Common Questions
Answers to what therapists, psychologists, counselors, and clinical social workers ask me about bookkeeping, payroll, and keeping a practice ready for tax time.
I'm a good therapist and my books are a disaster. How normal is that?
It is extremely normal. Clinicians spend years training for the work in the room and almost no time learning bookkeeping, so the money side is usually the part that slips. Catch-up work has a clear beginning and a clear end, and it says nothing about your skill as a clinician.
Read answerWhat does monthly bookkeeping actually do for a private practice?
Monthly bookkeeping keeps your books current, keeps your financials tax-ready, and gives you a clear view of how the practice is doing. Each month transactions get categorized, accounts get reconciled to the bank, and you get a short set of reports you can read between sessions.
Read answerWhat should I look at in my reports each month if I only have ten minutes?
Look at four things. Revenue compared to last month and the same month last year, the few expense lines that actually move, profit for the month, and cash on hand. That is enough to know whether the practice is healthy, and anything that looks strange can be a quick conversation.
Read answerI've been running my practice through my personal checking account. How do I untangle it?
This is the most common thing practice owners tell me, and it is completely fixable. The fix has two parts, opening dedicated business accounts for everything going forward, and sorting the historical mix so the practice's real activity gets recorded properly.
Read answerWhat does tax-ready books mean if you don't do taxes?
Tax-ready means the books are complete, categorized, reconciled, and documented before your tax preparer ever opens the file. I keep the records right all year so your preparer does the tax work quickly and with very few questions.
Read answerHow do quarterly estimated taxes fit into my bookkeeping?
Your tax preparer calculates the amounts. Your books supply the current profit number those calculations depend on, and they keep the record of what you paid and when. When the books are months behind, every estimate turns into a guess.
Read answerWhat's the difference between profit and the cash in my account?
Profit measures what your practice earned and spent over a period of time. Your bank balance shows what is sitting there at one moment, after payment lags, big annual bills, tax set-asides, and owner draws. Both numbers are true, and they answer different questions.
Read answerDo I need an accountant, a bookkeeper, or both?
Most private practices end up with both. A bookkeeper keeps your records accurate and current all year, and a tax professional uses those records to prepare returns and advise on tax strategy. The two roles work best together.
Read answerWhat financial records should a private practice actually keep?
Business bank and card statements, revenue reports from your practice management system, receipts for deductible expenses, payroll and contractor records, and the bookkeeping file that ties them together. Keep them organized by year and month so any question has a findable answer.
Read answerMy practice is brand new. When should bookkeeping start?
At the beginning, ideally before your first client payment arrives. A practice that opens with a separate business account, a proper QuickBooks setup, and a monthly rhythm never needs a cleanup later, and starting right costs far less than untangling a year of mixed records.
Read answerWhy don't my SimplePractice deposits match my session income?
Your platform pays out after processing fees come off the top, and it batches those payouts on the processor's schedule rather than one per session. That means the bank will never match your session ledger on its own. Good books record the gross revenue and the fees separately so both numbers are real.
Read answerWhere do my payment processing fees actually go in my books?
Processing fees belong in their own expense account, with your session revenue recorded at the full amount clients paid. If you only record the smaller net deposit that lands in your bank, both your revenue and your fees disappear from view.
Read answerHow should insurance payments show up in my books if you don't do billing?
I don't do insurance billing, claims, ERA posting, or credentialing. That work stays in your practice management system or with your biller. What bookkeeping does is reconcile what that process produces, matching every payer deposit that reaches your bank against what your records say you were paid.
Read answerPrivate-pay and insurance money arrive on completely different rhythms. How do the books keep that straight?
Card payments usually land in a couple of business days while insurance remittances take weeks, so any month's deposits are a mix of recent sessions and older claims. Clean books date revenue consistently, separate the payer streams, and break lump deposits back into their pieces so you can tell a slow payment week from a slow month of work.
Read answerHow do no-shows and late cancellations show up in my numbers?
Mostly they show up as an absence, which is why they are so easy to miss. Cancellation fees you actually charge should sit in their own income category so you can see what you recovered, and the cost of the empty slots shows up as the gap between what was scheduled and what was earned.
Read answerI offer sliding scale to a good share of my caseload. What should my books show me about it?
Your books should show your effective rate per session, the gap between your posted fee and what you actually collect, and how much of your weekly caseload sits at a reduced rate. Those three numbers tell you what sliding scale really costs and how much of it your practice can carry.
Read answerWhat does my software stack really cost me per month?
