It’s story time!
We won’t gather around a rainbow alphabet mat…but I think these stories can shed some light on what your numbers are “telling” you.
Here it goes:
Story #1: Delegation
A 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. Bleh. 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.
Some people are born delegators and others of us (…you know who you are…) struggle to delegate.
If your employees are making $100/month in your practice, they simply are not committed! Scheduling new clients is probably difficult because you have to check with them.
What are the numbers telling us? This isn’t working.
The owner is over-worked and under-appreciated.
Now for the good part:
Solutions!
It might seem counterintuitive, but in order to grow a group practice you might need to let go of some clients.
Determine if each employee is actually a good fit for you practice! See if they can commit a full day each week to you. Once you know exactly when they are available, you can actively work on filling their schedule–instead of yours.
BOOM.
Okay, now let’s talk money.
Story #2: Money, money, money!
The practice owner reviews the profit and loss statement and it shows lots of profit! Yeusss! 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. There is no money left.
How?
Here’s what the numbers are saying. You either have:
Too much debt
Too much personal spending
So here’s what you do about it:
Solutions!
If debt is holding you back, make a plan to pay it down! If you haven’t tried it already, I recommend Dave Ramsey’s Debt Snowball. Need more ideas? Hit reply and let’s chat.
If debt is not an issue, let’s talk about personal spending. Habits in our personal life will undoubtedly transfer into our business life. So the first thing to address in a personal budget and money management.
Start paying yourself regularly out of the business. It could be once a month, every other week, whatever works for you! Then don’t spend more than that “paycheck”.
That’s it! No double dipping into the business account because you’re overspending in your life!
No one likes a double dipper.
This next story is for the fully booked practice!
Story #3: Variance?
The owner of a busy practice wakes up early, eats a hurried breakfast, and goes into work. After another a full week of clients, they pull up the income statement for the week…
…Only to find a GIGANTIC variance from last week.
Huh?
What are these numbers telling us?
Often this means that the cancellation policies are too lax–especially in a private pay practice. Or, these numbers could communicate inconsistent insurance billing.
Solutions!
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 enact, or start enforcing, a cancellation policy. When you reserve an hour for someone, you deserve to be paid for it!
Okay, last one!
Story #4: Mission Accomplished
Imagine this: Your practice is set up with Profit First accounts (if it’s not we can help). There is plenty in tax, and plenty in profit. Things are going incredibly well. You feel free and secure in the financial state and future of your practice.
What the numbers are saying?
Go out and have some fun! You’ve been diligent about saving. You started a business to make a living–take out some profit money and do something you enjoy: go on a vacation, eat a nice meal, or buy a new sweater.
Guilt-free.
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 https://www.greenoakaccounting.com/our-specialized-services-for-therap