How does stock purchasing affect cash flow timing?

Frame ranges are typically purchased in advance of sale, meaning cash goes out well before it comes back in from retail sales. Practices that don't plan for this can find themselves cash-poor despite healthy underlying sales.

Should optometry equipment be purchased outright or financed?

It depends on the practice's cash position and the equipment's expected return. Financing preserves cash flow but adds ongoing repayment obligations; outright purchase (potentially using instant asset write-off provisions) avoids interest but requires more cash upfront. Either way it should be a deliberate decision, not a default.

How can a practice smooth out Medicare and HICAPS payment lag?

Building a cash flow forecast that accounts for the typical lag between service delivery and settlement helps avoid surprises. Reconciling promptly also ensures you're not waiting longer than necessary due to unresolved rejected claims.

Cash Flow Management for Optometry Practices

Q: Why is cash flow management different for optometry practices?

Optometry practices carry retail-style cash flow pressures alongside clinical income — frame and lens stock needs to be purchased ahead of sale, equipment like OCT scanners often involves significant finance commitments, and Medicare and HICAPS settlements lag behind when the service was provided.

Published June 2026By True Tally Bookkeeping6 min read

Retail Pressures on a Clinical Business

Optometry practices carry retail-style cash flow pressures on top of clinical income. Frame and lens stock needs to be purchased ahead of sale. Equipment like OCT scanners often involves significant finance commitments. And Medicare and HICAPS settlements lag behind when the actual service was provided. Each of these pulls on cash flow in a different way.

Stock Purchasing Timing

Frame ranges are typically bought in advance of sale, meaning cash goes out well before it comes back in. A practice can have healthy underlying sales and still feel cash-poor if stock purchasing isn't planned around actual cash availability.

Equipment: Finance or Buy Outright?

This depends on the practice's cash position and the equipment's expected return. Financing preserves cash flow but adds ongoing repayment obligations. Buying outright — potentially using instant asset write-off provisions — avoids interest but requires more cash upfront. Either way, it should be a deliberate decision weighed against the practice's actual cash position, not a default choice.

        Common mistake: stock and equipment purchasing decisions made without reference to an actual cash flow forecast, leading to a cash squeeze that feels sudden but was actually predictable.
      

Smoothing Out Medicare and HICAPS Lag

A cash flow forecast that accounts for the typical lag between providing a service and receiving settlement helps avoid surprises. Prompt, regular reconciliation also matters here — unresolved rejected claims extend the wait longer than necessary.

Building a Practical Forecast

Map out known stock and equipment commitments against expected cash availability.
Build in typical Medicare and HICAPS settlement lag rather than assuming instant payment.
Review monthly so the forecast stays useful rather than becoming a one-off exercise.

True Tally — cash flow clarity for Melbourne optometry practices

We help Melbourne optometry practices plan cash flow around stock, equipment and payment timing. Book a free call to talk through your position.

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