It includes keeping close track of patient billing, insurance claims, and ensuring every financial transaction is accurately recorded and updated in real time. While you focus on patient care, don’t let bookkeeping slow you down. Make sure you give your books and billing the attention it deserves and invest in the right tools to streamline your bookkeeping process, whether you do it yourself or hire a pro.

Financial planning and goal setting

Professional bookkeeping services can often complete tasks more efficiently and accurately than business owners, reducing costly errors and missed opportunities. You may even decide as your business grows to bring your bookkeeping in-house with a full-time employee. But even if you decide to outsource your bookkeeping, don’t check out completely on your business finances. Keep close track of your spending and provide your bookkeeper with the information they need, including well-organized receipts and records. When recording expenses, include the vendor, payment method, and expense category.

How much does it cost to have a personal bookkeeper?

Regularly reviewing financial reports helps you understand the https://www.bookstime.com/articles/bookkeeping-for-therapists financial health of your practice. Looking at all three reports (not just your P&L!) is essential to getting a wholistic view of your practice’s financial health. EHR (electronic healthcare records), EMR (electronic medical records), and PMS (practice management software)  are such tools to help with this.

Get our Tax Deduction Cheatsheet for Therapists

Accountants and financial folks just aren’t your people, and you’re afraid you’ll be judged for asking a stupid question or doing something wrong. For mental health practitioners, adherence to the Health Insurance Portability and Accountability Act (HIPAA) and its stringent data security requirements is non-negotiable. Violations involving the disclosure of Protected Health Information (PHI) can lead to substantial fines and legal consequences. Read the below case study on opportunity cost, which is a great gauge for when it’s right to hire someone, from a financial perspective but also in regard to your quality of life. Calculating your own financial opportunity cost is quite straightforward, so give this a read if you want to find out more. If you want to maintain accurate financials and avoid and normal balance catch discrepancies, here’s what you need to do.

Efficient Tracking of Tax-Deductible Expenses

This can help cover expenses like gaps in client payments or equipment needed to maintain business operations. Therapy practices should develop a system for organizing receipts, invoices, and other financial documents. When pressed for time, it’s tempting to put bookkeeping on the Law Firm Accounts Receivable Management back burner.