Here are five essential bookkeeping tips that you should know if you are a therapy practice owner. Organized, compliant bookkeeping doesn’t just make tax season smoother—it safeguards your practice from financial and regulatory risks. When you’re a Pro, you’re able to pick up tax filing, consultation, and bookkeeping jobs on our platform while maintaining your flexibility. Therapists can also claim business expenses on Schedule C, which may include a bigger tax write-off for those with a home office compared to those renting office space outside their home. Accurate records of the square foot of your home used for business can ensure these expenses are deducted on your tax return as a home office deduction. Free up time in your firm all year by contracting monthly bookkeeping tasks to our platform.
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We handle your bookkeeping, provide year-round tax support, help you elect S corp if you have not, and work to reduce your tax bill. The insurance claims billing process isn’t always smooth sailing for clinicians, as problems with claims denials or slow reimbursements can slow your revenue cycle. Our technology is HIPAA-compliant, uses industry best net sales practices, and doesn’t store patient recordings.
What are the common signs that I might need to switch to a different bookkeeping software?
It also helps you spot potential problems before they become serious ones and gauge your progress toward your financial goals. 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.
- They will be able to not just at tax time, but throughout the year as your finances require attention.
- 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.
- Falling behind on your bookkeeping means you’ll constantly find yourself rushing to catch up and file your taxes on time.
- If your clinical and financial data are all mixed together, scaling your practice will feel like trying to untangle a web.
- Therapy practices should develop a system for organizing receipts, invoices, and other financial documents.
- Even if you hire someone, it’s still a good idea to understand the tax implications and best practices for bookkeeping and accounting in your private practice.
Resources for therapists
- Keeping these expenses separate avoids issues with income tax filings.
- They offer professional advice, support, and even mentorship in navigating the complexities of business and financial management.
- This can help cover expenses like gaps in client payments or equipment needed to maintain business operations.
- It will be even more valuable if you can find a private practice focused bookkeeping service that speaks your industry’s language and knows the legal and tax nuances applicable to your industry.
- However, you can gain insight into your practice’s financial health by reviewing its financial statements on a frequent basis.
- By doing so, you’ll be able to transfer income data to your accounting program to keep your books current.
Outsourcing your bookkeeping could prove to be more cost-effective than you might think, with the financial benefits far outweighing those expenses. If you disclose a patient’s Protected Health Information Accounting For Architects (PHI) for reimbursement or payment, you could face stiff fines and even jail time for extreme violations. In 2020, the federal government estimated that Medicare improper payments against healthcare providers came to $43 billion. If you want to avoid severe ramifications for your practice, be diligent and well-informed about your billing compliance. Use this cheatsheet to maximize your deductions and save money on taxes for your therapy practice. 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.
In 2021, The Department of Health and Human Services Office for Civil Rights handed out penalties totaling $15 million. Below is a quick comparison chart summarizing the 10 best therapy notes software platforms in 2025. Use this as a starting point to evaluate which product might fit your practice. By following these practices, you’ll ensure a clean separation between clinical and financial records, protecting both your clients bookkeeping for therapists and your business.
The Future of Therapy Documentation
Whether it’s understanding the nuances of tax laws, selecting the right bookkeeping software, or planning the financial future of your practice, a CFO or business coach can be a trusted ally. They can help you make informed business decisions, stay compliant with regulations, and achieve your financial goals, all while you focus on what you do best—helping your clients. Many therapy notes software platforms also function as practice management tools, uniting billing, scheduling, and documentation under a single system. At CoCountant, we understand the unique financial challenges therapists face. Whether it’s ensuring HIPAA compliance, accurately tracking revenue from session fees, or managing your insurance claims and tax deductions, our bookkeeping services for therapists have got you covered. HIPAA-compliant platforms ensure that sensitive client information stays secure, while bookkeeping software keeps your financial data accurate and organized.