Have you ever been introduced to your own private practice?
Sometimes all it takes is a fresh perspective on your day-to-day work patterns to understand how you can make some significant improvements to your business!
In this article I’ll be introducing you to 4 private practices that all operate very differently. Let’s see if we can uncover some of the most common underlying issues we at GreenOak Accounting see in therapy offices every day.
Private practice #1:
This therapy practice has 20 employees and each is seeing 3-5 clients per MONTH (not per week). In other words, everyone is making very little money. Not ideal. The owner is also handling all phone calls and emails, working on marketing, and is responsible for most of the practice income. What’s wrong with this picture? The owner is not delegating enough. With so many employees putting so little work in, it just isn’t working. The owner is overworked and under-appreciated. If employees are making $100/month in a practice, they simply are not committed!
If this sounds like your practice, your goal is to determine if each employee is actually a good fit for your business! Can they commit a full day each week? Once you know exactly when they are available, you can actively work on filling their schedule–instead of yours.
Also, it might seem counter-intuitive, but sometimes in order to grow a group practice you might need to let go of some clients.
Private practice #2:
In this office, the practice owner reviews the profit and loss statement and it shows lots of profit! The owner fist bumps the air and does a humble victory dance around the office. But wait– a glance over at the bank account dampens the mood. Somehow there is no money left.
If this is your story, here’s what the numbers are saying: You either have too much debt or too much personal spending.
If debt is the culprit, make a goal to pay it down. I recommend using Dave Ramsey’s Debt Snowball method. If you need more ideas feel free to reach out to schedule a consultation.
If debt is not the issue, it’s probably a personal spending issue. Habits in our personal life undoubtedly transfer into our business life. That means the first thing to address is your personal budget and money management. I would start paying yourself regularly instead of just pulling money when you need it. It could be once a month, every other week, whatever works for you! Make a goal to not spend more than that “paycheck”.
Private practice #3:
The owner of a busy practice wakes up early, eats a hurried breakfast, and goes into work. After another full week of clients, they pull up the income statement for the week only to find a GIGANTIC variance from last week.
These numbers could be telling us that the cancellation policies are too lax–especially in a private pay practice. Or, these numbers could communicate inconsistent insurance billing.
If this sounds like your practice, your goal is to start billing. If you’re not billing regularly, hire a biller! It’s WORTH it. If you’re struggling with keeping up on co-pays, use an EHR so you can process the payment when you’re entering your notes.
What’s your cancellation policy? Do you let clients text you to cancel or reschedule at the last minute? If it happens once, it will happen again. It’s time to start enforcing a basic cancellation policy. When you reserve an hour for someone, you deserve to be paid for it.
Private practice #4:
This private practice is set up with Profit First accounts (if yours isn’t yet, we can help). There is plenty in tax, and plenty in profit. Things are going incredibly well. The owner feels free and secure in the financial state and future of the practice.
The numbers are telling us that the owner has been diligent about saving and spending wisely. The practice owner can take out some profit money and do something fun: go on a vacation, eat a nice meal, or buy a new sweater–guilt-free!
This may sound too good to be true, but I promise it is possible. We have seen it again and again. GreenOak Accounting specializes in bringing confidence and financial peace to owners in private practices everywhere. This can be your story, too.
This article is designed to provide information only and should not be considered legal or tax advice. Because of the complexity of the law and the variables in your own personal tax situation, you can’t rely on our advice specifically related to your unique circumstances. In order to get the best tax savings and legal advice available to you, you should consult with your own accountant, attorney or advisor regarding your particular facts and circumstances. GreenOak Accounting is an accounting firm that specializes in working with counselors and therapists in private practice. We provide monthly accounting & bookkeeping services, 1-time services and online courses. For more information on our specialized services for therapists please visit www.greenoakaccounting.com