Financial Wellness for Therapists: Bookkeeping and Accounting Services You Need

We will draft a proposal in a software program called Practice Ignition, and you will sign and send your agreed-upon initial payment. Here’s a full breakdown of the differences between Bench and DIY software. Get free guides, articles, tools and calculators to help you navigate the financial side of your business with ease. Bryce Warnes is a West Coast writer specializing in small Partnership Accounting business finances. This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

Do You Need a CPA for Private Accounting?

However, you can gain insight into your practice’s financial health by reviewing its financial statements on a frequent basis. One of the primary advantages of engaging a CPA is their proficiency in regulatory compliance. Tax preparation is crucial in ensuring adherence to these regulations. Given the complex landscape of healthcare regulations and tax laws affecting therapy practices, a CPA’s guidance prevents costly errors and penalties. They play an essential role in advising on tax-efficient structures and strategies, reducing the burden of compliance, and maximizing financial efficiency. To understand the financial health of your practice, it’s important to regularly review key financial reports.

Pay those quarterly taxes

Hiring a professional financial advisor can help you as a therapist expand and manage your practice efficiently. For a closer look at bookkeeping, as well as the benefits of bookkeeping—and the trouble you may run into if you fail to keep books—check out our article on why bookkeeping is important for therapists. Simply put, bookkeeping is the practice of recording and categorizing all of your business transactions. There are definitely occasions when it makes sense to tackle your own bookkeeping hands-on.

Bookkeeping for Therapists: Simplifying Accounting for Your Therapy Business

Smaller businesses typically hire a freelance bookkeeper, bookkeeping firm, or a remote solution like Heard, to do their bookkeeping for them. In 2020, the federal government estimated that Medicare improper payments against healthcare providers trial balance came to $43 billion. If you want to avoid severe ramifications for your practice, be diligent and well-informed about your billing compliance.

• If invoices aren’t paid on time, running your business can become difficult, if not impossible.
• A streamlined bookkeeping system helps in monitoring claim statuses and ensuring that all claims are correctly recorded, reducing the time spent on follow-ups with insurance companies.
• Maybe your business isn’t in need of a dedicated bookkeeper, but you’d like a place to get individualized support.
• This report is crucial for understanding your practice’s financial health.
• Busy Bee Advisors steps into this space with a promise to make your life easier.

Other Quick Tips for Private Practice Owners

• Once the transactions are entered, here’s how we can assess the Financials Overview of the business.
• An accountant takes the information your bookkeeper prepares, and uses it to file your tax return, taking advantage of as many tax deductions as possible.
• Mixing the two can lead to confusion, make it difficult to track expenses, and even cause problems with the IRS.
• Think of bookkeeping as the detailed roadmap of your practice’s financial health.
• Bookkeeping is not just about ticking boxes; it’s about gaining deep insights into your practice’s performance and making informed decisions about its future.
• As a healthcare provider, you must account for more than just patient payments.
• For example, many therapists probably don’t realize that using online accounting software to maintain financial records and process patient payments is a vulnerability that could result in a security breach.

Still, this route has a little more support than simply doing the whole thing yourself, and is a financially accessible option for most therapists in private practice. Accounting software can help with keeping track of your income, expenses, and payroll. Speaking of upgraded tools, there are certain bookkeeping software features and or integrations that provide a better experience for both you and your clients. It gives you an idea of how many patients to book, and how much you need to adjust your rates and services.

Mixing business and personal finances exposes your assets to financial risks. It can potentially lead to errors in deductions and an increased risk of an IRS audit. At first, it may seem convenient to blend personal and business finances, especially since you likely bookkeeping for therapists need a salary for your personal expenses and money for your business. But not keeping your finances separate can cause serious complications down the road.

• In this article, we’ll look at some popular therapy note templates and provide examples to guide you in creating effective and efficient progress notes.
• For a deeper dive into the types of financial professionals that can help your therapy practice thrive, check out our article on accountants vs. bookkeepers.
• Her work bridges clinical excellence with operational integrity, driving innovation in mental and behavioral health services.
• Setting up QuickBooks for therapists can streamline your bookkeeping process, saving you time and reducing errors.
• Whether your goal is to remain a solo practitioner or to expand into owning a group practice, having a clear financial vision is vital.

Just as your therapy clients rely on your expertise for their wellbeing, your business’s financial health hinges on consistent and accurate bookkeeping. Neglecting this crucial aspect can lead to a perpetual cycle of playing catch-up with your finances and scrambling to meet tax deadlines. It’s possible, with just a simple spreadsheet, to do your own rudimentary bookkeeping for your therapy practice. And if you’re financially savvy—or else willing to learn the ins and outs of double-entry bookkeeping—you can use accounting software. If bookkeeping isn’t your strong suit, or if you’re months or years behind, you might make mistakes and miss tax deductions and tax planning opportunities that could save you money. Outsourcing your bookkeeping could prove to be more cost-effective than you might think, with the financial benefits far outweighing those expenses.