Ben Lynch: G'day good people. Welcome to the Grow Your Clinic podcast by Clinic Mastery. Here's what's coming up inside of this episode. This episode will be right up your Allie if you're looking to better understand your finance and numbers. We're diving into your end of financial year checklist with your accountant. And trust me, you want to hear Jack's take on how much you should be paying your accountant. Plus stick around for when we discuss how to know what you should be paying yourself as a business owner. Are you getting a good deal with your accountant, whether it's time actually to sack them and break up?

Jack O'Brien: If you've just been doing the same thing with your accountant for the last three, four, five years, you're going backwards.

Bec Clare: I went into this financial year going, I do not want to ever be surprised by another tax bill again.

Ben Lynch: How much should I pay my accountant? This is a question we regularly get.

Jack O'Brien: Personally, I like to make sure my accountant and my mortgage broker have a really close relationship. You two go have a meeting, leave me out of it.

Bec Clare: And what the lesson was is to find an accountant who could explain in layman's terms the different types of structures and how they would help serve that longer term vision.

Ben Lynch: I mean, it's all about me. So you're reading a book about you given to you by your family. Before we dive in, today's episode is brought to you by AllieClinics.com. If you're the kind of clinic owner who loves to feel organized and stay ahead of the chaos, you'll love Allie. Think of it as your digital clone. It's the single source of truth for all your clinic's policies, systems, and training. Test it for free at AllieClinics.com. And in other news, applications are now open to work with us one-on-one at Clinic Mastery. If you want support to grow your clinic and bring your vision to life, just email hello@clinicmastery.com with the subject line podcast, and we'll line up a time to chat. All right, let's get into the episode. It is episode 365. My name is Ben Lynch. Welcome back. I've got Bec Clare here, owner of Physio West. Jack O'Brien, owner of The Spreadsheets. Clinic Mastery, former Terrace Physio Plus owner and exited that clinic. Good to see you both. Last time we were on, I asked what were you reading or listening to? J.O.B., you gave us some wartime stories.

Jack O'Brien: Yeah. Yeah. Can I share? Yeah. So hopefully this comes up, but it was my birthday last Monday and I just got a late birthday present from my wife and the children. They've They've created a book. It's called Helmets, Hymns and Hustle with an AI photo of me. It's entirely an AI book. But now Ben Lynch, you're not the only author on the podcast. Oh, look at that.

Ben Lynch: J-O-B, what is inside that book? What's the context? Tell us some of the story.

Jack O'Brien: Well, it's my story. I'll tell you some of the chapter headings. Some of the chapter headings include, The Helmet Mindset, Sheet Music and Spreadsheets, Breakfast Briefings and Bike Tunes, The Power of Small Winds, Espresso Rituals, Sudden Sprints, Pedals and Patience. It's very fitting for you, all of those. It's all about, I mean, it's all about me.

Ben Lynch: Okay. So you're reading a book about you given to you by your family. Yes, you heard that correct, folks. Beck, I'm sure you won't be ordering one of those books, but anything else changed in what you're reading?

Bec Clare: Not particularly. Well, I'm going a little bit traditional in terms of planning a holiday. I've taken the fact that I need to get better at my Italian. A trip of Southern Italy to visit my grandmother's village. And so I've got the Lonely Planet books back out. And now I know you can be planning using Claude or using some AI, but I also think there's something really romantic and really nice about flipping through a book where you can get inspiration and then go to some AI and help you plan the trip. So yeah, a little bit of time in the South of Italy is what's on the cards. So I need to brush up on my.

Ben Lynch: The analogue experience, right? JB, you and I were back and forth. I think Gary Vee did a video recently on this, sort of predicting almost the opposite of all this high-tech AI side of things, that there'll be also a massive trend towards highly analogue experiences as well. So, Beck, maybe you're on the cutting edge there going to a brochure, a physical brochure. Very nice. Well, as we dive in today into understanding some of the things you should do at the end of the financial year or start of the financial year, depending on where you are in the world, we have folks tuning in from the US, UK, Canada, NZ, and of course, Australia as well. It comes at different times for you, but definitely here in Australia, we're preparing for the end of financial year. We're going to get to that in just a moment and understanding whether you're getting a good deal from your accountant. But first, a warm welcome to folks that have installed Ally to support their team and run clinic operations. It's really the practice management system. You have your patient management system and it bolts onto that so it allows you to run your practice really seamlessly. So, Sean, Francis, Richard, Robin, Kate, and Jeremy, welcome to you. Thanks for installing, Allie. J.B., what have you got on your desk?

