Accounting for healthcare practices
The practice is busy. The bank account disagrees.
Monthly accounting for GPs, dentists, optometrists and allied health practices — where income arrives from schemes and patients in different amounts, at different times, and rarely for the full claim.
What you get
- Medical aid remittance reconciliation
- Practice structuring modelled on your numbers
- Payroll for staff, locums and associates
- Monthly management accounts in plain language
For
GPs, dental and specialist practices, optometrists, physios, psychologists and allied health professionals
The problem
Medical accounting is not general accounting.
A general accountant can process a bank statement. That isn't the hard part of a practice. The hard part is everything sitting between what you billed, what the scheme paid, what the patient still owes, and what you're never going to see again.
Billed is not banked
Claims get paid in part, paid late, rejected outright or reversed months later. If the books simply record deposits, your income is understated, your debtors are invisible and you have no idea what you're writing off.
The structure was chosen once and never revisited
Many practitioners are set up the way they were on day one — often as a sole proprietor — and have never had the alternative modelled properly against their actual earnings.
Practice money and personal money blur
Vehicle, indemnity cover, HPCSA fees, CPD, professional subscriptions, home-office costs. Some are deductible, some are partly deductible, and some are not — and the answer depends on your structure.
Payroll is more complicated than headcount suggests
Receptionists and nurses on payroll, locums invoicing, associates on a percentage split, and sessional practitioners. Each is treated differently for PAYE, and getting it wrong is a SARS problem, not an admin one.
You find out how the practice did a year late
Without monthly management accounts, decisions about a second room, another practitioner, a new chair or a bigger lease get made on gut feel and bank balance.
There is no time to chase any of it
You are seeing patients all day. Practice admin happens after hours, badly, or not at all — and it compounds quietly until SARS or the bank asks a question.
Practice structuring
Sole proprietor or incorporated practice?
This is the single biggest financial decision most practitioners make, and it is usually made once, early, on someone's informal advice. It deserves a proper look — because the answer genuinely depends on what you earn, what you draw, and what you intend to build.
Sole proprietor
You and the practice are the same legal person. Practice profit is your income.
All practice profit is taxed in your own hands at personal income tax rates, on a sliding scale up to the top marginal bracket — whether you draw the money or leave it in the practice.
Lightest. No separate company, no CIPC annual return, no separate set of company financials, no dividends to declare.
Personal. Business debts and contractual obligations reach your personal assets.
No mechanism to retain profit at a lower rate — it is taxed at your marginal rate in the year it is earned.
Practitioners in the earlier or lower-earning years, single-practitioner setups with modest profit, and anyone who draws essentially everything the practice makes.
Incorporated practice (Inc.)
A separate legal entity. For health professionals this is a personal liability company — the "Inc." you see on practice letterheads.
The company pays corporate income tax on its profit. You are then taxed separately on what you take out — as salary through PAYE, or as a dividend subject to dividends tax.
Heavier. CIPC registration and annual returns, company financial statements, payroll for your own salary, provisional tax for the company and for you.
A personal liability company does not shield directors from the company's debts in the way an ordinary (Pty) Ltd does — and professional negligence remains personal regardless of structure.
Profit left in the practice is taxed at the corporate rate rather than your marginal rate — which is where the planning opportunity sits, if you genuinely don't need to draw it.
Established practices with profit above what the practitioner needs to draw, multi-practitioner or associate setups, and practices building toward a sale or succession.
Why "companies pay less tax" is only half the story
Take the same profit out as a dividend and the combined effective rate lands near the top personal bracket. The advantage of incorporating is not automatic — it comes from salary structuring, from profit you leave in the practice, and from the specific facts of your situation. Anyone who tells you a company always pays less tax hasn't done your arithmetic.
Two things worth flagging before anyone restructures. HPCSA rules restrict who may hold shares in a health practice, so an incorporated practice is not open-ended on ownership. And moving an established practice into a company is a transaction with its own tax consequences — it is not a form-filling exercise. We work through both with you before anything is registered.
