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  • Jacquie Kiefer

Your Practice’s Financial Wellness - An Emergency Savings Plan

Over the last year, we’ve seen a return to pre-Covid dips and lulls in the therapy industry. If you started your practice after 2020 this new trend may seem alarming, but in reality this is a flashback to how it was before the industry experienced significant increases in revenue through 2020 and 2021.

People are out living their lives again - beyond the four walls of their homes.

Spring Break, Summer Break, and Holiday Breaks are once again a time to travel.

What does this mean for your practice?

We’ve Seen Some Things

Now, more than ever, is a time to start thinking about building your financial safety net.

During the slower seasons of the year for therapists, cash flow can often feel like a huge struggle. Add in the unknown factors of insurance credentialing timelines, delays in insurance payments, and new clinician hiring struggles, and I’m sure some of you are feeling like you’re experiencing the perfect storm. You’ve heard the idiom, ‘too much month left at the end of the money’- well it’s been a harsh reality for many businesses during this return to ‘normalcy’.

So What Do you Do?

By setting up an emergency savings plan, you can help yourself manage the slow times and increase your sense of security, peace of mind, and the ability to weather unexpected challenges. This isn’t a revamp of your entire business model, but a few simple actions that go a long way to ease your financial worry if client cancellations increase, there are unforeseen expenses, or economic downturns. Here’s how:

Step 1: Assess the Practice’s Financial Needs and Adjust if Necessary

This starts with figuring out how much money your practice needs to operate over the span of 2-3 months. Start by looking at your Profit and Loss statement to see what your total Overhead costs are. (Overhead costs are costs that are incurred to simply run the practice. Things like Rent, EHR subscriptions, and office supplies.) Add up those amounts for the last three months and calculate the average. This should be your target savings goal. If you were just shocked at the amount of money being spent each month, I would encourage you to do an expense audit. Remove any recurring expenses or subscriptions that don’t serve you or your practice well!

Step 2: Make regular Contributions to your Emergency Savings Account

You don’t need to start out with thousands of dollars being moved to your savings account. Just like any business action, it can take awhile to get to your goal, so if you have to start small that’s okay. The point is you’ve started. Consistency is key to reaching your target savings goal, so make sure you schedule a time during your week that makes sense and move the money out of your operating account and into your ‘peace of mind’ account.

Step 3: Define ‘Emergency’ for Yourself, and Stick to It.

Not everything can or should be an emergency. The best advice on how to spend these

funds is to be very intentional about what goes in and what comes out. For example, covering payroll or rent after the loss of a therapist or an insurance billing bottleneck would be an appropriate emergency situation. Lunch for the team? Nope. The point is, you want these funds to serve you in the rough times, so dipping into them for something you want as opposed to something you need is not serving your practice.

Step 4: Give Yourself Grace…and a Plan

Changing habits is hard, but setting reasonable and realistic goals for yourself will help you stick with it for the long run. One of our favorite ways to save for the unexpected is the Profit First cash flow system. The success of Profit First has a lot to do with its tried and true method of leveraging habits rather than changing habits. Money is earmarked for specific purposes through multiple bank accounts so that you’re not spending your clearly marked emergency funds on post-it notes (Learn more about Profit First for Therapists here). However you go about setting up your fund, please choose something that will work for you! Then, give yourself grace along the way. If you make a purchase that you later feel wasn’t a need, make those different decisions the next time you’re faced with a choice. One stumble doesn’t mean your goal is unattainable.

No matter what the remaining 2023 months and the years beyond may hold, I recommend taking some steps to solidify your emergency plan now. Don’t be afraid to ask yourself the hard questions:

What do I do if a therapist or more than one therapist leaves at a time?

What do I do if my marketing efforts don’t go as planned?

How much will I need as a backup reserve if something catastrophic happens?

Then start saving, a little at a time!


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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


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