Jack O'Brien: Yeah, a warm welcome to a few new members into Elevate, the Business Academy, and our marketing agency, getting help with your Google Ads and websites. Welcome to Aaron, who's joined the Business Academy. Gordon has joined the Ads Agency. Sharon, getting some Google Ads help, and Manvir has joined Elevate. Plenty of new faces around the community.

Ben Lynch: Nice. To complement this episode, I've got some things for non-members of the Academy and for members of the Academy and Elevate, I should clarify there. I'm just going to share my screen here, JB, that should be coming through nicely. To accompany this episode, there are a handful of episodes you should also listen to, and more importantly, take action off the back of. So the first one is episode 312. That was around the clinic owner's way to use your profit and loss. We screen share this. This is actually one to watch on YouTube. The other one is episode 349. What is your clinic actually worth? Where we talk with Andy Wang from Clarico Accounting. and you get to actually understand the pathway to creating a profitable clinic and how you might actually realize some of the value in the asset that you're building. And then episode 297. This is the tax trap that clinic owners must avoid. A great episode, J.I.B., where you talk through a number of the things that you need to ask your accountant and be proactive about, some of which we're gonna cover today. Now, for those members that are listening and watching, you'll want to head over to the learning portal. GREE 5 is all about finance. Now specifically, there's a couple of areas here as I just scroll down to the accelerate section where we talk about your advisors and working with your accountant. Some really practical guides and checklists and questions to proactively ask your accountant. But if you want to know more about your numbers and understand your finances really well, most people, I'd probably say 80% to 90% of people that start working with us say they want to understand their numbers and finances much better. And you want to head to the Cash Flow Immersion and Finance Immersion that go through the key financial statements in your business, understanding and structuring your profit and loss, your cash flow statement and your balance sheet. So they are a couple of member resources that you want to get your hands on. But J.B., let's talk about this time of year, end of financial year. Maybe broadly there's a couple of different categories that a clinic owner might fall into. One is we've had a stellar year, really happy with the success, especially commercially and profitably. The next is, it's gone okay, but it's not great. And then maybe finally, someone's really in a tight spot financially. Maybe they don't really understand their numbers. Perhaps they've got some liabilities and debts they didn't even realize that they were going to have. We often hear of that unexpected tax bill. Part of the point that we have is that you should never have an unexpected tax bill. And a lot of that comes back to the connection you have with your accountant. So maybe let's go there, maybe with tongue-in-cheek, it's like, are you getting a good deal with your accountant? Or how do you know whether you are or not and whether it's time actually to sack them and break up? So JB, how should people actually think about that? Because so much of this is just, I don't know what I should be getting. I don't know what quote, good looks like from the accountant service that I'm engaging.

Jack O'Brien: It's a really tricky one because often many of us have personal relationships with our accountant or we've been with them for so long we feel guilty about entertaining the idea of change or leaving. So I get that this is quite a personal, emotional consideration. If something hasn't changed in your relationship with your accountant, in the last couple of years, there's a good chance that things have stagnated and if something is stagnated, it's dying and going backwards. And so that's a really quick gut check. If you've just been doing the same thing with your accountant for the last 3, 4, 5, 10 years, you're going backwards. So that's a really easy one. It should be worth considering whether the investment in your accountant is providing you returns. Are there measurable dollar impacts that your accountant is having on your bank account. At the end of the day, our accountant's job is to help us pay the most minimal amount of tax legally necessary. None of us have any intention of donating to the charity that is the federal government. And so we don't want to pay any more tax than we have to. But ultimately, we want a creative accountant, not in the creative accounting sense, but a creative, progressive, open-minded, idea-generating, leaning in, finding opportunities, listing options. That's the type of accountant that you want to work with.

Ben Lynch: I think we've all had those experiences where we've changed accountant and then realized what we didn't have, what we were missing out on. What's your journey been like in getting different accountants at different times in your journey of business to help you understand the finances and numbers and make good decisions?

