When you’re a self-employed dietician, bookkeeping is essential for tracking your profits, planning your future, and weathering economic ups and downs.

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And if you carefully track tax deductible expenses for dietitians, you can even benefit from a lower tax bill.

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You can think of this guide as your crash course on bookkeeping for your dietitian practice. Bookkeeping may feel overwhelming at first. But once you’ve got the hang of it, running your practice becomes less stressful, more profitable, and even—possibly—more fun.

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What is bookkeeping for dietitian practices?

Bookkeeping is the day-to-day practice of recording every business transaction in your general ledger. 

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Most bookkeeping systems today are electronic. But the general ledger was once literally a very large book where business owners (or their bookkeepers) made entries each time money was earned (revenue) or spent (expense).

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Each entry in the general ledger includes:

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• The date of the transaction
• The amount of the transaction
• Whether money was spent or earned
• The transaction account or sub-ledger (how the transaction is categorized)

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When you look at your practice’s general ledger you can see a complete history, in chronological order, of revenue and expenses.

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For dietitians, that means you have a record for each time a client has paid you. You also have records of every time you spent money on deductible business expenses like rent, insurance, continuing education, or software subscription fees.

What’s the difference between bookkeeping and accounting for dietitians?

Bookkeeping and accounting are closely related, and sometimes the terms are used interchangeably. But they are really two separate activities.

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Bookkeeping is the practice of recording financial data, while accounting is the practice of analyzing that data and drawing conclusions from it. Accounting also includes tax prep—gathering bookkeeping data and using it to file taxes.

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Most bookkeeping software, as well as financial platforms like Heard, generate financial statements based on bookkeeping data. Financial statements technically fall under the umbrella of accounting.

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Financial statements (also called financial reports) take data from your books and summarize it to show important information about your practice. For instance, a profit and loss statement (P&L) shows your revenue, expenses, and net income for a particular period.

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For most dietitians, the bookkeeping-to-accounting pipeline looks like this:

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1. Over the course of the financial year, you make bookkeeping entries (or your bookkeeper does it for you).
2. On a monthly or quarterly basis, you generate financial statements that measure your performance.
3. At the end of the year, you generate year-end financial statements that summarize your business activity for the entire year.
4. You bring your year-end financial statements, plus any necessary supporting documents, to an accountant who uses them to complete your tax filing.

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Dietitians may also go to accountants for help restructuring their businesses, creating financial projections, and planning for growth.

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When you use Heard, all of your financial statements are generated for you. At the end of the year, your bookkeeping team hands off a year-end financial statement package to professional tax preparers who then file your taxes for you.

Is bookkeeping required for dietitians?

No law requires you to do bookkeeping for your dietitian practice. But bookkeeping is an integral part of most practices’ day-to-day operations—the benefits of up-to-date bookkeeping are vital. In fact, whether or not you keep up with bookkeeping could make or break your business.

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You may just be starting out as a self-employed dietitian. Even so, setting up some form of rudimentary bookkeeping—for instance, with a spreadsheet—will increase your odds of success. It will also make running your practice less stressful and more efficient.

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Here are some major benefits of up-to-date bookkeeping:

Cash flow management

Making sure you have enough cash on hand to cover your business expenses isn’t always straightforward. That’s particularly the case if you deal with seasonality, or ups and downs in revenue due to changing customer demand.

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Bookkeeping lets you see where your money is being spent and how much you have on hand. That means you’ll be less likely to rely on credit to cover expenses, and less likely to go into debt.

Business insights via financial reports

Financial reports are based on information in your general ledger. They’re the multi-tool of business admin, giving you the insights you need to:

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• Cut costs
• Plan for growth
• Increase profits
• Reduce debt
• Expand your business
• Save for the future
• Reinvest in your business

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Virtually any decisions you make that will impact your practice benefits from being informed by financial reports. And the only way to get financial reports is with good bookkeeping. 

