Managing excess cash in your practice

Here are some solutions for managing excess cash and putting it to work for you and your practice.

  4.5 minutes


If you’re a medical professional and have worked hard to grow your business, there may come a time when you have excess cash. For many business owners it’s an enviable position to be in, but it can cause a small headache for others. What should you do with it? There are a number of factors to consider, including the level of risk, reward and liquidity you’re searching for.

Once you’ve worked out how much cash you need to keep on hand to cover costs, consulting your bank or financial adviser will help you decide what works best for you. But in the meantime, here are five strategies for dealing with excess cash.

Invest in assets

Sinking your surplus cash into shares, stocks or property is a good way to grow the money you’ve accumulated. You can invest in the share market yourself, or through managed or passive funds. This path does carry an element of risk, though, so the best strategy will depend on your goals and the level of risk you’re comfortable taking on. You shouldn’t do anything without consulting your financial adviser.

Savings accounts and term deposits

Directing your money to a savings account is a low-risk option which allows your money to be readily accessible. BOQ Specialist’s Head of Deposits Chris Reid says this means your money isn’t “locked away”, and allows for flexibility and liquidity.

Some banks may offer other services to add value to your deposit, too. BOQ Specialist, for instance, is the only bank in Australia that offers a transaction account that pays Qantas Frequent Flyer points.

“Customers may find greater value in earning points which they can use for travel and other things rather than earning interest,” Chris says.

If you know you won’t need your money for a while, consider putting it in a term deposit. Term deposits typically have better interest rates than standard savings accounts, which will help you maximise your return.

Invest in your business

Reinvesting surplus cash into your business will help it grow. There are a number of ways you can do this, including investing in better systems, new equipment or research. Maybe you want to expand by buying another company. Whatever the case, reinvesting in your business can help it become more innovative and better prepared for the future. There may also be tax advantages for you, so speak to your accountant about this option.

Pay down debt

While it’s not the most exciting option, getting debt off your books is a good idea. Not only will it take a burden off your shoulders, but it will mean you’ll save money on interest payments.

Spend it

Paying a dividend to yourself is another way of moving surplus cash out of the business. If you want to boost staff morale, you could also think of giving employees a bonus. Various tax deductions are available should you go down this path, but it's important to be aware of the tax implications before you make your decision.


Looking for a dependable yield from your income or savings? Click on the link to learn about our fixed term deposits. Ready to take the next step? Contact us to find out how we can tailor a finance solution for you, or call us on 1300 131 141.

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