Revenue Streams in a Gynaecology and Obstetrics Practice
| Revenue Stream | GST Status | Payment Source | Key Bookkeeping Note |
|---|---|---|---|
| Private consultations | GST-Free | Patient; Medicare rebate separate | Record full fee on invoice date |
| Surgical procedures (gap) | GST-Free | Patient / health fund | Gap between MBS and scheduled fee |
| Theatre / hospital fees | GST-Free | Private hospital directly | Reconcile to hospital remittance by procedure date |
| Obstetric management package | GST-Free | Patient upfront | Record as deferred income; recognise progressively |
| Delivery / birth attendance | GST-Free | Patient or Medicare | Recognise at delivery completion |
| VMO hospital work | GST-Free | Hospital (gross) | Match to VMO agreement; track debtors |
| Medicolegal reports | Taxable (10% GST) | Insurer / law firm | Invoice must include 10% GST |
| WorkSafe / TAC assessments | Taxable (10% GST) | WorkSafe Victoria / TAC | Invoice must include 10% GST |
Obstetric Package Deferred Income
One of the most important and commonly mishandled bookkeeping items in obstetrics practices is the obstetric package fee. When a patient books a specialist for antenatal care and delivery and pays a package fee upfront, that money is not immediate income. The practice has an obligation to deliver services over the coming months. Recording the full package fee as income on receipt overstates profit in the period of payment and understates it in the periods when services are actually delivered.
The correct treatment is to record the receipt against a deferred income (or unearned revenue) liability account on the balance sheet. As each antenatal consultation is completed, a portion of the package is recognised as income. When the delivery is attended, the remaining balance is recognised. At any given date, the balance of the deferred income account represents the practice's obligation to continue providing care to patients who have paid but whose services are not yet fully delivered.
In Xero, this requires a dedicated current liability account for obstetric package deferred income, a recurring journal entry process to recognise income at each service milestone, and regular reconciliation of the deferred income balance to the number of active obstetric patients.
Theatre Fee Reconciliation
Private hospitals pay theatre and assistant surgeon fees on schedules that often differ from procedure dates. A procedure performed in February may not result in a payment until March or April. Theatre fee reconciliation requires:
- Maintaining a log of all surgical procedures with dates, patients, MBS item numbers, and expected fees
- Matching each hospital payment to the corresponding procedure via the hospital remittance advice
- Recording outstanding theatre fees as accounts receivable in Xero until payment is received
- Following up with hospital billing departments on overdue amounts
An aged debtors report in Xero, reviewed monthly, is the most practical tool for identifying which hospital payments are overdue and which procedure billings remain unmatched.
Equipment Depreciation for Gynaecology Practices
| Equipment | Approx. Cost | Eff. Life | DV Rate | IAWO Eligible? |
|---|---|---|---|---|
| Ultrasound system (obs/gynae) | $40,000 to $80,000 | 10 yrs | 20% | No (above threshold) |
| Colposcope | $8,000 to $18,000 | 10 yrs | 20% | Possibly (if below threshold) |
| Hysteroscope system | $15,000 to $30,000 | 10 yrs | 20% | Varies by cost |
| Examination couch | $3,000 to $8,000 | 10 yrs | 20% | Likely yes |
| Diathermy unit | $5,000 to $12,000 | 10 yrs | 20% | Varies by cost |
| Computers / practice software | $1,500 to $6,000 | 4 yrs | 50% | Usually yes |
| Consulting room fit-out | $50,000+ | 40 yrs (Div 43) | 2.5% | No (capital works) |
Source: ATO TR 2023/1. IAWO threshold — check current ATO guidance as it changes. All assets must be individually registered in Xero Fixed Assets.
Watch: Gynaecology Practice Bookkeeping Explained
Read the full video transcript
Gynaecology and obstetrics practices have some of the most complex bookkeeping requirements in specialist medicine. The combination of Medicare billing, private hospital admissions, obstetric package management, theatre fee reconciliation, and equipment depreciation means the accounts need careful ongoing attention. Today I want to cover the key revenue streams, the common bookkeeping challenges, and the deductions that gynaecologists are entitled to claim.
A gynaecologist's revenue typically includes private consultations billed under MBS item numbers, surgical procedures with a gap between the rebate and the scheduled fee, theatre fees from private hospitals, obstetric management packages, and medicolegal work. Each of these requires different bookkeeping treatment.
The obstetric package creates a specific bookkeeping challenge. When a patient pays an obstetric package fee upfront, that money is not yet income. The service has not been delivered. Accounting standards require that bundled package payments be recorded as deferred income, which is a liability on the balance sheet, and recognised as income progressively as services are delivered. If your bookkeeper is posting the full package payment to income on receipt, your profit and loss is overstated and your balance sheet does not reflect the obligation to continue providing care.
Theatre fee reconciliation is another area that frequently falls behind. Private hospitals pay assistant surgeon fees and theatre fees on schedules that do not always match the procedure dates. Each payment needs to be matched to the correct patient encounter and procedure date, and any unpaid fees tracked as debtors.
On the GST question, clinical gynaecology consultations and surgical procedures are GST-free under Division 38-B. Medicolegal reports and expert witness work attract GST at ten percent. The most common GST error in specialist medical practices is medicolegal income being posted to a GST-free code when it should attract GST. True Tally works with specialist medical practices across Victoria to set up accurate bookkeeping, manage deferred obstetric income, reconcile theatre fees, and ensure GST is correctly applied. Book a free call at truetally.com.au or call 0468 159 950.
Last updated July 2026
Frequently Asked Questions
Is gynaecology income GST-free?
Yes. Clinical consultations, surgical procedures, and obstetric care are GST-free under Division 38-B. Medicolegal reports and WorkSafe assessments are professional services and taxable at 10% GST.
How do I record an obstetric package in Xero?
Record the upfront payment as a deferred income liability. Recognise income progressively as antenatal appointments are attended and at delivery. Do not post the full amount to income in the period of receipt.
How do theatre fees get reconciled?
Match each hospital payment to the corresponding procedure via the hospital's remittance advice. Track outstanding fees as accounts receivable and review the aged debtors report monthly.
Gynaecology practice bookkeeping across Victoria
True Tally provides specialist bookkeeping for gynaecology and obstetrics practices: deferred obstetric income, theatre fee reconciliation, Medicare matching, and correct GST treatment. Book a free 20-minute call.
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