Many accounting software programs, like Sage, claim to protect your client’s data and ensure proper accounting of your practice. Others, like QuickBooks Online, a highly-secure platform, are transparent in that they don’t comply with HIPAA standards. Under the Health Insurance Portability and Accountability Act (HIPAA), mental health professionals face strict data security regulations. If you disclose a patient’s Protected Health Information (PHI) for reimbursement or payment, you could face stiff fines and even jail time for extreme violations. In 2021, The Department of Health and Human Services Office for Civil Rights handed out penalties totaling $15 million.

Bookkeeping benefits for private practice owners

• If you want to make sure that your bookkeeping and tax strategy is in the best hands, contact Wellness Fi to find out how our all-in-one solutions offer a holistic approach to your financial well-being.
• In fact, with the right tools and tips, you can simplify your financial management and have more time to focus on your clients.
• In other words, all of the transactions in every bank, credit card, payment processor, and anything else involving money, should be recorded and allocated into a specific category.
• They ensure every transaction is recorded accurately, helping you keep your business expenses in check and your bookkeeping system up to date.
• Yes, we all know that counselors are fantastic record keepers, but did you know that this should apply to financial documentation, as well?

Accounting software is no replacement for human bookkeepers and accountants. Our guide to bookkeepers vs. accountants for therapy practices explains what each one does, and how they can help your business thrive. But if you’re planning to learn more about doing your own bookkeeping, or eventually hand off your books to a professional, QBO is the best option of the three. Not only is QuickBooks an industry standard, but it avoids some issues that other accounting software faces. QBO is a cloud-based solution, so all of your bookkeeping is stored online, and accessible anywhere.

• Deciding on the right LED face mask to reap the benefits of red light therapy and more depends on your skin concerns and goals, as different color wavelengths target unique concerns.
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• You categorize each item in your general ledger according to whether it is income or an expense, and sort it into an account.
• I’ve crossed my fingers and toes for you that you don’t ever get audited by the IRS.

Marketing Your Practice and Building a Client Base

You could save several thousand dollars and find a lot more money in your business when you’re running things better. With a dedicated accountant, you will know that everything is taken care of, including your tax services, so that you can focus on your patients. Of course, you’ll want to be sure to find the balance between software and using real humans to help with the finances– there are some things computers just can’t do. And often the DIY path can often create more problems then problems solved.

Consult with a Professional

Having a fuss-free billing workflow allows you to monitor the status of your claims and ensure they are correctly updated in your books so you can spend less time following up with insurance companies. Whether you do your books on the fly or https://www.bookstime.com/ keep excellent records all year, preparing your statements, receipts, and other paperwork can feel like an all-consuming task. Findtreatment.gov – Find state-licensed treatment options in your area for addiction and substance use disorder.

• It will also help you avoid making (potentially expensive) mistakes when you file your taxes.
• If you work as an independent contractor—for instance, leading group sessions at a recovery home—you may want to break this out into a separate category, like Contract Income.
• If invoices aren’t paid on time, running your business can become difficult, if not impossible.
• For a deeper dive, see our article on how to hire an accountant for your therapy practice.
• In a therapy practice, they manage invoices, process payroll, and reconcile statements.

Again check with an accountant on this, but self-employment tax is typically about 18 to 20% of your net income depending on the state that you live in. And so you will need to save this amount to have to pay each quarter. Otherwise you can get dinged at the end of the year, have a large tax bill waiting plus potential audits from the IRS. A software service gives you access to an online dashboard where you can view financial information and communicate with your bookkeeping team. Transactions are automatically imported from your bank accounts, and categorized by in-house bookkeepers. In conclusion, bookkeeping is a critical aspect of running a successful therapy practice.

It’s a good idea to find a bookkeeper who already has experience working with similar business structures—you’ll need to do less work getting them up to speed on how your therapy practice is run. If your practice has achieved a scale where you’re paying employees or contractors, it’s time to hire a bookkeeper. Whether you’re transitioning your bookkeeping for therapists solo therapy practice into a group therapy practice, or you’re starting a group practice from scratch, you should be ready to handle bookkeeping. Keep all your financial records, receipts, and invoices in a safe and organized manner. Consider using a digital filing system to keep everything in one place and easily accessible when needed.

Employee health plans

Then set aside a time each week or each month (depending on how many transactions you have) to record your expenses. Another thing I highly recommend is that you stay on top of your bookkeeping and accounting throughout the year. The accounting and bookkeeping tools are great to have, but you do need to enter your income and expenses regularly. Once you get things set up, it should only take you a few minutes each day to enter things.

How to Set Up a Chart of Accounts for Your Therapy Practice (with Example)

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Finding the Right Location and Setting Up Your Office Space

• Czech reassures us that it is safe to combine different light therapies.
• Certainly this is not all of the information you will need to run your private practice from the accounting side of things.
• You’re also required to report, on a quarterly basis, all the money you’ve withheld from your employees.
• You run the risk of claiming a personal expense as a business expense, which could land you in hot water with the IRS.

There are four main types of LED light therapy colors — red, blue, yellow, and green — and each color treats a different skin concern. Many of the best LED face masks will employ multiple colors that allow you to switch up your treatment based on your skin goals. Czech reassures us that it is safe to combine different light therapies. You could easily use a red LED face mask on a Monday and safely use a blue LED face mask the next day without a hitch. “LED is a skin care treatment that uses varying wavelengths of light,” explains Newman. These wavelengths penetrate the skin at varying depths to target skin care concerns ranging from signs of aging to acne.

Maintaining separate business accounts and credit cards can simplify your bookkeeping and minimize the risk of claiming personal expenses as business expenses, which can trigger IRS audits. Reviewing your financial statements regularly can provide insights into your practice’s financial health and help you identify areas for improvement. Make sure to open a separate account for your private practice and put all expenses for the business through that account. If you use your name as your business name- you might even qualify for a free checking account. I simply used a free personal checking account for the start of my business.