Bec Clare: We've changed accountants now twice in our time. We've been Clinic Mastery members personally for around nine years, and we've changed accountants twice in that time. The first time I found it really personally challenging. We didn't necessarily have a personal connection, but they'd been there to support us through so much already that it felt like a breakup. Um, and I really had to take a step back and actually look at what the relationship was, which was a commercial one that we pay for services. And were we getting what we needed from that? And the way that I've come to reflect on it is that each time our accountant was doing an okay job for the time and space that we're in as a business. And then as we grew and evolved to a different level, we needed something more from that relationship and whether that was true that that person or that organization could provide it or not. it was worth exploring. And therefore, it came apart as like, as you grow and evolve, so should the relationships and perhaps your partners that you're partnering with, to the point that we're now working with a wonderful team who are now proactively putting things on our radar. And that's how they speak to us. They're like, Hey Bec, I'm just going to pop this on your radar, something we're going to need to unpack in the future. But just so that you're aware, this next stage of growth for you looks like this, and here's what we're going to need to be working on. And I just love that because I'm a person who does not like surprises. Even in my personal life, someone's like, oh, I've got you a surprise. I'm like, oh dear. Please tell me what it is now. I really like an accountant who provides me with certainty.

Ben Lynch: Yes. Well, typically, they're quite good at that, aren't they? They do. They're all about the specifics and the details. What was it that prompted you to explore a different accountant? Because this is going to resonate with a lot of people. And to that point of maybe they don't know what they're actually missing out on, what led you to doing that? Was it an unexpected text bill? Did someone reveal something?

Bec Clare: unexpected tax bill that came as a result off of JobKeeper, where we were like, okay, we've had this really positive year because we were supported. We didn't think it was going to be, but we were then really well supported. And then this just enormous tax bill that just hit us broadside. And almost sucked the wind out of our sails that we'd actually really tried to go deep on our business and get through this, only to get to the other side where there was There wasn't the cash flow to support that tax bill. And what I'd learned from our relationship with our accountant is just because you can read a profit and loss and you see profit down the bottom, working with someone who can actually explain where that money is, because it's often not in your bank account.

Ben Lynch: Well, that's the common question, right? Isn't it?

Bec Clare: Where's all this money that's meant to be on the bottom right? I don't know. And having someone that can help you understand where it is and also get more of that to be actually where it should be in your bank account was just so refreshing.

Ben Lynch: Is it fair to say, Jobe, then that you should never have an unexpected tax bill?

Jack O'Brien: Look, yes, that is a reasonable assumption on the proviso that you've been communicating and talking with your accountant. If it's been 11 and a half months since you last spoke to your accountant and you've been doing all sorts of weird and wonderful things with your cash and your business and your home and blending things, Accountants aren't mine readers and so if you have a healthy relationship with your accountant, there shouldn't be an unexpected tax bill. But if you haven't proactively nurtured that relationship and I'll say, yes, we want a proactive accountant but let me flip the tables. The accountability is back on you to be a proactive clinic owner and be leaning into that relationship as well. I think it's unfair to entirely blame accountants for unexpected tax bills.

Ben Lynch: Nah, they're not here to defend themselves, so we'll just go hard. You bring up a really good point and that is rhythms. And I think we've spoken at different times about the rhythms, financial rhythms you need to have as a clinic owner, to your point, like take accountability, take responsibility. This is your business, quite literally, to understand the numbers. One of those important rhythms is the proactive, scheduled, regular connection with your accountant, whether that's in person or via Zoom. My accountant is locally based, but we never meet in person. Zoom is a brilliant way to do it. I think a lot of people get caught up that they need to be in person. Maybe that's true for your style, but I'd also suggest that you could have an accountant somewhere else in your city, state, or country. You just want the best advice. quarterly seems like a good rhythm for maybe a 60 or 90-minute deep dive with your account to understand, okay, what's happened over the last 90 days? Help me get up to speed and let me factor that into some of the tax planning for you. I think that's kind of the key part is. tax planning should help you understand what are the liabilities that you have or that you're starting to build up and have you got the cash set aside or what's our plan to cover those liabilities. Joby, just speak to the rhythm side of things. What's important about the rhythm and what is the kind of nature of those connection points and what do you actually do?

Jack O'Brien: Yeah, with your accountant, you want to be thinking about at least quarterly is a great time. Ultimately, that's only four times a year and really we need to be speaking with our accountant far more than four times a year. At those sessions, we want to be reflecting on what has happened and then we want to be thinking about the short-term future and the longer-term future. That's a really healthy lens to look at it through, what's happened, what's happening and what's going to happen. The reason that matters is because if something's happened in the most recent two, three, four that requires us to change or pivot or adapt, then we need to be aware of that quickly. We don't want to let that get away from us. And our accountant needs to know what we envisage happening, and often this comes back to a 90-day plan as a clinic owner or your personal desire statement, so they're all intertwined. But our accountants need to know what we see happening in the next 90 days and the next two to three years. That way they can tailor their advice to ensure that we're going about things in the most optimized way.