Tax preparation

At the end of the year, you or your bookkeeper or accountant produce financial reports summarizing all your business activity for the year.

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Without these year-end financial reports, tax season means playing catch-up, going back through your records to compile the information you need. That results in a lot of wasted time and effort, plus a higher chance of making errors.

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Also, when all your expenses in the general ledger are correctly categorized, you can see how much you spent on different tax-deductible expenses. 

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Here’s Schedule C of Form 1040, where businesses report their deductible expenses. 

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You need detailed records in order to complete this section of Schedule C. Without them, you risk losing out on thousands of dollars in reduced tax liability.

Securing capital

If you ever decide to sell your dietitian practice, or if you’d like to get more capital by bringing on investors, you will require a complete set of financial records for past years. And the farther back the records go, the better.

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Buyers and investors want to see that your practice is profitable. They may also want to measure its growth trajectory and they can make their own plans for the future. They need the type of information that only accurate bookkeeping and financial reports can provide.

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Also, if you apply for a business loan, in most cases the lender—typically a bank or other financial institution—will ask you to submit financial records. They want to make sure your practice is sustainable and that you will be able to afford to pay back the loan.

Long-term planning and growth

What would you like your practice to look like in five years? In ten? With data from your books, you can create financial projections to model your business’ future performance.

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That helps you plan for how you may want to expand your business—by hiring employees, partnering with other dietitians, or even just growing your client list. But it also helps you weather potential storms. 

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Modeling best-case and worst-case scenarios helps you take steps now to ensure you are prepared for whatever comes later. That could include setting aside savings, diversifying your income streams, or limiting operating expenses. Those moves are only possible when you have the kind of precise and accurate financial data provided by bookkeeping.

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Bookkeeping systems for dietitians

Now that you see what bookkeeping is and what it can do for your practice—what does bookkeeping for dietitians look like on a day-to-day basis?

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Your bookkeeping system is made up of the tools and/or professional support you use to do your bookkeeping. Which system is best for you depends on: 

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• The size of your practice and its annual revenue
• Your knowledge and comfort level using different types of financial software
• How much time you are willing or able to devote to bookkeeping each week

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These are the main DIY and professional solutions available to dietitians:

DIY solution: Spreadsheets

Revenue: $0 – $20,000 

Learning curve: Medium

Time commitment: High

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If your total sales for the year come to $20,000 or less, your practice’s finances are simple enough to manage with a spreadsheet in Excel or Google Sheets.

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With a properly set up spreadsheet you can record transactions, organize them by date, and categorize each one. 

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A spreadsheet likely won’t be able to handle double-entry bookkeeping (covered below), and making each entry by hand takes more time and effort than automatically importing transactions (typically an option with every other form of bookkeeping). And if you plan to generate financial reports, you will have to do the math by hand.

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But when your dietitian practice is brand new and your transactions are few, a spreadsheet can serve as a stop-gap solution until you move on to something more comprehensive.

DIY solution: Software

Revenue: $20,000 – $50,000

Learning curve: High

Time commitment: Medium

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Once your practice is earning at least $20,000 per year, it becomes time-consuming to make bookkeeping entries by hand. You’re now at the point where you can save significant time and effort by using bookkeeping or accounting software.

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The biggest benefit of accounting software is that, in most cases, it can automatically import transactions from your bank account. Each time you earn income or spend money on business expenses, the transaction appears in your general ledger. Then it’s up to you to categorize it.

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Most software uses double-entry bookkeeping, and will generate financial statements for you based on the data in your books.

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Word of warning, however: expect a steep learning curve. If you’re new to accounting software, and particularly if you’re new to bookkeeping in general, plan to spend some time following tutorials, taking notes, and logging practice hours before you can use the software confidently.

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When it comes to software, the information in your general ledger and financial statements is only as accurate as the data you enter. So, if you miscategorize a transaction, or if you forget to manually enter a transaction that occurred outside your banking account, software won’t catch the mistake for you. It’s up to you to get it right.

