An affordable bookkeeping service for independent pharmacies in Melbourne
An independent pharmacy is simultaneously a dispensary, a retail business and a professional health service, and the bookkeeping for each part needs to be managed completely differently
Bookkeeping for pharmacies in Melbourne
Do any of these financial scenarios sound familiar as a pharmacy owner?
- PBS Medicare payments are arriving in the bank on a schedule that does not match when scripts were dispensed and you are not sure the income is being recorded at the right time.
- Prescription medicines, over-the-counter products and professional services all carry different GST treatment and you are not confident they are all being coded correctly.
- Retail inventory including OTC products, vitamins and cosmetics is not being tracked in the accounting software so the cost of goods sold figure in the profit and loss is unreliable
- Pharmaceutical wholesaler invoices from API, Sigma and Symbion are being entered inconsistently and the accounts payable position is never quite current.
- Pharmacist and dispensary technician payroll has not been reviewed against the current Pharmacy Industry Award rates since the last staff member was hired.
- Your BAS is being lodged without anyone properly separating the GST-exempt prescription income from the taxable retail sales
If any of these sound like your pharmacy, you are not alone and there is a straightforward fix.
A bookkeeper in Melbourne for pharmacy owners
An independent pharmacy has a financial complexity that is genuinely different from most small businesses and most health practices.
- The dispensary side generates PBS income that is GST-free and arrives from Medicare on a fortnightly payment cycle that does not align with when scripts were dispensed.
- Private prescriptions and dispensary professional fees may carry different treatment again depending on their nature.
- The retail side of the pharmacy generates taxable sales of over-the-counter medicines, vitamins, cosmetics, personal care products and sundry goods, all of which carry GST.
- Professional services including medication reviews, vaccination administration, and health checks are another layer with their own treatment depending on the nature and funding of the service.
When the PBS dispensary income and the retail sales are not being correctly separated in the accounting software, the BAS reflects either the wrong GST liability or the wrong input tax credit position on every quarter it is lodged without proper separation.
For a pharmacy with significant retail volume, the cumulative GST impact of systematic miscoding across multiple quarters can be material.
The inventory side of pharmacy bookkeeping creates a third area of specific complexity. Pharmaceutical stock, OTC products and retail merchandise are purchased from wholesalers on credit terms and must be entered into the accounting software as they arrive so that the cost of goods sold figure in the profit and loss reflects what was actually sold rather than what was eventually paid for.
Without proper inventory management in the accounting system, the gross margin figure is unreliable and pricing decisions are made without a foundation in the actual cost structure of the dispensary and retail operations.
What a bookkeeper manages for a pharmacy store
A pharmacy has financial processes that are different to other health related business types because of the retail and health care components. So managing them correctly requires understanding and needs to cover these activities;
- PBS income reconciliation. PBS Medicare payments are reconciled against dispensing records with the correct income recognition timing applied so that revenue in the accounting software reflects the period in which scripts were dispensed rather than the Medicare payment cycle.
- GST separation across dispensary and retail.
Prescription and PBS income is correctly coded as GST-free. Retail product sales are correctly coded as taxable supplies. Professional service fees are assessed and coded with the correct GST treatment for each service type. The BAS reflects the actual mixed-supply position of the pharmacy.
- Retail inventory management.
Pharmaceutical and retail stock purchases are entered against the inventory accounts in the accounting software so that stock on hand values are accurate and cost of goods sold flows correctly through the profit and loss. Supplier invoices from API, Sigma, Symbion and other wholesalers are entered promptly and matched against deliveries.
- Supplier invoice management and accounts payable.
All wholesaler and supplier invoices are entered, coded and scheduled for payment before they fall overdue. ABA file payments are prepared for upload to the bank so that multiple supplier payments can be processed in a single transaction. Input tax credits on taxable purchases are fully captured on each BAS.
- Pharmacy Industry Award payroll.
Pharmacists, dispensary technicians and retail assistants are paid at the correct classification level under the current Pharmacy Industry Award rates, reviewed after each annual Fair Work wage review. STP lodged with the ATO every payday. Payslips issued within one business day.
- BAS preparation and lodgment.
Prepared from fully reconciled records with the correct GST treatment applied across dispensary, retail and professional service revenue streams. Lodged by a registered BAS agent with the four-week extension on both lodgment and payment. For pharmacies with large GST refunds on purchases, the timing of lodgment and the benefit of the four-week extension on cash flow is particularly significant.
- Profit and loss reporting.
Dispensary and retail performance reported separately so the pharmacy owner can see the gross margin 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:
Why a registered BAS agent matters for a pharmacy owner
The GST complexity of a pharmacy, with multiple revenue streams carrying different treatment, means the BAS requires specialist knowledge to prepare correctly. Only a registered BAS agent is legally authorised to provide that service and the safe harbour protection that comes with it.
The four-week lodgment extension also applies to the payment of any GST owing or the deferral of any refund claim, which for a pharmacy receiving regular GST refunds on its purchases is a meaningful cash flow consideration.
Matthew Powell is registered with the Tax Practitioners Board. Verify at tpb.gov.au.
Software credentials: MYOB Diamond Partner, MYOB Certified Consultant, Xero Silver Champion Partner, Xero Advisor Certified, Xero L2 Certified Professional, Xero Payroll Specialist. Also works with QuickBooks and other platforms.
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.
Read some of our bookkeeping case studies
Below are real life examples from businesses like yours who needed to use a bookkeeper.
Frequently asked questions pharmacies ask before hiring a bookkeeper
Are prescription medicines GST-free?
PBS-listed prescription medicines are GST-free. Private prescriptions and some non-PBS medicines may carry different treatment depending on their classification.
- Over-the-counter medicines, vitamins and health products are taxable.
- Professional dispensing fees and medication management services have their own treatment depending on the nature of the service and how it is funded.
Matthew assesses the correct treatment for each revenue type in your pharmacy and applies it consistently.
Should a pharmacy lodge BAS monthly or quarterly?
A pharmacy with large GST refunds on pharmaceutical purchases may benefit from monthly BAS lodgment to recover those refunds more frequently rather than holding the credit for a full quarter.
Whether monthly or quarterly lodgment is appropriate depends on the volume and mix of purchases relative to taxable sales.
Matthew assesses the right lodgment frequency for each pharmacy and recommends accordingly.
Can you manage our pharmaceutical wholesaler invoices?
Yes. Supplier invoice management for API, Sigma, Symbion and other pharmaceutical and retail wholesalers is a standard part of the accounts payable service. Invoices are entered promptly, matched against deliveries, and scheduled for payment before they fall overdue so trade credit arrangements are protected and input tax credits are fully captured.
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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