Ben Lynch: One of the common ones that often comes up to that desire statement or where are we heading in the future is around, there's a number of points, but one is around how you pay yourself as an owner, especially for early stage businesses or small businesses, growing businesses. It can be quite varied in how that happens mechanically. And then maybe as you mature, you get more of a, I don't know, standardized way of maybe you're paying yourself a wage and super and then taking drawings of distributions periodically. How do you advise clinic owners when it comes to paying themselves or talking to their account about paying themselves? Because I think maybe this extends beyond just that point, Jack. But a lot of accountants, I find, will give you advice for where you are right now in a way, or they kind of like, oh, this is like the cheap or the easy way to do things. And they're not particularly future pacing, oh, this is where you want to be in six months or 12 months. And so we might run with a slightly different structure. So maybe just specifically on the pay yourself side, Jack, and then how that links into what you tell and share with your accountant.

Jack O'Brien: It's a really important point because we have to start somewhere and then add in all the layers of context to then be able to make a decision off the back of that. And so in the context of paying yourself, you might say to your accountant, well, I want to have my books reflect reality as accurately as possible. I want to be paid a salary for the work I do and I want profits to be paid for the business that I operate. And that's how we would often advise clinics to think about these things. It's pay yourself for the work you do. Make sure you pay people market rates according to the work they do and profit comes later. And so we take that to the accountant and the accountant might say, I understand where you're coming from, but let's do it a different way for tax purposes or family structure purposes. And that's okay. There might be a variation that you put in place, but we've got to start with that context in mind. And so often in that case, Ben, the accountant is thinking about the next tax bill that might be coming in the next six to nine months. However, back to that point of desire statement, if you were to share with your accountant that I'm thinking about exiting my clinic in two, three years' time or I'm thinking about creating a pathway for a team member to buy in, well, that has to change the decision materially. because you need to have clean and representative books in order to be able to get your clinic valued and make sure that you optimize the value for that buying purchase. Conversely, if your personal desire statement is to buy two investment properties a year for the next three years, well, you might need to create an arrangement for your PAYG salaried income to be reflective of being able to service those properties. So that's where the next 90 days and the bigger desire statement picture is critical because it materially changes the accountant advice, your tax personally, your super, the cash flow that falls into your pocket and often the cash flow of the business. Bec, you're nodding your head a lot resonating with you.

Bec Clare: We've been through this where, you know, we were quite sort of narrow-minded in the way that we wanted to make sure that we're paying what was fair and reasonable in tax, but no more, and then went with a certain structure that then didn't serve the long-term goals for our clinic. which then meant a restructure, which is then time-intensive. It can be financially a little bit tricky if you're talking then things like capital gains. It was just all really quite messy. What the lesson was for us was to find an accountant who could explain in layman's terms the different types of structures and how they would help serve that longer term vision, what it meant for us now if we structured like that, and how we'd still be able to meet some of those tax objectives while still having some of those other objectives working for us in the pipeline. Because these things like exits, team members joining you and buying in, they don't happen typically overnight. So, we wanted to create the longest and most sustainable runway to have those things unlocked for us in the future, but had at some point really not taken the steps that we needed to there. And it came back to just a lack of understanding of what all these different things meant. What is a trust? How does the family, bucket company, all these words that were completely foreign to me, But it came back to, okay, I need to find someone who can really explain this in really simple terms. And it came down to a lot of drawings. And that's how I was able to understand what it is we needed.

Jack O'Brien: Yeah, we want accountants to speak our language. And I'll say this too, it's important that our whole team can work together. So for example, personally, I like to make sure my accountant and my mortgage broker have a really close relationship. And often, I'll say, you two go have a meeting, leave me out of it. Because the accountant, generally, their primary MO, modus operandi, is to minimize our tax. And so, they want to create structures where we pay as little tax as possible. The broker is looking at ways that we can maximize our investments and sometimes that looks like paying a little bit more tax in the short term to be able to maximize our investments. Essentially, they're competing priorities and so we've just got to weigh those up and make informed decisions taking in all of the various perspectives. So, for instance, personally, that was a case that came up for us recently is willing to pay more tax in the short term so that we can invest for the long term, but by the same token, ensuring we manage our land tax obligations from an investment And so, it's like, okay, we pay a little bit more in income tax to pay a little bit less in land tax but it still enables us to invest and it becomes very complex. This is why we invest in accountants and brokers and good advice.