Professional solution: Bookkeeper

Revenue: $50,000+

Learning curve: Low

Time commitment: Medium

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If your practice earns $50,000 or more annually, there’s a good chance day-to-day bookkeeping with accounting software is too much work to be worth the time you spend on it. Plus, because of higher revenue, you can now justify the expense of hiring a bookkeeper.

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Professional bookkeepers work either at a firm or solo, as freelancers. Most use accounting software like QuickBooks to automatically import your transactions and categorize them for you. 

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That solves the problem of errors that may crop up if you categorize transactions yourself. You now have a professional working for you who can guarantee your books are accurate.

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However, hiring a bookkeeper is not a complete hands-off solution. Your bookkeeper may still prompt you to categorize certain transactions they’re not sure how to categorize themselves. That’s especially the case if your bookkeeper lacks experience working with dietitian practices and isn’t totally familiar with your workflow.

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Typically, to collaborate with your bookkeeper, you will be given access to your books via whichever accounting software they use. That means learning the fundamentals of the software and keeping an eye peeled for any alerts that pop up.

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Some bookkeepers work for firms that also employ accountants, so your bookkeeper may be able to pass your books on to a colleague for tax filing each year. Otherwise, it’s up to you to hire your own accountant and bring them the financial statements your bookkeeper prepares.

Professional solution: Heard

Revenue: $50,000+

Learning curve: Low

Time commitment: Low

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In some ways, using Heard is like hiring a professional bookkeeper. 

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Your transactions are automatically imported, and your bookkeeping team categorizes them for you. You also have 24/7 access to your general ledger, financial statements, and other information.

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What makes Heard different? We built our financial platform specifically for dietitians and other wellness practitioners. Every aspect of the Heard experience is geared towards that. Your bookkeeping team is familiar with all the different forms of revenue and types of expenses dietitians record on the books, which minimizes the amount of transactions you need to categorize yourself.

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Most transactions are categorized instantaneously, and financial reports are generated up to the minute. You can access your Heard dashboard any time and get access to all of your business’s important financial information, including visual metrics measuring performance.

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Finally, Heard handles tax filing for you—so there’s no need to hire an accountant. 

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At the end of every calendar year, your Heard team passes your financial statements on to professional tax preparers who file your taxes for you. And since they specialize in serving wellness practitioners, they help you to take advantage of all the tax deductions available to dietitians.

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For a closer look, take a tour of Heard.

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Double-entry bookkeeping for dietitians

Double-entry is the standard method of bookkeeping for businesses worldwide. Whether you use accounting software, hire a bookkeeper, or work with Heard to tackle your books, you will come face-to-face with double entry. 

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In double-entry bookkeeping, every transaction appears on the books at least twice: first, as money entering or leaving an account; and again as money entering or leaving a different account.

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The double-entry method has been around for over four hundred years—and for a good reason. Entering every transaction twice drastically reduces the likelihood of errors. 

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It may seem arcane at first, but once you understand a few basic concepts, double-entry becomes second nature.

Five types of accounts

Every account used in double-entry falls into one of five categories:

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• Assets: Money (or equivalent) you have
• Liabilities: Money you owe
• Equities: Investment in your business (owner’s capital)
• Income: Money you earn
• Expenses: Money you spend

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Each type of account behaves differently depending on whether it’s being debited or credited.

Credits and debits

For the time being, drop any ideas you have about the meaning of “credit” and “debit.” In the context of double-entry, these have nothing to do with plastic cards.

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Every transaction on the books is entered once as a debit or credit and again as a debit or credit. As long as the debits and the credits for a transaction are equal, you’re good. If they’re different, it means there’s an error somewhere in your books.

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Debits and credits act differently depending on which category of account they’re debiting or crediting.

A double-entry example

If what you’ve read so far about double-entry bookkeeping is giving you a headache—relax. The best way to get a sense of how the system works is through hands-on experience.