Medical aid income
The gap between what you billed
and what you banked.
In most practice books, income is whatever arrived in the bank. That records the outcome and loses the story — and the story is where the money is. We reconcile the full path of a claim so you can see where it stops.
Billed
What the practice claimed, at your tariff, for the work actually done in the period.
Paid by the scheme
What each scheme settled, matched off the remittance advice rather than guessed from the bank total.
Patient shortfall
The balance the patient is liable for, tracked as a real debtor instead of quietly disappearing.
Rejected or written off
Claims short-paid, reversed or refused — quantified monthly, so you can see the pattern and act on it.
Once that runs monthly, questions you currently can't answer become routine. Which scheme pays slowest. What percentage of billings you're losing to rejections. Whether patient shortfalls are being collected at all. How much of last year's "income" was never actually going to arrive.
What's included
Accounting built around
how a practice actually runs
Monthly bookkeeping
Transactions processed, allocated and reconciled, so the practice has a reliable financial record every month rather than once a year.
Receipts and remittances
Scheme remittances, patient receipts and card settlements organised and reconciled into the monthly books.
Practice payroll
Payslips, leave and recurring SARS and UIF submissions for reception, nursing and admin staff, with locums and associates treated correctly.
Tax submissions
VAT, PAYE, provisional and income tax prepared and submitted as included in your plan and applicable to your structure.
Annual financial statements
Year-end accounts prepared from books maintained throughout the year — plus the CIPC annual return if you're incorporated.
Management reporting
Monthly reporting on practice income, staff cost, room cost and drawings, so decisions about growth are made on numbers.
Who we work with
Owner-led practices across the professions
The billing model differs, the compliance backbone doesn't. If you bill patients or schemes, employ staff and answer to SARS and the HPCSA, the monthly routine is broadly the same.
How it works
A calmer monthly routine
for the practice
Review the practice
We look at how you're structured, how billing and collections work, who's on payroll versus invoicing you, and where the admin currently gets stuck.
Fix the setup before the routine
If the structure or the payroll treatment is wrong, we deal with that first. There's no point running a clean monthly process on a broken foundation.
Run the monthly work
Books processed and reconciled, remittances matched, payroll run, returns prepared and submitted. You send the documents once; we handle the rest.
Report back in plain language
Monthly management accounts and a dedicated accountant who explains what changed and what it means — without the jargon.
Working with us
Built around a full consulting day.
We know you're not free between eight and five, and we don't expect you to take a slot out of your list to talk about VAT.
- Fixed monthly fee agreed upfront — no hourly billing, no surprise invoices for a phone call
- Calls scheduled around your list, including early mornings and after consulting hours
- Documents shared through one simple online system, not a chain of emails
- One named accountant who knows your practice, not a rotating support queue
- Catch-up work on overdue books or returns scoped and quoted before it starts
- Questions answered as part of the retainer — you should never hesitate to ask
Getting started
What we need from you
Onboarding stays practical and works around the practice management software you already use.
- Practice bank statements and access to the agreed records
- Billing reports and scheme remittance advices
- Supplier invoices, consumables and expense records
- Payroll inputs, plus locum and associate arrangements
- Previous financial statements or tax submissions, if available
- A short handover on how the practice currently runs
Common questions
Questions practitioners ask us
Should I incorporate my practice?
Do you reconcile medical aid remittances?
How should locums and associates be paid?
Is my practice required to register for VAT?
What can the practice actually deduct?
Do you handle CIPC as well as SARS?
Our books are behind. Is that a problem?
Will we have one person to speak to?
Related services
Last reviewed: August 2026 · Smartbook keeps this page current with CIPC and SARS rules
Your patients need your attention. Your accounts need ours.
Book a free practice review. We'll look at how you're structured, how billing and collections currently work, and what a proper monthly routine would cost — before you commit to anything.
30 minutes · No cost · Scheduled around your list