Objective To provide a clinical update on the purposes, evidence-base and recommendations for both clinician and patient-rated outcome measures in psychiatric practice. Conclusions Private and public sector funders have implemented outcome measurement systems in Australian mental healthcare, in order to improve cost-effectiveness. It is important to consider the ultimate aims of outcome measurement from various perspectives in evaluating the evidence-base, as there are a number of measurement dimensions to address. For individual clinicians, the purpose may be to guide treatment-planning, as well as to assess treatment and clinician efficacy. For patients, the purpose is to assess outcomes in terms of their goals for recovery, as well as to evaluate their satisfaction with the care provided, and their healthcare providers. The other orthogonal dimensions of measurement comprise, the proximal to illness measures of symptomatic severity, and the distal measures of disability, which apply to both clinician and patient outcomes. In turn, these measures may be used by healthcare funders in public or private sectors as proxy measures of the cost-effectiveness of psychiatric care provided. Clinical registries linked to service-mapping would provide better data for patients, providers and funders to assess the availability and effectiveness of psychiatric care in Australia.