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Example: You buy a new desk for your office. It costs $1,200. With double-entry, the transaction looks like this:

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This entry simply shows that you’ve taken $1,200 in cash and turned it into $1,200 worth of furniture for your office.

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Can double-entry bookkeeping get more complicated than this? Yes. 

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Do you need to know all the ins and outs of double-entry to start doing your bookkeeping? No. 

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As long as you understand these fundamentals, you can build on them—whether you’re doing your own bookkeeping with accounting software or working with a professional.

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Cash basis vs. accrual accounting for dietitians

There are two methods for recording transactions and managing your books: cash basis and accrual.

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The big difference? The point when you record transactions on the books.

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Cash basis accounting is based on the exchange of money. Nothing appears on the books until money has either been earned or spent.

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Example: Your internet provider sends you a bill for $80. One week later you pay the bill. The $80 is then entered as an $80 expense on the books.

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Accrual accounting is based on when you charge someone money or when you incur an expense. It doesn’t matter whether the payment has actually entered or left your bank account—it’s about business activity, rather than money changing hands.

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Example: Your internet provider sends you a bill for $80. As soon as you receive the bill, you enter it as a liability on the books. One week later, you pay the bill. Your cash account decreases by $80 (the amount paid), and your liabilities account increases by $80. The $80 in your liabilities account was a negative amount. Once you paid the bill, the $80 was wiped out by a positive amount—the $80 from cash.

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Which method you use depends on what is most straightforward for your practice and most accurately reflects the state of your finances. If you hire a professional bookkeeper, they can help you determine whether cash or accrual accounting is the best choice.

Accounts Receivable and Accounts Payable

If you plan to use the accrual method, be sure to familiarize yourself with Accounts Receivable (AR) and Accounts Payable (AP).

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In the example above, the $80 you owe your internet provider is recorded as AP, or money you need to pay. 

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If you invoice clients and use the accrual method, AR is a regular part of daily bookkeeping. When you invoice a client $200, that amount is recorded in AR as an asset—money that will be paid to you. As soon as your client pays, you remove the $200 from AR and add $200 to your revenue account.

The general ledger for dietitians

Your general ledger lists all your bookkeeping transactions. Each entry records:

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• The date of the transaction
• The amount of the transaction
• The transaction account(s)
• The transaction category or categories
• Which accounts were debited or credited

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Your general ledger looks different depending on which bookkeeping method you use (cash basis or accrual) and the bookkeeping solution you choose.

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Here’s an example for a self-employed dietitian. For simplicity’s sake, it uses single-entry bookkeeping. Single-entry is similar to the way transactions are recorded on your bank statement. Amounts in brackets are negative (e.g. expenses).

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To see the total amount you earned as profit (revenue minus expenses) over a particular period, you generate a financial statement—a P&L (covered below).

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When manually making entries into your general ledger, you or your bookkeeper assign income or expenses to the accounts listed in your chart of accounts.

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The chart of accounts for dietitians

Your chart of accounts is a complete list of every account you use to track income and expenses. You can think of each account as a label for a particular type of transaction.

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Each account falls under a specific category—income, expenses, assets, liabilities, and equity. And each of these categories shows up on different financial statements (covered below).

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The chart of accounts differs from one business—and one dietitian practice—to the next. It depends on your different types of income and expenses, and which information you need to record.

Financial statements for dietitians 

Financial statements (also called financial reports) take the information in your general ledger and use it to create documents summarizing important information. 

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A professional bookkeeper may generate financial statements on a monthly or quarterly basis for your practice. 

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Financial platforms like Heard automatically generate up-to-the-minute statements based on the latest data in your general ledger.

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For most businesses, two or three types of financial statements make up the heart of their bookkeeping and accounting:

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• Profit and loss statement (P&L): Sometimes called an income statement, a P&L tells you how much your business has spent on expenses, how much it has earned as revenue, and how much it has kept as profit over a particular period.
• Balance sheet: A report showing you how much your business holds in assets, liabilities, and equity. 
• Cash flow statement: Used exclusively with the accrual accounting method, the cash flow statement reconciles the difference between the income you’ve recorded on the books (e.g. Accounts Receivable) and the income you’ve collected (e.g. your Revenue account). 

