Bookkeeping and payroll for mental health professionals in private practice

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My practice is fully telehealth with clients in several states. What does that mean for my books?

The honest answer is that being spread across state lines changes your books less than most people expect. Where it really matters is licensure, which sits with the boards in each state you practice in, and state tax filing, which sits with your tax preparer. My job is to keep the record organized enough that both of those people can answer their questions quickly instead of guessing.

The bigger day-to-day difference in a telehealth practice is the cost stack. A video platform, an EHR, scheduling, e-signature, a business phone number, cloud storage, and whatever paid tiers you carry all hit the card in small amounts. Each one is small on its own, and the total is often one of the biggest expense lines in an online-first practice. I categorize them the same way every month so you can look at one number and decide whether every subscription is still earning its keep.

Payouts are the piece that gets recorded wrong most often. When a client pays through your platform or a card processor, the money that lands in your bank is net of fees, and one deposit sometimes covers several sessions or several days. If the books only capture the deposit, your revenue looks smaller than it is and your processing fees vanish. I match the payout reports back to the bank so gross income is recorded as income and the fees show up as the expense they are.

Home office and equipment records deserve the same care. Working from a spare room means internet, the desk, the second monitor, the good headset, and the lighting are all part of running the practice. I keep those records organized and separated from household spending, then your tax preparer decides what qualifies and how much. That keeps each of us in our own lane.

If your preparer wants revenue broken out by state, tell me early. QuickBooks Online can tag income by location or class, and setting that up now is much easier than sorting twelve months of transactions next spring. State thresholds and rules vary and do change, so ask your preparer what they actually need for your situation and I will build the books to produce it. One related note, if you hire staff in another state, payroll registration is its own project that belongs with your payroll provider and tax professional. Once payroll is up and running, I am glad to process it each pay period.

A remote practice and a remote bookkeeper fit together naturally. I work with mental health practices coast to coast from my desk in Lancaster, California, and private practice bookkeeping runs the same way your sessions do, by video and shared access, on a schedule that fits around your caseload. If you would like to look at how your telehealth books are set up right now, book a consultation with me and we will go through it together.

Helping the People Who Help Others

Let's Start With
a Short Conversation

Tell me where your books stand right now, even if the honest answer is that nobody has looked at them in a year. I'll ask a few questions and give you a clear idea of how I can help.

More Questions

Do 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.

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What'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.

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What 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.

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Which 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.

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What 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.

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What'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.

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AD Keeps The Books is Aretha Dirden, a bookkeeper who spent more than 15 years as a licensed nurse in mental health before taking over the books for the people doing that work. She handles monthly bookkeeping, catch-up and clean-up work, and payroll for therapists, psychologists, counselors, and clinical social workers in private practice, and she does the work herself for every client. Based in Lancaster, California, serving practices nationwide. QuickBooks ProAdvisor certified.

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