When To Hire a Dental Accountant

Most dentists start out with a general accountant — the same one who does tax returns for financial planners, IT specialists, or freelancers.

It seems fine at first. Your books get done. Your BAS gets lodged. You get annual financial reports and a tax return.

But beneath that surface, there’s a problem: many accountants don’t understand how dentistry works.

Dental income isn’t like any other business income. You’ve got patient fees, health fund rebates, cosmetic treatments (with GST), and general treatments (without GST). You’ve got high-cost equipment, tight cash flow cycles, and strict compliance requirements.

A general accountant often doesn’t understand these nuances which can be problematic for you and open you up to unnecessary risk. 

A dental accountant knows how to classify your income streams accurately and understands how the dental industry works.

So, let’s explore the benefits of hiring a dental accountant.

1. Dental Accountants Have Specialised Knowledge

General accountants are great when you’re in the early years of business, but things can get complicated fast. 

Here are some of the problems that can arise when working with a general accountant:

• Missed deductions – they don’t always know what tax deductions are available to dentists, or they may be too cautious to claim them.
• Overpaying tax – this can occur if your business structure isn’t optimised. Maybe you’re still trading as a sole trader when you should’ve set up a company or trust years ago.
• Cash flow stress – general accountants focus on tax and compliance. They usually don’t review your cash flow situation or forecast your income. They don’t understand that Medicare and health fund payments can take weeks to arrive.
• ATO issues – as a dentist, you face extra risk because GST on dental services and expenses isn’t always straightforward, and if it’s applied incorrectly you’ll likely face ATO penalties.
• They’re reactive, not proactive – you’ll probably only hear from your accountant at tax or BAS time, when it’s too late to make a real difference.
  

It’s like getting a GP to perform a root canal. Technically it’s possible, but definitely not ideal.

A dental accountant understands your industry and your business — from dental software to ATO rulings specific to medical professionals. They know what tax deductions can be claimed, what can’t, and how to legally structure your dental practice for long-term protection.

A dental accountant can help you:

• Claim every eligible expense — from sterilisation gear to conference travel.
• Set up the right business structure to protect your assets and reduce tax.
• Create budgets, forecasts, and provide you with industry benchmarks to maximise your dental practice profitability
• Plan equipment purchases around instant asset write-offs and cash flow fluctuations.
• Keep your BAS, payroll, and super in check.
• Stay compliant with both ATO and industry requirements.

And most importantly, dental accountants don’t just show up once a year. They plan, forecast, and provide advice all year round.

The right accountant doesn’t just save you tax.

They help your practice grow, stay compliant, and keep your cash flow healthy so you can focus on what you actually care about: your patients.

2. Dental Practices Are Complicated

Running a dental practice isn’t simple or straightforward.

You’re managing staff, equipment, patients, compliance, Medicare rebates, health insurance, and cash flow — all at once. And while you’re focused on healthy smiles and patient bookings, your finances can easily fall to the bottom of the list.

That’s where things start to hurt.

Dentists have one of the most complex financial profiles of any small business owner.

There’s private billing, health fund rebates, practice ownership issues, equipment leases, contractors, and maybe even a mix of PAYG and self-employed income.

A general accountant might be fine for your first few years. But once you’re running or buying a clinic, you need someone who understands the dental industry. Ideally, someone who’s seen behind the scenes of dozens of dental practices and knows where the problems are and how to fix them.

A dental accountant does exactly that.

They’ll help you:

• Legally minimise your taxes
• Set up a business structure that protects your personal assets
• Improve cash flow and practice profitability
• Avoid compliance headaches
• Grow your business
• Review your contractor agreements

3. Dentists Have Unique Tax Challenges

Dental practices aren’t like regular businesses.

You might get income from multiple sources, i.e. private billings, associate arrangements, or even locum work. Each has different tax and GST implications.

A general accountant might just lump it all together and call it “income”. But a dental accountant knows how to separate, allocate, and plan each income stream for maximum benefit.

For example:

• Cosmetic dentistry is usually subject to GST
• General dental services are often GST-free under health law
• Private practice income can be split across entities to reduce tax and liability exposure

A specialist dental accountant ensures each category of income is handled correctly, so you stay compliant and never pay more tax than you should.

They’ll also manage the finer details like claiming depreciation on your dental chair, sterilisation equipment, and X-ray machines. Those big-ticket items aren’t cheap, so getting the timing and method of claiming them right matters.

And then there’s Medicare and private health rebates. How you report and reconcile them affects your cash flow and tax obligations.

A good dental accountant knows all of this — and keeps things running smoothly.

4. Dentists Face Higher Liability And Risk

Your business structure can make or break your financial situation.

If you’re still trading as a sole trader or contractor, you’re likely overpaying tax and exposing yourself to unnecessary risk. A dental accountant can review your current setup and recommend smarter, safer options.

Here’s what they might consider:

• Company structure: Ideal for established practices or high-earning contractors generating consistent profits. Helps separate personal assets and allows you to retain income at the company tax rate.
• Trust structure: Useful for distributing income among family members or partners, legally reducing overall tax.
• Service entity: Common in healthcare. This separates the “clinical” side from the “admin” side of your practice, reducing risk and improving tax efficiency.

Each structure comes with pros and cons, but the right combination can save you thousands every year while keeping you compliant with the ATO and health regulators.

As your practice grows, your business structure should evolve with it. Your business won’t stay static, and neither should your tax plan.

5. Dental Accountants Help You Maximum Tax Deductions

Dentistry is a high-investment profession. Your equipment alone can cost thousands of dollars and that’s before software, practice fit-outs, or new technology purchases.