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At the end of the year, you generate a P&L, a balance sheet, and a cash flow statement (if necessary) for the entire 12 month period. You or your accountant then use this information to file your taxes.

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A little more about each statement:

The profit and loss statement for dietitians

Your P&L calculates how much you’ve spent and how much you’ve earned, then subtracts your spending from your earnings to determine your profit. 

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A typical P&L includes line items for all of your income accounts (e.g. Client Fees, Sales) and all of your expense accounts (e.g. Rent, Insurance, Utilities, Supplies).

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Looking at your P&Ls, you can see:

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• Which expenses have the biggest impact on your profit (the bottom line)
• How much your income fluctuates from one reporting period to the next
• Your overall increase or decrease in profitability over time

The balance sheet for dietitians

Your balance sheet reports your total equity, assets, and liabilities. By comparing your assets to your liabilities, you can see how much value your practice owns (in property as well as cash) compared to the debt it has to pay (in credit, loans, and other amounts owing). 

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You can also see how much of your own investment (or the investments of others) you’ve put into your practice in the form of equity.

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By comparing balance sheets for different periods you can see:

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• How your assets have grown or decreased over time
• How your liabilities have increased or decreased over time
• The ratio of assets to liabilities, and how it changes

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Also, by analyzing your balance sheet alongside your P&L for each reporting period, you can see the impact your income and expenses have on the amount of value your practice holds.

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Finally, by comparing your liabilities (balance sheet) with your income (P&L), you can calculate your debt-to-income ratio. This is an important measurement of performance financial institutions use when deciding whether to give you a loan.

The cash flow statement for dietitians

Your P&L includes money your practice earns and spends. If you use the accrual method of accounting, you report money you’ve charged clients for as income (Accounts Receivable) and expenses you need to pay (Accounts Payable).

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But since you enter those transactions when they’re incurred, and not when money actually changes hands, your P&L doesn’t give you an accurate measure of how much cash you’ve earned and spent over a particular period.

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The cash flow statement makes adjustments to your P&L so that the numbers you see how cash has moved.

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Your cash flow statements tell you:

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• Your liquidity, or how much money you have available to spend
• The effect of cash flow on your assets, liabilities, and equity
• Trends in cash flow, so you can anticipate ebbs and flows in cash and plan your spending wisely

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Insurance bookkeeping for dietitians

When it comes to bookkeeping, billing insurance isn’t wildly different from billing a client directly. There’s simply an extra account involved.

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The Insurance Reimbursements account records income reimbursed by insurance companies. It’s an income account, meaning it reports money your practice has earned. 

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If you use accrual accounting, your Insurance Reimbursements account connects with your Accounts Receivable, which reports income you’ve charged for but haven’t collected as cash.

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So, when you bill insurance, you record the amount under Accounts Receivable (as an asset). When you receive payment, it moves to Insurance Reimbursements (as income):

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The exact entry in your books will look slightly different depending on what type of bookkeeping system you have set up. Generally, though, you should make sure income in the form of reimbursements is labelled differently than income from cash pay clients. That way, on your P&L, you can measure the impact of insurance reimbursements, as a distinct form of revenue, on your profits.

Bookkeeping best practices for dietitians

If you have a bookkeeper working for you, or if you use Heard, you have a fairly simple set of bookkeeping best practices to follow:

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• Make sure your bookkeeper has the information they need to do the books
• Answer any questions your bookkeeper may have about categorizing expenses
• Keep records of every expense you plan to claim as a tax deduction

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It gets a little more complicated if you do your own bookkeeping.

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Here’s how to make sure your books are accurate and up to date.