Ben Lynch: I want to get to that point, Jad, because we regularly get asked. how much should I be paying my accountant? And there's always nuance here, so I want to get to it. But over the weekend, I was literally on Reddit and there was a thread there of discussion of how much should I pay myself as a physio and as a clinic owner and someone You're very confidently in the thread is like, pay yourself as little as possible. It's all about saving taxes and building assets. And I jumped in on the thread. I'm like, that's very interesting take on things. And of course, it's always nuanced by your individual goals and what you're trying to achieve. But it's a great point that you made, Jack, is that the accountants Traditional and primary lens is looking at how do we reduce tax. And at times, it's actually worth paying more because of your individual goals and circumstances. How much should I pay my accountant? This is a question we regularly get. Jack, how do you answer that?

Jack O'Brien: Well, we can't say it depends, right? Because that's a swear word around here.

Ben Lynch: You can, but add some layers here because it's an interesting question.

Jack O'Brien: So here's the layer that I encourage clinic owners to think about. When we think about how do we maximize the spend of our clinic, we think about a category on our profit and loss that is support services. And in that bucket looks like accountants, lawyers, coaches, HR advice, and the list goes on. That category of expenses classically is going to be circa 5% of your revenue. If you're a million dollar a year revenue clinic, that looks like $50,000 per year. Now, there'll be times and seasons where that is weighted more heavily to accounting and financial planning. And there'll be times where that can be quite lean and we might orient ourselves towards investing in coaching and business development and growth. There'll be times where there's an unexpected legal bill. And if you're a smaller or startup clinic, that can look oftentimes more than 5% because some of these expenses and investments are fixed. For instance, working with Clinic Mastery is a fixed investment. So when you're doing $600,000 a year, it might look like 4%. But when you're doing $1.2 million a year, it only looks like 2%. It's a chump change. And so it scales over time. To answer your question, you should think about your accounting investment in the context of circa 4% to 7% of your overall revenue. And often, the more complexity, the more accounting time and therefore investment required. So, you know, if you're getting your accountant to do your bookkeeping, then that'll skew some of these numbers that I'm referencing. If you're heavily leaning on your accountant as a large complex clinic and your personal finances and you've got three adult children that are all under your roof that are all coming on it, then you're taking some liberties and it might skew it a little bit higher. Conversely, if you take care of a lot of your personal financial things outside of the business, that spend might only be 1% or 2% or 3%, so somewhere in that 3% to 7% bracket.

Ben Lynch: It's a great reference point, Joby, and I think What I've loved with my accountant is getting clarity on different scenarios in the proactive tax planning. It's like, we could do A, we could do B, we could do C, and here's the literal financial difference between those options, and there's pros and cons for each. And we will screen share on Zoom a spreadsheet that is tailored to our personal family and business situation so that we can see to your point, Beck, I agree. I need to see it. Like these accounts will rattle off things that just comes naturally to them. And maybe in a clinical sense, we can all understand because we talk about this with patients talking in jargon and, you know, talking past them. So being able to see it has been a great thing for me, whether that's the visual of how entities work together or literally the numbers and the scenarios that we're planning and here's why it relates to what you invest. If you can see the difference between the scenarios, you know, if we broadly maybe do nothing or stay as we are. And then the scenario B shows you a $10,000, $100,000 difference. Well, all of a sudden, the accounting bill is insignificant because they've been able to find a creative way, to your point, Jack, of saving tax or allowing us actually, maybe we're paying more tax, to achieve some of the wealth creation goals that we've got. So, in my mind, After having that experience, it should be super obvious in a way for you to assess the return on investment from your accountant if they're putting scenarios like this to you and then weighing it up against what you spend.

Jack O'Brien: Right. So a quick example of what one of these scenarios could look like. Working with a clinic owner and advising them how to speak with their account and they wanted to do some investing as we described. It's like, okay, well, if we do nothing, you'll be able to buy a simple investment, one simple middle of the range investment property. If you are able to pay yourself a little bit more PAYG, let's say an extra 50 grand, you might have to pay 17, 18 grand in tax. But that additional $50,000 or $17,000 in tax means you can now buy two investment properties that will grow at X% capital growth and neutrally geared, et cetera, over time. And so, yeah, you're going to donate $17,000 to Albo and his cronies, but it means that your capital growth might look like $15,000 a year over the next three years. you know, you choose. Do you want to save that $17,000 now or do you want to make $50,000?