• A general accountant might just record those purchases after the fact.
• A dental accountant helps you plan for expenses before you spend a cent.

Why? Because timing can make a huge difference in your tax outcome.

If you buy a new dental chair in June, you could claim an immediate deduction under the instant asset write-off scheme. If you wait until July, and you might not see that benefit until the next financial year.

Smart accountants plan your major purchases to align with tax deadlines and cash flow cycles.

Also, leasing versus buying outright can affect both your balance sheet and your tax deductions, so it’s important to get it right.

And it’s not just about the big items. Smaller tools, consumables, and technology subscriptions all add up — and a dental accountant will make sure every legitimate business cost is captured and claimed.

The goal isn’t to spend more. It’s to spend smarter.

6. Dental Accountants Can Help With Cash Flow

Even profitable dental clinics can run into cash flow problems.

You might have full appointment books but still struggle to keep your bank balance steady. Why? Because payments don’t always match your workload. Health fund rebates take time. Patients cancel. Equipment leases and staff wages need to be paid.

A dental accountant keeps you one step ahead.

They can help track your cash inflows and outflows, forecast slow months, and help you prepare for ATO obligations before they hit. You’ll know exactly what’s coming so you’re never caught short.

This isn’t about fancy spreadsheets. It’s about peace of mind.

A good dental accountant will help you:

• Predict your tax bills months in advance
• Build reserves for BAS and super
• Identify which dental procedures are most profitable (and which aren’t)
• Smooth out seasonal income dips so you can plan confidently

When you understand your numbers, you can stop guessing — and start growing.

7. Payroll, Super & BAS Sorted

Running a dental practice means managing more than just patients. You’ve got receptionists, hygienists, assistants, contractors, and junior dentists all expecting to be paid on time.

With payroll, PAYG, super, and leave entitlements in the mix, mistakes can get expensive fast.

A general accountant might lodge your BAS, but a dental accountant sets up systems that keep everything seamless. They’ll help manage your payroll, ensure super contributions are paid, and lodge your BAS on time — every time.

They’ll also guide you through:

• Single Touch Payroll (STP) requirements
• PAYG withholding and staff bonuses
• Super guarantee obligations for part-time and casual workers
• Correct treatment of contractor payments
• GST treatment of dental services

You shouldn’t be buried in admin or worried about ATO fines. You should be free to focus on building your dental practice.

A good dental accountant makes sure of that.

8. Accountants For Dentists – Business Growth & Strategic Advisory

Once your clinic is running smoothly, the next challenge is growth.

Maybe you’re thinking about upgrading your equipment, hiring another dentist, or opening a new location.

That’s when a dental accountant becomes your financial co-pilot.

They’ll help you:

• Analyse your profit margins by treatment type (cosmetic, orthodontic, general).
• Build budgets and forecasts to test “what if” scenarios.
• Review whether your pricing and service mix are aligned with your goals.
• Help you with financing by providing clear, up-to-date financial reports.

They’re not just there to record what happened. They help shape what happens next.

And because dental accountants understand the industry, their advice is grounded in real-world experience. They’ve seen what works and what doesn’t.

Growth doesn’t have to mean chaos. With the right accountant, it means clarity, control, and success.

9. Peace of Mind At Tax Time

Tax time shouldn’t feel like a root canal.

If your accountant only shows up once a year, you’re missing opportunities and inviting stress.

A dental accountant prepares everything in advance: your financial records, your deductions, your payment plans. They don’t scramble in June; they help you all year round.

They’ll also ensure you’re using every available tax strategy, from super contributions to depreciation schedules and small business concessions.

That way there’s no surprises. Just clean numbers and smart planning.

Because the best way to deal with tax is to plan for it all year round, not leave it to the last minute.

FAQs – Hiring A Dental Accountant

1. Why do dentists need a specialist accountant?

Because dentistry has unique tax and GST rules that general accountants often miss. A dental accountant understands how to structure your income and expenses for maximum savings.

2. Can a dental accountant help me set up my practice?

Absolutely! From choosing the right structure (company, trust, or partnership) to setting up Xero and payroll, they’ll help you build a compliant, solid business foundation.

3. What tax deductions can dentists claim?

Dental equipment, software, uniforms, CPD courses, insurance, business expenses, and even conference travel can be deductible, if documented correctly.

4. I’m an associate dentist — do I still need a dental accountant?

Yes. Even if you don’t own a clinic yet, you may be eligible for significant tax deductions and structural strategies to reduce tax on your ABN income. Plus, a good dental accountant can help you prepare for acquiring or opening your own dental practice in the future.

5. Can a dental accountant help improve profitability?

Yes. They’ll show you which services are bringing in the most profit and where you’re overspending. They’ll help you cut costs and increase your profit margins.

6. How often should I meet with my accountant?

Ideally quarterly. This keeps you on track for BAS, tax planning, bookkeeping, and cash flow adjustments, and helps minimise any financial stress.

7. Where are you located? Do I need a local accountant?

We are based in Perth, but we work with dentists all over Australia. You don’t need to work with a local accountant, just make sure whichever accountant you choose offers online meetings and responds quickly to your requests.

Ready To Hire A Dental Accountant?

You’ve spent years perfecting smiles — but when it comes to your numbers, things can feel a little bit stressful. Maybe you’re an associate dentist wanting to get on top of your finances. Maybe you’re opening your first dental clinic or growing a busy practice.

Either way, you’ll want to understanxd your numbers, plan for growth, and protect your profits, not just tick a tax box once a year. With the right financial setup, your dental practice runs smoother, your cash flow improves, and your future feels a whole lot clearer.

Do you need help with your tax planning, cash flow, profit margins, or business structure? We can help.

Contact us today to find out more.