Bookkeeping for therapists

A bookkeeping system can help therapists ensure tax compliance, organize information, and maintain records. Complying with tax laws and regulations is essential to maintaining records, accurately reporting income and expenses, and timely filing of tax returns. Therapy practices should develop a system for organizing receipts, invoices, and other financial documents.

Electronic Records and Bookkeeping Software

• Try to keep track of everything, no matter how big or small the expense, as you’ll have to account for them when you file taxes.
• Here are some techniques to ensure timely patient payments and better manage insurance billings.
• They can provide you with all of your reports for tax time or to take to your appointment with the CPA during tax time.
• You also need to keep business expenses separate from personal expenses.
• Heard has really helped reduce my stress around accounting and taxes.

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Everything you need to manage your financial back office

The exception is your income cannot exceed the total taxable income amount set by the IRS. Therapists operating on a small-mid business level are likely to fall under S corps, LLCs, sole proprietorships, or partnerships. When you meet with the team, we can assess the scope of the set-up job. We will draft a proposal in a software program called Practice Ignition, and you will sign and send your agreed-upon initial payment. Use that information to anticipate slower times of year so you can plan ahead.Set goals to increase profit. Now that you know where you stand, decide if you want to add sessions, diversify your income streams, or adjust your rates.

Practice Management + EHR + Telehealth

To successfully keep your clinical and accounting records separate, you’ll need the right tools. Fortunately, there are plenty of options that make this easy without adding extra work to your day. These terms will help you better understand all aspects of your accounting and bookkeeping, no matter what type of private practice therapy business you have. It’s recommended that you talk to a financial professional or accountant that knows the laws in your state and can help you understand what is expected of you as a small business owner with a private practice. State laws and guidelines vary and change regularly, so it’s helpful to know what the current rules are.

PMS and the like helps you track sessions, treatment plans, and any medication prescribed. They can serve almost as secondary journal entries and receipts to track your transactions. A therapist’s main duties is bookkeeping for therapists to help their clients keep healthy mentally and emotionally. However, as service-based business owners, they are also responsible for their own business’ financial health as well. Understand accrual accounting for therapists and learn how to manage it effectively for a clearer picture of your financial health.

First Month Bookkeeping Free!

Below is our curated list of the 10 best therapy notes software platforms of 2025. Each stands out for particular features and benefits, ensuring you have a range of options to choose from based on your practice’s needs. Make sure both your clinical and accounting records are securely backed up. For clinical data, choose encrypted cloud services like Google Drive with HIPAA compliance enabled. For financial records, any secure cloud storage will do, but make sure access is restricted to avoid cross-contamination of sensitive information. Tasks such as tracking income and expenses, maintaining HIPAA-compliant records, managing insurance billing, and preparing financial statements are essential for bookkeeping.

Expert Bookkeeping & Accounting

• Therapy notes software automates the creation of progress notes, treatment plans, and appointment schedules, freeing up valuable time for clinicians.
• Each stands out for particular features and benefits, ensuring you have a range of options to choose from based on your practice’s needs.
• Many accounting software programs, like Sage, claim to protect your client’s data and ensure proper accounting of your practice.
• See our page Health Therapy Practices for more information about our services.
• Today, there are so many great tools and resources out there that it’s a wonder why anyone is still trying to keep paper records.

Try to keep track of everything, no matter how big or small the expense, as you’ll have to account for them when you file taxes. As remote care and telehealth grow, providers and clients alike will need secure, mobile‑compatible solutions for on‑the‑go documentation and access to treatment plans. AI is rapidly shaping the future of therapy notes software, minimizing manual data entry by automating session summaries and Certified Bookkeeper generating insights into client progress.

It’s almost impossible to bring on new employees or clients if your books are a mess. With an organized process in place, you’ll know exactly when and how you can afford to expand. If your small business receipts are piling up, an expense tracker will help you stay organized and on top of your expenses. Having a fuss-free billing workflow allows you to monitor the status of your claims and ensure they are correctly updated in your books so you can spend less time following up with insurance companies.