Bec Clare: I'm making up the numbers, but the point is you can do scenario A or scenario B. Bec, you also- What I loved about the process was how empowering it was and feeling like I could take charge of those decisions and I was making informed decisions about what the future looked like for our family and that I wasn't just subject to the tax bill landing at the end of the year and being stunned by what it was or what it wasn't. and having the money in the bank ready, saved. This year, both tax bills arrived. Obviously, we've prepaid some of it. It arrived and I went, tick, that money's in the bank. I went into this financial year going, I do not want to ever be surprised by another tax bill again. I want to have that arrive and go, you know what? This does not impact our family at all. It is what I It's a good thing to be paying tax. It means you've made some money. And I wanted to use that lens, but to have it sitting there where it's like, ah, that thing. Okay, great. I can then spend my energy on other things that are going to help drive us forward in the next 12 months and beyond. But the process was just so stark and so different and so incredibly empowering. I never thought that I'd get to a position like that financially ever.

Ben Lynch: Yeah.

Bec Clare: Like I didn't come from a family that talked about money.

Ben Lynch: Bec, when you've got someone who can explain things really well to you in lay person's terms, or at least I keep coming back to the visualization or seeing it. So often I've had the accountant experience where they're talking about, well, we could do this and we could do that. And you're not actually saying, what are the financial implications of those things? They're just kind of talking about options, you know, vaguely. Being able to see, oh, that's a $10,000 decision, just changing that. Okay. That gives me food for thought. There is a book, actually. It gets published every year. It's certainly in Australia. I don't know if they have this around the world. I've got it here. Drian Raftery. Butchered that. Anyway, 101 Ways. Rafterty? Okay. Anyway. 101 ways to save money on your tax legally. This is not the Cayman Islands version where you do something really creative. But essentially, it breaks down the Australian Tax Office website into bite-sized pieces with really practical advice. So, if you want to actually understand a little bit more about some of the options, again, to your point, Bec, proactively, a terrific resource. I think they put out a new version every financial year. You can see this one's a little bit of an older version on my desk.

Bec Clare: Jack, I remember the first year you said to me, you should read this. I was like, I'm not reading that. That sounds terrible. That sounds super dry. I'm not reading it.

Ben Lynch: It is.

Bec Clare: And then I did. I did actually read it. And then I bought copies for all of Grant's adult children. And now they all read it every year. Well done. So it's just so helpful to understand it. And it's in bite-sized chunks. It's not as dry as the title sort of alludes to, but it's really helpful in just breaking it down, demystifying what is text and how it all works.

Jack O'Brien: And some of these concepts are quite foreign to us as clinic owners, rightly so. You've got better fish to fry than thinking about the tax code. But these things update and change quite frequently. For instance, the small business instant asset write-off is changing by June 30. And so, if you haven't had a proactive conversation with your accountant about investing in assets between $2,000 and $20,000, then you need to be doing that yesterday. because you need to be not only purchasing these things but receiving delivery of them before June 30 in order to technically qualify for the instant asset write-off. If you leave that until July, then you might spend 15, 20 grand on an asset that you then have to depreciate over the next three to five years. You're making a donation to the ATO and I would not suggest that that is a great place to make donations to.

Ben Lynch: There's a couple of other things that we've talked about previously that you need to have almost as prerequisites to having productive meetings with your accountant. I want to cover those again, but if you're listening in and going, yeah, look, I really do need a second opinion on my accountant, or I'd like to speak to someone else, just message through jackatclinkmastery.com and we can connect you with an accountant with no obligation just to Check things out. Our default is always to go back to your current accountant and ask some of these questions. And if you're dissatisfied with how they're showing up or responding to those, then it's time to move on. But always go back to your accountant. So JackatClinicMastery.com if you're looking for a change or a second opinion in your accountancy. A couple of things that come to mind. We've talked about these before, but one is bank bank accounts and the allocation of dollars back to your point just before about Jack says every dollar has a purpose and being able to see the tax reserves and quarantine those things. And then secondly is your bookkeeping and having up-to-date books, reconciled books, so that when you do go for the meeting with your accountant, you haven't got 1,200 unreconciled things that are six months old and we're not looking at really up-to-date figures. Let's go with the bank account allocation side of things first. Bec, just talk us through your own experience, perhaps some of the things you find yourself regularly advising clinic owners to do so that they don't have the unexpected tax bill, but also that they have the funds to pay the tax bill as well.

