You opened your mental health practice to provide your clients with quality care, not to become a business finance expert. Yet, the ability to grow, hire, and create the time to provide the best possible care relies on making the numbers work.
Uncovering financial insights takes time. Time you don’t have. However, it’s essential and the more successful you are on the business side of things, the healthier your practice will be for your patients and yourself.
The best way to get to a place where you’re confident in your financials is to go back to the basics.
Rely on a System Built on Technology
For mental health practitioners who aren’t financially savvy, managing finances can be a tall order. There are a lot of moving parts, each playing a specific role in the success of your practice.
This is why it’s important to have a system in place that makes your finances work for you, not against you. Right now, the best answer is cloud accounting.
With cloud accounting, you can:
- Access your finances from anywhere
- Manage your chart of accounts
- Maintain good bookkeeping
- Access important financial data with just a click of a button
Essentially, cloud accounting combines your tools (bookkeeping, bill collecting, document management, etc.) and makes them accessible and easy to manage. It also eliminates manual work, which will keep you more organized and error-free.
At Leichter Accounting Services, we offer a cloud-based accounting system built for mental health practices to make quick decisions and keep your business moving forward.
Keep Your Bookkeeping Up-to-Date
As a mental health practitioner, you already know the importance of keeping good client records. However, the same idea applies to your financial records, as well.
Everything you do can be tied back to your records. This is why it’s so important to be organized and efficient with your bookkeeping. It leads to an easy year-end and better overall control of your finances.
Tax time is the perfect example. Each year you’ll be asked to prove your transactions. Having clear, up-to-date records makes this process much smoother. There’ll be no backtracking and you can provide essential information almost immediately.
When your books are up-to-date, you have the luxury of real-time information. This means when you need to know where your cash flow stands, if you’re on pace with your budget, or if your goals are still in reach, there will be no need to fill in holes and search for information. It will already be there, ready to go.
The easiest way to stay on top of your bookkeeping is to update transactions weekly (at least) and reconcile accounts each month.
Spend Time Learning Your Numbers
Once you’ve set up a solid system and have worked on keeping good records, spend time getting to know your numbers.
They outline where your mental health practice stands financially, and as we mentioned earlier, every number plays a role in your overall success.
For example, your efficiency in collecting accounts receivable can make or break your cash flow, and your cash flow is an indication of the state of your business.
When you understand how these numbers interact, it takes the guesswork out of making the right decisions and provides straightforward answers.
Your numbers also let you see uneasy areas and allow you to make adjustments before bigger problems arise.
Build a Strong Budget
For many mental health practices, a proper budget isn’t a top priority. Maybe you don’t have time or maybe it’s because you don’t have physical goods being purchased before providing your product, so a budget falls to the wayside.
While your expenses may be limited, it still costs money to operate your practice. Some expenses may include:
- Rent for your office
- Continuing education expenses
- Website/marking fees and materials
- HIPAA-compliant communication services – especially if you offer virtual services
- And more
Building a budget with these in mind will help keep spending in check, which ideally increases profit.
This is even more of an essential step right now because of the challenging labor market. A budget will ensure you are profitable and you are giving yourself enough room to hire great talent.
Additional benefits to building and relying on a strong budget include:
- Paying off debt in a timely manner
- Understanding the relationship between your numbers
- Making important financial decisions
Work with an Accounting Service You Can Count On
Understanding the financials for your mental health practice takes creating new habits and focusing on the basics.
You’ll need to build a system, keep your bookkeeping up-to-date, learn your numbers, and rely on a strong budget to see success.
It can be a daunting task for a practitioner who isn’t financially savvy, but this is where Leichter CPA comes in handy.
We offer a cloud accounting system built with your practice in mind, work with you to implement a bookkeeping system that’s easy to use, and spend time building a budget and strategies to keep your numbers trending in the right direction.
Contact us today to see what we can do for your mental health practice.