Accountant for Clinics, Pharmacies and Healthcare Services

A clinic or pharmacy does not just need invoice recording. It needs an outsourced accountant who understands healthcare sector regulations, special tax treatment and specific licensing requirements.

Accounting for healthcare services includes:

• •Recording every transaction — medical services, medicine sales, laboratory analyses, dental treatments, all documented through the fiscalization system.
• •Pharmaceutical stock management — tracking medicines and medical supplies, monitoring expiry dates and traceability.
• •VAT management — healthcare services have specific treatment, with certain exemptions and reduced rates.
• •Monthly and annual tax declarations — profit tax, VAT, employee contributions.
• •Payroll and contributions — managing doctors, nurses, pharmacists and support staff, with accurate calculation of social contributions.
• •Annual balance sheet and financial statements — closing the fiscal year with pharmaceutical inventory count and in accordance with accounting standards.

An accountant experienced in healthcare becomes your financial partner. If you are opening a clinic or pharmacy, start with LLC formation and obtaining the required licences.

VAT in the healthcare sector has specific rules that distinguish it from other sectors:

Exempt healthcare services: Medical and dental services are generally exempt from VAT. This means the clinic does not charge VAT on consultations, treatments and procedures — but it also has no right to deduct VAT paid on purchases.

Implications of the exemption: Exemption from VAT does not mean "no VAT". It means the clinic pays VAT on purchases (medicines, equipment, rent, services) but cannot deduct it. This increases operating costs.

Medicines — reduced VAT: Medicine sales in pharmacies are subject to VAT rates according to legislation — some medicines are exempt, some have a reduced rate. The accountant must know the classification for each category.

Medical equipment: Purchasing medical equipment (diagnostic devices, dental equipment, laboratory equipment) is subject to 20% VAT in most cases. For exempt clinics, this VAT is non-deductible.

Aesthetic and cosmetic services: Aesthetic or cosmetic services (non-medical) are treated differently — they are often not exempt and carry 20% VAT.

Electronic invoicing: Every medical service and medicine sale is invoiced electronically. Fiscal receipts are issued to individual patients, tax invoices for contracts with institutions.

Common mistakes: - Charging VAT on exempt services. - Deducting VAT when the business is exempt. - Treating medical and aesthetic services the same way. - Late submission of the monthly VAT declaration.

Pharmaceutical inventory requires special accounting attention due to strict regulations:

Traceability: Every medicine and medical supply must be tracked from the supplier to the patient or consumption. This includes batch number, expiry date and supplier.

Expiry date monitoring: Expired medicines cannot be sold. The accountant records write-offs of expired medicines as inventory losses, with the appropriate documentation.

Valuation methods: Pharmaceutical inventory is typically valued using the FIFO method — medicines purchased first are sold first. This ensures proper rotation and minimises losses from expiry.

Purchases from distributors: Pharmacies and clinics purchase from licensed distributors. Every purchase is accompanied by a fiscalized invoice and delivery note.

Medicine margins: Prices of many medicines are regulated. The accountant calculates the actual margin after distributor discounts and operating costs.

Periodic inventory count: At a minimum, physical inventory is conducted annually before balance sheet closing. Larger pharmacies conduct quarterly counts.

Consumable materials: Gloves, syringes, gauze, disinfectants — materials consumed during treatments are recorded as operating expenses when used.

Good inventory management ensures accurate tax declarations and protection during inspections by health authorities or the tax administration.

The annual balance sheet for healthcare entities has specific elements:

Pharmaceutical inventory: Physical inventory of medicines and medical supplies is conducted before closing. Expired medicines are written off, differences are documented.

Medical equipment: Expensive equipment is depreciated according to its useful life. The accountant calculates annual depreciation and verifies the physical condition of equipment.

Accounts receivable: Delayed payments from the health fund or private insurance are recorded as accounts receivable. Aged receivables are assessed for collectability.

Financial statements include: - Balance sheet — assets (medical equipment, pharmaceutical inventory, receivables), liabilities (suppliers, loans, tax obligations) and equity. - Income statement — medical services, medicine sales, cost of medicines, gross margin, operating expenses, profit/loss. - Cash flow statement. - Explanatory notes for depreciated assets.

Deadline: The annual balance sheet is submitted to the National Business Centre by 31 March. The profit tax declaration is submitted to the tax authorities by the same deadline.

The accountant prepares all documents — just as for trade businesses or professional services.

Based on our experience with clinics, pharmacies and medical practices in Tirana, Durres, Vlora and throughout Albania, these are the most frequent mistakes:

1. Incorrect VAT treatment The clinic charges VAT on exempt services, or deducts purchase VAT when it has no right to. This mistake significantly affects the VAT declaration.

2. Uncontrolled pharmaceutical inventory Expired medicines are not written off, accounting stock does not match actual stock, documentation for losses is missing.

3. Late recording Invoices are not recorded on time, leading to inaccuracies in tax declarations.

4. Incorrect classification of doctor status Collaborating doctors are treated as employees without an employment contract, or conversely — employees are treated as freelancers. This leads to problems with the labour inspectorate.

5. Unmaintained licences Failure to renew the licence or pay annual fees leads to suspension of operations.

6. Unregistered employees Late or missing registration of staff, particularly interns or volunteer staff.

7. Incorrect equipment depreciation Expensive medical equipment is recorded as a period expense instead of as fixed assets with depreciation.

An accountant experienced in healthcare prevents these mistakes. If you are opening a clinic, make sure your LLC and licences are in order.

Based on our work with healthcare entities, the most requested services are:

• •Full monthly bookkeeping — transaction recording, pharmaceutical inventory, reconciliations, reporting.
• •Monthly tax declarations — VAT, profit tax, contributions.
• •Payroll and employee registration — salaries for doctors, nurses, pharmacists, support staff.
• •Annual balance sheet closing — pharmaceutical inventory count, financial statements, annual declarations.
• •Tax advisory — tax optimisation within the healthcare legal framework.
• •Fiscalization — fiscal receipts, electronic invoicing, software integration.
• •Clinic/pharmacy formation — business registration, NIPT, healthcare licences.
• •Inventory management — medicines, medical supplies, expiry dates, write-offs.

Every clinic has specific needs. We offer similar services for independent professionals, trade businesses and restaurants. The initial consultation is free.