What financial checks do I need to do before hiring another doctor or staff member?
- Jan 28
- 2 min read
Updated: Jan 29
Many medical practices hire because the clinic feels busy or patients are waiting longer for appointments. While the intention is good, hiring without proper financial planning can lead to higher stress, tighter cash flow and unexpected compliance issues.
Doing the right financial checks helps you:
Hire with confidence rather than urgency
Protect cash flow and profitability
Plan sustainable growth instead of short term fixes
Avoid payroll and tax surprises
A common misconception is that adding another doctor or staff member will automatically increase profit. In reality, timing and structure, matter just as much as demand.
1. Review current profitability
Before hiring, your practice should already be consistently profitable.
What to review:
Monthly profit trends, not just one strong month
Profit margins after all expenses
Whether current services are priced appropriately
Best practices:
Ensure your practice is profitable before adding fixed costs
Identify any cost leaks that could become worse with a larger team
Do’s and don’ts:
Do base hiring decisions on data
Don’t rely solely on gut feel or business
2. Assess cash flow and timing
Even if your practice is profitable, poor cash flow timing can make hiring risky.
What to check:
Ability to cover wages during slower months
Impact of delayed Medicare or private payments
Upcoming tax and superannuation obligations
Keep in mind:
Wages are a fixed cost and must be paid regardless of patient volume
Many practices struggle not because of profit, but because of timing
3. Understand the cost of hiring
The cost of a new hire goes beyond salary or contractor fees.
Include in your calculations:
Superannuation and payroll tax where applicable
Recruitment and onboarding costs
Additional admin, software and support expenses
Best practices:
Model best case and conservative scenarios
Allow a buffer for the first few months
4. Check capacity and efficiency first
Sometimes the issue isn’t headcount, but systems.
What to review:
Appointment utilisation and no show rates
Admin processes and billing efficiency
Whether existing staff are operating at capacity
Do’s and don’ts:
Do optimise systems before increasing payroll
Don’t assume more people will fix inefficiencies
5. Plan the structure carefully
How you engage a doctor or staff member effects tax, compliance and long term risk.
Key considerations:
Employee versus contractor arrangements
Payroll tax and superannuation implications
Compliance with agreements and industry rules
Keep in mind:
Getting the structure wrong can be far more costly than delaying a hire
Professional advice upfront reduces risk and rework later
Are you unsure whether hiring another doctor or staff member is the right decision? Let Rise Accountants help you review your business and whether this is the right decision for your medical practice.
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