Most practices are surprised by the total once every subscription is added up, since EHR tiers, telehealth add-ons, scheduling tools, directory listings, and card processing fees all arrive separately. Coding them to one category in your books gives you a single number you can review and prune once a year.
Read answerHow do refunds and client credits get handled properly?
A refund reduces revenue in the period you give it back, and prepaid sessions sit as a liability until the session actually happens. Client credit balances need to be tracked by name so nobody's money quietly disappears into the books.
Read answerWhat does it actually cost to run a therapy practice?
Established solo practices commonly run somewhere between $1,500 and $5,000 a month in overhead, and lean virtual practices often come in well under that. Those figures move around and are worth verifying. The number that matters most is your own, and your books can tell you exactly what it is.
Read answerHow many sessions a week does my practice actually need?
Add your real overhead, the pay you want to take home, and the tax reserve your tax preparer sets, then divide by what you actually collect per session. Common benchmarks put a sustainable full caseload somewhere around 18 to 22 sessions a week. Clean books give you honest numbers to put into that math.
Read answerHow do I know if my session fee is too low?
Private-pay fees commonly run around $100 to $200, with specialty work higher, but that range is only context. Your real answer comes from what your practice costs, what you need to take home, and how many sessions you can sustain. Clean books make that arithmetic honest.
Read answerIs my practice actually profitable, or does it just feel busy?
Busy and profitable are two different facts, and only your books can tell them apart. Compare the revenue that actually reached your bank account against your true monthly overhead, then divide what is left by the clinical hours you worked. Full weeks with thin margins usually trace back to fees, no-show leakage, or subscription creep.
Read answerWhich parts of my practice make the most money?
You can only answer this if your books split revenue by service line and you know roughly how many hours each line takes. Individual sessions, couples work, groups, testing, supervision, and workshops all earn differently per hour of your time once direct costs come out.
Read answerDoes keeping my office make financial sense versus staying telehealth?
This is arithmetic your books can settle. Add up the true all-in monthly cost of the office, divide it by the sessions you actually held in that room, and compare that to what the in-person work brings in.
Read answerWhat is a healthy overhead percentage for a practice?
Common guidance puts overhead under roughly 32 percent of revenue for a lean solo practice, with group practices running higher. Treat that as a starting reference to verify, since the number that actually helps you is your own, tracked month after month.
Read answerHow much should I set aside from each payment so taxes never surprise me?
Common guidance runs 25 to 30 percent of profit, and your tax preparer should confirm the right figure for your situation. The percentage applies to profit rather than to the full deposit, so knowing your real profit number is what makes the reserve accurate.
Read answerHow should associate compensation splits be recorded in a group practice's books?
Record the full amount collected as practice revenue and the clinician's share as a compensation expense, never netted together. Track collections by clinician so the split is calculated from a number both sides can see, and apply the written agreement exactly as it reads.
Read answerShould my associates be W-2 employees or 1099 contractors?
Classification is not really a preference you get to pick. It turns on how much control the practice has over the associate's work, and associates who see the practice's clients on the practice's schedule often land on the employee side of those tests. The call belongs with employment counsel and your tax professional, and I make sure the books and payroll records match whichever answer is true.
Read answerWhat does the practice actually pay beyond an employee's wages?
The wage is only the starting number. Employer payroll taxes, unemployment insurance, workers compensation, and benefits all sit on top, which is why a 60 percent W-2 split and a 60 percent 1099 split are completely different economics for both sides.
Read answerCan you run payroll for my group practice?
Yes, as long as your payroll system is already up and running. Aretha processes payroll every pay period and makes sure it posts correctly in your books. She does not handle initial payroll system setup, so a brand new practice would establish that first with its provider.
Read answerWhat has to happen before January so contractor 1099s are easy?
Almost everything. Collect a W-9 from every contractor before the first payment, record payments by payee all year long, and review the totals in December. Do that and January is nothing more than paperwork.
Read answerHow do I know if my group practice actually makes money on each clinician?
Take what each clinician actually collected, subtract everything you pay them, then subtract a fair share of overhead. What is left is what that seat contributes. Run it person by person, because a practice-wide margin can look fine while one seat quietly loses money.
Read answerWhen can my practice afford to add another clinician?
You can afford an associate when the arithmetic works, meaning their pay, the extra overhead that comes with them, and several months of a partial caseload all fit inside what your practice actually collects. Your books supply those numbers, and the decision stays yours.
Read answerWhat changes in the books when a solo practice becomes a group?
