Where do my payment processing fees actually go in my books?
They belong in their own operating expense account, usually named something like Merchant Processing Fees or Payment Processing Fees. And in most of the practice books I am asked to look at, they are not there at all. That is because the fee never shows up as a charge you pay. It gets taken out before the money reaches your bank, so it hides inside a deposit that is simply a little smaller than it should be.
Here is what that looks like. A client pays $175 for a session. The processor keeps its cut and deposits $169.62. If you record that deposit as $169.62 of income and stop there, your books now show revenue that is short by the fee and fee expense of zero. The correct version records $175 of session revenue and the fee as an expense, and the difference still ties to the $169.62 that hit your account.
Batch payouts make this trickier. One Thursday deposit might cover six sessions from three different days with the fees pulled out of the total. The fix is to work from your processor’s payout report, which shows gross, fees, and net for every batch. In QuickBooks Online, I usually set up a clearing account for the processor, record the gross payments in, record the fees out as expense, and move the payout over to checking. When it is done right, that clearing account returns to zero and everything reconciles.
Watch for the other charges too. Monthly platform or gateway fees, per-transaction fees, and chargeback fees all count. Some processors deduct as they go and some bill once a month, and a few do both, so it pays to read the statement rather than assume. This kind of detail is a normal part of bookkeeping for therapists, and it is the difference between guessing at your numbers and knowing them.
Why bother with all of it? Because a few dollars a session adds up to real money over a year, and you cannot decide whether your processing arrangement is reasonable if the cost is invisible. Understated revenue also throws off your income statement and any look at profitability by clinician or service. On top of that, the 1099-K your processor issues reports gross volume, so books built on net amounts will not tie to it, which creates extra work for whoever prepares your return. Reporting thresholds and rules change, so check the current ones, and leave the tax amounts and strategy to your tax preparer.
Netted fees are one of the most common things I correct during a clean-up, and it is a quiet relief for owners who never understood why their income looked lower than their session count suggested. If you want a second set of eyes on how your deposits are being recorded, book a consultation with me and we will take a look together.
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How 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 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 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 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 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 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.
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