Exempt revenue means no ITCs, so the books carry the control
Nearly everything an MPC earns is an exempt supply: OHIP fee-for-service, alternative funding plan payments, hospital clinical work. You charge no HST on any of it, and you recover none of the 13% you pay out on rent, EMR licences, billing agents, medical supplies or professional fees. For most businesses the quarterly HST return forces a reconciliation whether they like it or not; a medical practice has no such external check, which is exactly why physician books drift for years without anyone noticing.
Our End-to-End Accounting engagement replaces that missing discipline. Bookkeeping, payroll for your clinic staff, financial reporting and the corporate filing run together on a monthly close, so year-end becomes an output of the system rather than a reconstruction project every spring.
Reconcile the remittance advice, not the bank deposit
OHIP pays on a monthly cycle: claims submitted through MC EDT by the cut-off around the 18th are generally funded in the following month's payment run. The deposit is one number. The remittance advice behind it lists every claim paid, reduced or rejected against the fee codes in the OHIP Schedule of Benefits, each with an explanatory code. A practice that books the deposit and moves on never finds out what it quietly wrote off.
The deadline makes this urgent rather than merely tidy. Claims must reach the Ministry within six months of the date of service, and stale-dated claims are gone for good. Every month we tie the remittance advice to the billing records and to the bank, flag the reduction codes worth correcting, and keep a live list of what remains unpaid while there is still time to resubmit.
Year-end needs the same rigour. Work performed in the final weeks of the fiscal year is usually paid after it closes, and a corporation reports on an accrual basis, so we pick up the OHIP receivable and land the income in the correct year. The Corporate Tax Filing then simply follows books that are already right.
The taxable edges most practices forget they have
Not everything a physician supplies counts as health care under the GST/HST rules. Work done mainly for a third party's purposes rather than the patient's care is taxable: insurer and legal reports, independent medical examinations, employer forms, purely cosmetic procedures. Only these taxable supplies count toward the $30,000 small-supplier threshold, measured over four rolling calendar quarters. Most practices never cross it. A practice with a busy medico-legal sideline can, and discovering that during a CRA review is the expensive way.
| What the practice bills or buys | HST treatment |
|---|---|
| OHIP fee-for-service and AFP payments | Exempt: no HST charged, no input tax credits on related costs |
| Insurer, legal and employer reports; IMEs | Taxable at 13%; counts toward the $30,000 threshold |
| Cosmetic procedures with no medical purpose | Taxable at 13%; counts toward the threshold |
| Rent, EMR, equipment and other overhead | 13% paid is a true cost: no recovery, so it is expensed or capitalized gross |
We map each revenue stream once, code it in QuickBooks Online with the right tax treatment, and watch the taxable running total so a registration obligation never arrives as a surprise letter.
What the monthly file includes
A medical practice ledger is simpler than a retailer's, which is why it should be immaculate. Ours runs on a small, boring stack:
- Dext captures receipts and supplier bills the day they arrive; nothing lives in an inbox or a shoebox.
- Payroll for reception and clinical staff, with source deductions remitted on time, including your own salary where the compensation plan calls for one.
- Shareholder account hygiene: personal amounts paid by the MPC are tracked and cleared deliberately, so year-end brings no surprise income inclusion.
- Monthly statements that show overhead as a percentage of billings and receivables still sitting with OHIP, not just a list of expenses.
Because there are no ITCs, the 13% on a new exam table or ECG becomes part of its capital cost and depreciates with it in Class 8; computers sit in Class 50. Getting that allocation right every time is quiet money at T2 time.
We work from Mississauga with physicians across the GTA, in clinic or fully remote. Every engagement is quoted in writing after a free 15-minute discovery call, so there are no hourly surprises.
Source: CRA — GST/HST for businesses.
