How to Categorise Account Codes
When you connect your accounting software (Xero or iplicit) to Medfin, your chart of accounts is imported automatically. To generate accurate EBITDA and profitability reports, each account code needs to be assigned to the correct reporting category.
You can find the account categorisation settings under Settings → Accounting → Account codes.
Why categorisation matters
Medfin uses your account categories to build an EBITDA waterfall — showing how revenue flows through cost of goods sold, operating costs, and into net profit. If accounts are miscategorised, your EBITDA figures and cost breakdowns will be inaccurate.
Understanding the reporting categories
Your account codes are grouped into five main EBITDA sections:
1. Total Revenue
Revenue — Your main income: private patient fees, NHS income, and clinical revenue.
Other revenue — Sundry income, rental income, or other non-clinical income streams.
2. Cost of Goods Sold (COGS)
These are the direct costs of delivering clinical care:
Dentist pay — Associate dentist pay, performer fees, UDA payments to associates.
Hygienist pay — Hygienist and therapist pay.
Locum & Specialist pay — Locum dentists, specialist referral fees.
Materials — Dental consumables, disposables, and clinical instruments.
Lab costs — Fees paid to dental laboratories.
Staff costs — Clinical support staff wages (nurses, chairside assistants) that are directly tied to clinical delivery.
Other costs — Any other direct cost of sale not covered above.
3. Operating Costs
The overheads of running the practice:
Dental costs — Clinical equipment maintenance, small equipment, other non-material dental supplies.
Marketing costs — Advertising, website, patient acquisition campaigns.
Personnel costs — Non-clinical staff costs: HR, training, recruitment, management salaries.
Premises costs — Rent, rates, utilities, building maintenance, property insurance.
Administrative costs — IT, software subscriptions, accountancy, legal fees, telephones.
Other operating costs — Operating costs that don’t fit the categories above.
4. Net Profit (below EBITDA)
Depreciation & amortisation — Asset depreciation and amortisation charges.
Corporate & finance costs — Loan arrangement fees, corporate finance advisory.
Interest — Bank interest, loan interest charges.
Tax — Corporation tax provisions.
Exceptional — One-off items such as restructuring costs or goodwill adjustments.
5. Excluded — Not in P&L
Not in P&L (balance sheet/control) — Balance sheet accounts, control accounts, suspense accounts, equity, retained earnings, drawings, and dividends. These are not profit and loss items and should be excluded from EBITDA reporting.
Using AI categorisation
To save time, you can use the Categorise with AI button to automatically suggest categories for uncategorised accounts. The AI uses your account names, codes, and your Xero P&L report structure to make informed suggestions.
AI suggestions appear with a purple highlight and sparkle icon. You can:
Click the tick to accept an individual suggestion.
Click the X to dismiss a suggestion you disagree with.
Use Accept all or Dismiss all at the top to handle suggestions in bulk.
Override a suggestion by selecting a different category from the dropdown.
You can also select specific rows and use AI categorise in the toolbar to get suggestions for just those accounts.
Common categorisation tips
Staff costs vs Personnel costs: Use “Staff costs” (under COGS) for clinical support staff directly involved in patient care (nurses, dental assistants). Use “Personnel costs” (under Operating Costs) for non-clinical staff (reception, management, HR).
Materials vs Lab costs: “Materials” covers items consumed in-house (composites, impression materials, gloves). “Lab costs” covers work sent to external dental laboratories.
Leave balance sheet accounts as “Not in P&L”: Bank accounts, fixed assets, loans, equity accounts, and control accounts should all be marked as excluded. They don’t belong in EBITDA reporting.
Not sure about an account? Check your accounting software to see which P&L section it falls under — this is usually a strong guide for where it belongs in Medfin.
Sub-categories
For more granular reporting, you can create custom sub-categories under any reporting category (except “Not in P&L”). Sub-categories let you break down broad categories into more specific groupings — for example, splitting “Administrative costs” into “Software”, “Legal”, and “Accountancy”.
Manage sub-categories under the EBITDA categories tab in Accounting settings.