Bec Clare: Really, it comes down to what are those really large expenses that are likely to catch you by surprise. So, tax. I mean, super is going to be moving to payday super shortly, but prior to this, it'd be allocating what is the super that needs to be allocated so you're not looking for it, you're looking at it at the time. Any annual leave and having a leave buffer there, particularly for someone who might be heading towards something like long service leave. who might be needing to take an extended period of time off. So it's really probably those three main ones that I'd be looking to ensure that we've got the security and the comfort and the breath. that we can take knowing that it's sitting there and we're looking at it, even if it's a portion of what actually has to be paid for that bulk amount not to come out of your operating overdraft. So some people say, oh, but I don't quite have enough to put all of that PAYG over into a bank account ready for tax. Put some of it. might be 25% of what the bill is due, but otherwise it would have gone into your main operating account and you look at that account almost as a falsehood of, I've got more money than I actually should have because this liability is coming, but come the end of tax time, we're like, oh, how about those new computers or oh, how about that Officeworks purchase? Do you actually have the money to spend? And that's one of the questions by allocating it out into these bank accounts. It's more that empowerment piece that I know that when the bill arrives, I've at least got part of it.

Ben Lynch: It's a great point to try and make it as fool proof as possible. And I always come back to JOB. Every dollar has a purpose and, you know, allocate it. I just don't want to commingle the funds and be confused and that got me into trouble a decade or so ago and it's like, learn the lesson and set things up so that it works into the future. some of the up-to-date books and reconciling things, maybe clinic owners are doing their own bookkeeping or their aunt, their uncle, their mum or dad are maybe helping them out and doing things or perhaps it's just they haven't set the standard and so their books are never up-to-date. How do you advise people to make sure that they're able to review the most up-to-date numbers in their business and make sound decisions?

Jack O'Brien: You want to make sure you're utilizing the tech that's available. Xero itself, or there's a couple of other bookkeeping softwares, but they're distant down the list, but Xero and others often have wonderful features inside themselves already. There's other bolt-ons that make it really easy to forward emails with invoices straight into your Xero account or to make things auto-reconciled. Are you referring to Dext as an example? Yeah, there's a number. Dext is one. DocHub is another. So, there's plenty of these. So, the onus of responsibility is on you as a clinic owner to make sure that you're doing things in a current way. You don't have to just do it the way we've always done it. So, we want to be making sure we're efficient with the way those things are done. We want to make sure we have clear standards for our team or whoever's doing the zero reconciling to understand what are the targets that we're aiming for. And specifically, that might be that, you know, reconciling is no more than four days overdue. And so we're always current within four days or whatever that number is. Maybe you're tracking outstanding accounts and we want to make sure our outstanding accounts is within X dollars or less and staying on top of those things. And then finally, we want to make sure our zero account is set up in a way that makes sense for us to make business decisions. Because you can set up your Xero account to make sense for the accountant or the tax office or valuation purposes or you know, we can set things up differently. You as a clinic owner want to have things set up in a way that helps you make good decisions. The way we help our members do this is structure your P&L in a functional categorized layout, not just alphabetical, but we make sure it's set up and some things are below the line and above the line and operational, non-operational. You can set up formulas, all these, you know, whiz-bang features. That's what our coaching does and helps you do. As a clinic owner, you need to have clean data, current data, so that you can make informed decisions quickly.

Ben Lynch: point, I think also once you've got that set up, if you feel like you're pretty dialled in, then you can move to maybe step two broadly, which is starting to budget effectively because you've got things that are up to date, segmented, categorized, and now we can actually get into the future because so much of this conversation is like, okay, Most of us have had this experience where we've been very reactive and there's been the unexpected tax bill and it's normally a catalyst to go, not this, never again, I've had enough. And so we change accountant or we change some of our habits and routines. Some of the rhythms change as well, and we get things up to speed, reconciled. We're looking at accurate data. We've categorized it nicely. Then the question is, well, can we start to plan for profitability? Absolutely you can, and that's where the real mastery element comes in once you've got that really solid foundation. We've spoken previously about setting budgets, forecasting, making informed projections, and there's some incredible resources for the members listening in, in the learning portal, just type in the word budget, and there's a number of great resources. But JB, for those that are a little more advanced in their journey here, what are some of the things that they can be doing to connect it back to the accountant here? When it comes to looking into the future, how do you see an accountant really helping you into the future? We've talked about tax planning to a degree as a future-orientated thing, but what else can an accountant do when it comes to planning for profitability?