Once you are paying other clinicians, the books have to answer new questions. Payroll or contractor payments begin, revenue needs to be traceable to each clinician, shared overhead has to be spread across the team, and your own pay becomes a deliberate line instead of whatever is left over.
Read answerWhat's different about bookkeeping for a psychologist who does testing?
Testing behaves like a second business inside the same practice. The engagements run long, the money often arrives on a different schedule than the work, and materials cost real money, so testing revenue and testing costs belong in their own categories.
Read answerWhy would a psychiatric nurse practitioner choose a bookkeeper who used to be a nurse?
The bookkeeping itself should be excellent no matter who you hire. What my 15 years as a licensed nurse in mental health changes is how much you have to explain before the work can start. I already know the tempo of a prescribing practice and the language you use.
Read answerWhat should an addiction counseling practice's books account for?
Separate income by the kind of work behind it, since individual sessions, groups, assessments, and education programs earn very differently for the time and space they use. Your books also need a consistent way to record sliding scale fees, payment plans, and partial payments, plus clear tracking of group revenue and unpaid balances.
Read answerI'm leaving agency work to start a private practice. What financial setup do I actually need?
You need less than you think. A business bank account, a QuickBooks file set up for a practice instead of a generic business, a simple monthly rhythm starting your first month, and records your tax preparer will want at year end.
Read answerWhat makes ABA practice books harder than a therapy practice's?
It comes down to people, volume, and speed. An ABA practice runs a team of technicians and analysts, so real payroll happens every period, high session volume means revenue arrives as remittances that have to reconcile against the work delivered, and the numbers change fast when the practice grows.
Read answerMy practice is fully telehealth with clients in several states. What does that mean for my books?
On the bookkeeping side, working across state lines mostly means keeping cleaner records. Platform and subscription costs get tracked, payouts get reconciled to real deposits, and income gets organized so your tax preparer can handle whatever state questions apply. Licensing and state tax rules belong with your boards and your tax professional.
Read answerDo you work with practices outside California?
Yes. I work with mental health practices in all fifty states. Lancaster, California is where I sit, and most of my clients are somewhere else entirely, working with me through QuickBooks Online, secure document sharing, and scheduled calls.
Read answerWhat software should a small practice run its money on?
Three pieces cover almost every small practice. The practice management platform you already use for scheduling and client payments, QuickBooks Online for the actual books, and a business bank account underneath both, connected so the deposits reconcile.
Read answerWhy does it matter that my bookkeeper knows mental health?
It saves you from explaining your own practice before you can ask a question, and it keeps your books categorized in the language of a practice rather than a generic business. After more than 15 years as a nurse in mental health, the learning curve happened long before my first bookkeeping client.
Read answerWhat's the difference between catch-up and clean-up bookkeeping?
Catch-up is for books that were never done, meaning months or years with nothing recorded. Clean-up is for books that exist but cannot be trusted because things are miscategorized, unreconciled, or duplicated. Both end the same way, with accurate current books and a monthly rhythm going forward.
Read answerI'm embarrassed to show anyone my books. What will you think of me?
I think it took something to ask. Close to half the people who contact me open with an apology, so you are in good company. The state of your books tells me what work needs doing, and nothing at all about who you are.
Read answerWhat does working together month to month actually look like?
After a short setup, most months are quiet on your end. I categorize your transactions, reconcile your accounts, send you a small list of questions, and deliver reports with notes written in plain language.
Read answerWhat do you deliberately not do?
Four things stay outside my scope. Tax return preparation, insurance billing and credentialing, payroll system setup, and clinical or legal advice. Naming those lines up front means everything inside them gets my full attention.
Read answerHow much does bookkeeping cost for a private practice?
Full-service monthly bookkeeping for a private practice starts at $165 a month. Add-ons like payroll processing, bill payment, invoicing, and 1099s each have their own starting price, and catch-up or clean-up work gets quoted once I see what you have.
Read answerHow do you keep my financial information secure?
I only need financial records, never clinical ones. Documents move through secure file sharing rather than email, I work in QuickBooks Online under my own user login, and I use read-only bank connections instead of shared passwords wherever the bank supports it.
Read answerWhat kind of practice fits AD Keeps The Books best?
Mental health practices with one to about ten people, anywhere in the country. Solo therapists, psychologists, LCSWs, addiction counselors, psychiatric nurse practitioners, group practices, telehealth practices, and ABA providers. If you want your books current and a bookkeeper who already speaks your language, you're the fit.
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