Beyond the Chair: The Business Side of Running a Dental Practice
You are trained to look after patients, not chase deposits, negotiate equipment finance or untangle trust distributions. Yet every dental practice owner ends up doing all three.
We act for several dental practices across the Gold Coast and Coffs Harbour. Working alongside principals, practice managers and associate dentists, we see the same handful of come up again and again. Below are some of the ones we’re asked about the most, plus what the recent Federal Budget could mean for your practice.
Does your practice software agree with your bank account?
Your practice management software says you billed one figure. Your bank statement says you banked another. The gap is rarely fraud, but rarely is it zero either.
Health fund claims, HICAPS and EFTPOS fees settle in batches, Medicare is paid per provider. Sometimes there are refunds to issue or credits to apply to a patients account. Add the occasional cash payment and it is easy to lose sight of what should actually have been collected.
When a reconciliation isn’t completed regularly between your practice management software and your bank account, problems can compound – income can be under or over reported, dentist fee splits get calculated based on the incorrect number and you may miss chasing up on outstanding debtors.
We can help you to build a simple, repeatable reconciliation routine so the figures in your software, your bank and your accounting system tell the same story.
Funding the next chair, scanner or fit-out
A dental practice requires significant capital. Intraoral scanners, CBCT units, practice fit-outs can run well into six figures and the technology cycle keeps getting shorter.
How you fund that equipment is as important as what you buy. Chattel mortgages, finance leases, hire purchase, a bank facility or cash each carry different consequences for GST, depreciation, cash flow and which entity in your group should own the asset.
We work through the numbers with you before you sign, model the model the cash flow impact, and liaise with your financier so the structure suits both the bank and your tax position.
Getting associate and contractor arrangements right
Most practices rely on associate dentists, hygienists or specialists who work under a service agreement rather than as employees. These arrangements have had significant scrutiny in recent years.
State revenue offices in both Queensland and New South Wales have taken a close interest in payroll tax on payments to contracted practitioners, and superannuation guarantee obligations can apply even where someone is engaged as a contractor. Whether an arrangement holds up depends on how it works day-to-day, not just on what the agreement says.
We can help you to understand your exposure and fix it before the state revenue office of the ATO asks the question.
Know how the practice is really performing
An annual tax return tells you what happened last year. It won’t tell you which chairs are underused this month or why profit dipped when billings rose.
The practices we work with get the most value from regular management reporting built around the measures that matter in dentistry: production per dentist and per chair, collections against billings, consumables and lab fees as a share of revenue, wages ratios and patient numbers. We prepare monthly or quarterly reports and sit down with you to talk through what they mean, so decisions are based on numbers rather than gut feel.
Budget update: what CGT changes mean for your practice's value
As a result of legislation passed after the latest Federal Budget, capital gains accruing after 1 July 2027 will be calculated using a cost base indexation method (rather than the traditional discount method that applies up to 30 June 2027). For practice owners, this goes straight to one of the biggest assets you own: the practice itself.
When changes like these take effect, the value of your practice at 1 July 2027 will be critical. Goodwill, patient lists, equipment and any interest in the premises all need to be considered, and a valuation that wouldn’t stand up to ATO review can cost more than it saves.
If you’re planning to sell, bring in a partner, restructure or retire in the coming years, now is the time to understand where you stand.
Budget update: is there a trust in your structure?
Many dental practices operate through, or distribute trust via, a discretionary trust. It has long been one of the most flexible ways to share income across a family and protect assets. The Budget’s proposed changes to the taxation of trusts will change the way trusts are incorporated into business structures.
Depending on how your practice is set up, these changes could affect how much tax is paid on distributions, whether your current structure is still the right one, and the cost of moving to a different structure. No one should restructure in a hurry, but every practice with a trust should understand how it is affected.
We’re already reviewing structures of the dental practices we act for. If you’d like the same review for yours, we’d be happy to take a look.
Accountants who already know dentistry
The issues above aren’t hypothetical for us. They’re conversations we’re currently having with our dental practice clients. As we already understand how practices bill, pay their dentists, fund equipment and structure ownership, you spend less time explaining your business and more time getting answers.
If any of these points struck a chord, or you’d simply like a second opinion on your current setup, get in touch for an obligation-free chat. Book in a time for Jeanette (one of our principals) to call you.
DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent,
Jeanette has over 20 years experience as an accountant in public practice. She is a Chartered Accountant, registered tax agent and accredited SMSF Association advisor. When she is not helping business owners grow their empires, you will likely find her out running on the trails or at the gym. Book in to see Jeanette today.
