All right, Class. We know you’re brilliant in understanding the human psyche. How about cash-based accounting? Before you bounce off the page, consider this:
As therapists in private practice, we collect money usually at the time we conduct business. At least we try. Even when we accept insurance, there is usually a co-pay collected. Right? There. That’s the definition of cash-based accounting. When the payment is accepted, the transaction is recorded.
Accrual-based accounting is defined only by the transaction, even if no payment takes place. There are advantages to each type of accounting, but most therapy practices, for ease, use the cash-based accounting systems.
Accounting lesson over! Why does it matter? Because whether you are choosing a manual or online bookkeeping system, you will want to define how you record your income. And if you have a practice now in double digits, it may be time to upgrade to online.
Spreadsheets: See this Blog Post for a simple explanation of common Spreadsheets. If you are a confident bookkeeper with a little bit of number knowledge, this is the most cost effective and easiest system to use. It’s a matter of plugging in your numbers and simple addition and subtraction. If you are transitioning from a manual system, this may be your interim step. Hint: Your weekly Business Hour is the time to get this done.
Software: There are two important components of any package that you install on your computer.
First, It should be customized to handle the invoices you need for your practice whether it be for insurance or private pay. Look for a commercial package specifically designed for mental health providers. Check out the survey completed by Capterra.com that shows a long list of software companies.
Second, whatever package you choose, be sure that it is secure and locked in a way that meets or exceeds our ethical requirements.
Web-Based: The benefits of a web-based bookkeeping and accounting system are numerous; storage is off-site and access is available from anywhere. If you are a therapist with multiple offices, you can gain quick access to your records from your phone. We like Therapynotes for ease of use, intuitive reports and customized pages.
The most important part of any program, online or handwritten is consistency in recording and reporting. It’s not that different from charting and collecting fees. Invest in an inexpensive tablet or notebook that is easy to transport and isn’t a barrier between you and your client. In the 10 minutes between clients, you can accept a payment, record it online and jot your notes.
And as we promised, it’s painless!