Strong Finishes and Fresh Starts
By the time April rolls around, most medical centres carry two quite different mindsets operating simultaneously. There’s relief that another financial year is behind you. At the same time, the quiet pressure of the new one has already begun. Phones are buzzing, the waiting rooms are full, and somewhere in the background the numbers are asking for attention.
For practices, the end of the financial year isn’t just about tick boxes. It’s an opportunity to pause, assess how the business is tracking, and make a few well‑timed decisions while there’s still room to act.
Wrapping up the year gone
The financial year end has come and gone quickly, and for many practices the weeks beforehand are a blur of clinical work, leave planning and last-minute admin. But April is when the real work of closing the year happens.
Getting the basics sorted now saves headaches later. Ensuring that all income has been recorded including capitation payments, ACC claims, patient fees and any outstanding accounts receivable is critical for accurate reporting. On the other hand, reviewing your expenses and ensuring all invoices are coded and reported in the correct period is just as important. Some common invoices that are worth reviewing include locums, repairs and maintenance, capital purchases and medical supplies.
Stock is one area that’s commonly overlooked in busy practices. Consumables, vaccines and medical supplies on hand need to be valued at a cost basis and form an important adjustment for your financial position. Whilst this is not something that all practices do on a regular basis it is important to ensure that an accurate stock take is performed at financial year end.
Getting these things right means that your accounts actually tell the true story in your financial reporting. For practices with multiple owners or stakeholders, clear and timely financial statements are essential. They help keep everyone aligned and support informed decision‑making.
Tax considerations that deserve attention
Once the numbers are in shape, tax is usually the next concern. For medical centres, this often goes beyond simple income tax.
Many practices operate through different entity structures (companies, trusts, partnerships or sole practitioners) and require tailored tax treatments. How the profit is allocated can significantly impact not only the overall tax position, but the timing of the tax payments required for the next financial year. This is the perfect time to review the current structure is still fit for purpose and it aligns with the stakeholders’ goals and personal circumstances, particularly with last year’s changes to increase the top personal income tax rate to 39% from 33%.
One key area where practices can minimise their tax without additional cash outflow is in reviewing their asset purchases for the year. IRD has a number of concessions that allow for either immediate or accelerated deductions for asset purchases. Low‑value assets costing $1,000 or less can generally be written off immediately, rather than depreciated over several years, which is often overlooked in busy practices. For larger purchases made after 22 May 2025, the new Investment Boost allows an additional 20% deduction in the year of purchase, on top of normal depreciation. Together these can make a significant difference to the practices overall tax position and don’t require any clever structuring, only a review of the already purchased assets.
Further to this another area that needs to be considered in a timely manner is any payments to staff that relates to work performed before 31 March. This includes any bonus’s or salary that relates to the period but might be paid after the results are calculated. For it to be tax deductible to last year, the payments need to be paid within 63 days of balance date which means they need to be paid before the 2 June to be deductible for tax purposes.
Another area that adds additional pressure is provisional and terminal taxes. If the practice has grown, taken on additional clinicians, or experienced an increase in patient volumes, provisional tax based on last year’s figures may no longer be adequate. By getting on top of your current year financials and tax the expected cash flow impacts can be actively managed. The next provisional tax instalment will likely be in May, so understanding your tax position early can avoid unpleasant surprises.
Starting the new year with intention
Whilst tax and reporting to IRD is important it is only part of a larger picture. April is also a time where many practices will prepare reporting for external funders or banks and stakeholders. Additionally, the start of the new financial year is the best time to make changes that can be implemented over the new year.
Another key metric that is not included in the financial reporting is the non-financial metrics. Staff turnover, patient demand, appointment utilisation and funding mix all tell part of the story. While these may not appear in the accounts, they are crucial for understanding how the practice is really performing.
By taking the information from the end of year accounts and your non financial metrics it enables you to start to plan for the next year. Creating a budget and forecast for the coming year could enable you to make decisions that would otherwise be extremely difficult. Some things that are worth considering are can the practice sustain additional doctors, what would fluctuations in patient numbers do to the bottom line, is there and opportunity to expand via new services, is there equipment or fit out that needs replacing or maintenance, what would happen if staff leave or take extended leave and much more.
This is also a good opportunity to review pricing and funding assumptions. Have the ACC rates changes? Are patient fees set correctly? Is the balance of services between funded and unfunded still correct. At times these are not comfortable questions, but it is easier to address these up front rather than waiting till issues occur.
The end of financial year sneaks up on us all, though April is a time where we can regroup and grow. By having a strong finish to the last financial year, we can ensure that we have a fresh and positive start to the current.
If you want confidence in your numbers and a clear plan for the year ahead, we can help. Talk to your local Moore Markhams adviser about your EOFY position, tax obligations and next steps for your practice.