Jack O'Brien: Yeah. Accountants can begin with the end in mind, right? And so, if we can help them understand the end state, the end picture, then they're not just creative at minimizing tax but managing cash flow is another key thing. So, they've often got ratios that they can look at and how are invoices coming in, how are they being paid, how are we collecting cash, how are we reconciling that. So, accountants can be really productive when it comes to tax planning, when it comes to cash flow management. And then thirdly, when it comes to structuring and organizing what entities get which cash or what time in a way that's productive but within the law. Because there are some creative ways that you can funnel off cash to save interest over here or there. But if Mr. ATO or Mrs. ATO, as it were, finds out, then Yeah, you're in trouble. So your accountant can help make sure that you are structurally sound, make sure you're making good cash flow decisions, and minimize as much tax as possible.

Ben Lynch: And so, JB, when you say start with the end in mind, you've referenced it a little bit before as I understand it, and this is where we can work hand in hand with your accountant as well as business coaches and advisors. If I cut to the chase, it's like, how much do you want to earn in the next year? And then your accountant can help you slice and dice how that gets paid to you, how that comes out of your business. But actually saying, you know what, I am working my butt off. I have taken a lot of risk. But for whatever reason, maybe I'm not getting the financial fruits that I want, desire, need, wherever you're at at that spectrum. And next year, this is what I'd like to take. I'm not exactly sure how that works, but I want to keep my accountant and my business advisor in the loop. And we work together to figure out how to do that in perhaps the most reliable, predictable way.

Jack O'Brien: Exactly right. And just for a minute, let me speak to the larger, more substantial, sophisticated clinics. If you're doing $2, $2.5, $3 million a year or more, you are in a different game. And so, you need to start thinking about a CFO or a fractional CFO. We work with a particular partner who we can introduce you to, but your needs are more complex from a business operational perspective. So you need an accountant who is skilled in that space and usually a CFO. They go hand in hand. You also need to be thinking about how you personally manage your wealth. At that level of clinic, you're not just an average PAYG earner. You need to be having healthy family trust structures and investment vehicle structures in place. So you need a really good broker who can help you access creative finance solutions and you need really sound financial planning and advice. And so, if you're in that bracket, $2.5 million or more per year, CFO, broker, financial planning and advice, send me an email, jackatcleanitmastery.com. We'll connect you with our trusted experts who understand the health space and can help you ultimately maximize the wealth, freedom and impact for your business and for you and your family.

Bec Clare: What I've loved personally about working with our partners in this space has been the connectivity and how seamlessly I can almost step into the circle, however not need to conduct the circle. I sort of let them talk at all of their, with their language and their lingo and work it all out and then come back to me and help me bring the vision to life. Absolute game changers for us, but to have the right people at your table who are happy to work together, absolutely imperative.

Ben Lynch: Beck, to your point, it all sort of boils down for me because how often does a good advisor say, well, there's lots of options, but what are your goals? To your point, if you're really clear on these are the goals, or even if you're unclear, work with your coach. on your goals, being clear so that all the advisors are working towards that. I love your approach and you're one of the best, I reckon, in our team and community of just going, you know what, I'm going to get the advice, the advisors around, I'm going to invest in it and you've just seen your growth trajectory just take off.

Bec Clare: It's an investment. There's no doubt there's an investment that comes with this. However, I also figure that where's my genius zone and where should I be spending my time? That's going to ultimately help us grow and I will leave the really technical stuff to the people who are, that's their genius zone.

Ben Lynch: It's a great point and it sort of speaks to those clinic owners that we do see struggle with a number of things. We'll look at and ask those types of questions of what does it cost for the bookkeeping and the account. Now, you obviously need to know that before you engage the services. They look at it as just purely a cost. they don't see are actually getting good advice will pay for itself in spades over time. And so for those that are struggling or feel like they've been in kind of the same loop or merry-go-round for a period of time financially, it's like level up your advice. And if you're looking for someone that we have vetted, jack@clinicmastery.com, send an email. All right. Well, Beck, Jack, thank you so much for your contributions. You can head along to clinkmastery.com forward slash podcast for this episode and more. All the show notes, all the recommendations and the partners soon to be easily accessible and listed on the website for you to reach out to. We'll catch you on another episode very soon. Bye for now. Bye-bye. Bye-bye.