkeeping and GST treatment for those two activities are completely different
Bookkeeping for optometry practices
Do any of these financial scenarios sound familiar as an optometrist?
- Medicare optometry consultation income and optical frame and lens sales are going into the same revenue account with the same GST treatment even though one is GST-free and the other is not.
- Private health fund rebates through HICAPS for optical items are not reconciling against the point of sale system and the difference has never been investigated.
- Optical frame and lens inventory is not tracked in the accounting software so the cost of goods sold figure in the profit and loss is guesswork rather than a calculated figure.
- Contact lens subscription revenue is being recorded in a way that does not reflect when the ongoing supply obligation is being delivered.
- Your dispensing opticians and optical dispensers are being paid without anyone having confirmed the current classification rates under the relevant award.
- Your BAS is being lodged with a single GST treatment applied across the entire business without anyone separating the clinical and retail components.
If any of these sound like your practice, you are not alone and there is a straightforward fix.
A bookkeeper in Melbourne for optometry practices
An optometry practice is genuinely two businesses operating as one and the gap between how most optometry practice bookkeeping is set up and how it should be set up is most visible in the GST position on the BAS.
- Medicare optometry consultation income is GST-free as a health service.
- The sale of prescription glasses, contact lenses, sunglasses and optical accessories is a taxable retail supply that attracts GST.
- Private health fund rebates paid for optical items through HICAPS may carry different treatment from the consultation rebate.
When a practice applies a single GST treatment to all revenue flowing through the business, the BAS is incorrect on a structural basis every quarter it is lodged.
The retail inventory dimension adds a second layer of specific complexity. A practice that sells prescription frames, lenses and contact lenses is carrying significant stock value in the dispensary.
That stock must be recorded as an inventory asset in the accounting software when it is purchased, and the cost transferred to cost of goods sold when it is sold and invoiced to the patient.
A practice that records frame and lens supplier invoices directly as expenses rather than as inventory purchases is bypassing the inventory asset account entirely, producing a profit and loss statement where the gross margin on the optical retail side of the business is invisible and the balance sheet does not reflect the stock value sitting in the dispensary.
Contact lens subscriptions and direct supply arrangements create a third area of specific complexity. Where a practice sells contact lenses on a subscription or ongoing supply basis, the income recognition must reflect the ongoing delivery of the supply obligation rather than recognising the full subscription value as income at the point of sale.
What a bookkeeper manages for a optometry practice
A optometry practice has financial processes that are different to other health related business types, so managing them correctly requires understanding and needs to cover these activities;
- Medicare consultation income reconciliation.
Medicare optometry consultation payments are reconciled against the billing records with income recognition reflecting when consultations were delivered. The income is correctly coded as GST-free.
- Optical retail sales and HICAPS reconciliation.
Frame, lens and contact lens sales through the point of sale system are reconciled against private health fund HICAPS settlements and direct patient payments. Optical retail income is correctly coded as taxable. Health fund rebates are reconciled against claims submitted.
- Optical inventory management.
Frame and lens stock purchases are recorded as inventory in the accounting software with cost of goods sold calculated as stock is sold. The balance sheet reflects the actual stock value in the dispensary. The gross margin on the retail side of the business is a calculated figure rather than an estimate.
- Contact lens supply income recognition.
Subscription and ongoing supply arrangements are recorded with income recognised as the supply obligation is delivered rather than at the point of sale.
- Health Professionals and Support Services Award payroll.
Dispensing opticians, optical dispensers and reception staff are paid at the correct classification level under the current award rates, reviewed after each annual Fair Work wage review.
- BAS preparation and lodgment.
Prepared from fully reconciled records with the correct GST separation applied between GST-free consultation income and taxable optical retail sales. Lodged by a registered BAS agent with the four-week extension on both lodgment and payment.
- Profit and loss reporting.
Clinical and optical retail performance reported separately so the practice owner can see the relative contribution of each part of the business.
A certified and qualified bookkeeper
Working with Clients Needs Bookkeeping means the financial administration of your practice is handled end to end by a registered BAS Agent who understands the specific requirements of a dental business. In practical terms, this covers:
A registered BAS agent with software credentials for naturopathic practices
Matthew Powell is a registered BAS agent. Verify at tpb.gov.au. Safe harbour protection and the four-week lodgment and payment extension apply to every BAS lodged through a registered agent.
Software: MYOB Diamond Partner, MYOB Certified Consultant, Xero Silver Champion Partner, Xero Advisor Certified, Xero L2 Certified Professional, Xero Payroll Specialist. Also works with QuickBooks.
About Matthew Powell, registered BAS agent and bookkeeper
Matthew Powell is the director of Clients Needs Bookkeeping and a registered BAS Agent with more than 15 years of experience working with small and medium businesses across Melbourne and the Mornington Peninsula.
He works across MYOB, Xero, and QuickBooks, and has particular depth of experience in health and medical practice bookkeeping, including dental, medical, and allied health clients.
Matthew is known for being accessible, clients regularly comment that he responds quickly, handles problems promptly, and communicates in plain language rather than accounting jargon.
He works with business owners from any industry sector or niche who provide services or sells products. He does your bookkeeping remotely and takes on new clients with the intent of building a long-term relationship rather than processing a transaction.
Bookkeeping Packages start from $150 per month. The first consultation is free.
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Frequently asked questions chiropracters ask before hiring a bookkeeper
Are optometry consultations GST-free?
Yes. Optometry consultations provided by a registered optometrist are GST-free as health services. The sale of optical products including frames, lenses, contact lenses and sunglasses is a taxable supply. The two must be correctly separated in the accounting software and on the BAS.
Are private health fund rebates for glasses GST-free or taxable?
Private health fund rebates for optical items are paid in respect of a taxable supply and the GST treatment follows the underlying supply. The full sale price of the optical item including the health fund rebate portion is a taxable supply. The practice collects GST on the full sale price and the health fund contributes to the patient’s share of that cost.
Can you manage our frame and lens inventory?
Yes. Frame and lens stock purchases from wholesale optical suppliers are recorded as inventory in the accounting software. Cost of goods sold is calculated as stock is sold and invoiced. The inventory asset balance is maintained and reconciled against physical stock counts. The gross margin on the optical retail side of the business becomes a reliable figure for management reporting.
What does bookkeeping cost for an optometry practice?
Packages start from $150 per month. The first consultation is free.
Ready to get the financial side of your practice managed by a bookkeeper?
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You already know there are things in the books that are not right.
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The personal expenses that went through the business account during a tight month are still sitting there.
The BAS is lodged but you are not entirely sure the figures are accurate.
None of these are unusual, and none of them are unfixable but every month they sit unresolved is another month of compounding risk.
Packages from
$150 per month
Structured around what your business actually needs
Registered & certified bookkeeper
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