Separate personal and business finances

This principle applies to any self-employed dietitian, whether you use a professional bookkeeper or take the DIY approach.

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If your business cash is mixed up with your personal cash, it can lead to serious errors. The moment you go into business, open a separate business checking account (and, if necessary, apply for a separate business credit card).

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That way, when your transactions are automatically imported into your bookkeeping system—or when you review your bank statements and enter transactions manually—there’s no question which transactions are for business and which are personal.

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Also, if you operate as a limited liability company (LLC), you could compromise your limited liability by mingling personal and business finances (this is called “piercing the corporate veil.”) That means your personal assets may be on the line in case of debt collection, insolvency, or legal proceedings.

Reconcile the books 

Reconciling the books is the practice of checking entries in your general ledger against information recorded in your bank statements. 

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Even if transactions are automatically imported into software (or into your bookkeeper’s system), mistakes can happen. Certain transactions may not be imported, or they may be imported more than once. Refunds may not show up, or entries may be incorrectly categorized.

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At the end of each month, reconcile your books with your bank account. It’s part of regular bookkeeping best practices for every business, and it can save you a world of trouble.

Generate and analyze regular financial statements 

When business is going well and you’re making a healthy profit, you may be tempted to run your bookkeeping on cruise control and neglect your financial statements.

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However, even if you aren’t running into trouble now, it may be brewing—in the form of stagnant cash flow, for instance, or gradually increasing liabilities, or unnecessary expenses that eat away at your bottom line.

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By making a habit of generating and analyzing your financial statements each month, you’ll always keep tabs on your finances. You can catch problems before they become serious. Even better, by looking at your statements and comparing them from one month to the next, you may find ways to make your practice more profitable.

Catch up on bookkeeping when you need to

If you’ve fallen behind on bookkeeping, procrastination will only make the problem worse.

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Falling behind may take the form of: 

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• Forgetting to import or manually enter transactions on the books
• Not bothering to generate financial statements 
• Losing track of where money is going and where it’s coming from

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Out-of-date books not only fail to give you the information you need to run your business well; the problem tends to compound over time. 

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You may find that tax season has suddenly arrived and you don’t have the information to file and pay your taxes. At that point, you’re in a much worse situation—dealing with IRS penalties—than you would be if you had simply gone back earlier and done the work to catch up.

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If you’ve fallen behind on bookkeeping and the problem has become overwhelming, don’t be ashamed to contact a professional bookkeeper for help. Or get in touch with us here at Heard. We can catch up on your bookkeeping for you and keep it on track for the future.

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Common bookkeeping pitfalls for dietitians

In addition to keeping on top of bookkeeping best practices, it’s a good idea to recognize the problems self-employed dietitians most commonly run into when doing their books. Here’s what you need to watch for if you plan to do your own bookkeeping.

Missing entries

An entry may be missing from the books because you forgot to make it, or else because your accounting software failed to import the transaction. In either case, it throws a wrench into the gears of your bookkeeping. 

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Left undetected, missing entries can create discrepancies in your financial reports months later, even causing trouble when tax season rolls around.

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The solution: Reconcile your books each month.

Miscategorizing entries

Particularly when you’re just starting out, it’s easy to make mistakes categorizing bookkeeping entries. 

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Minor errors—like labeling an insurance reimbursement as cash paid directly by your client—may not spell disaster. But they can add up over time and lead to inaccurate financial statements that fail to reflect how your business is really performing. 

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The solution: Familiarize yourself with your chart of accounts and double check your entries.

Sticking with systems that don’t work

A common problem for dietitians whose businesses are growing: they’re comfortable using spreadsheets or the accounting software they started their practice with, and stick with it even as their workload becomes unmanageable. 

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The stress from financial admin can spill over into other parts of their business, and even lead to burnout. 

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If bookkeeping is starting to stress you out, start tracking how much time you spend on it each week. Then translate those hours into your hourly rate for client consultations: that’s the cost of bookkeeping for your practice. 

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With that in mind, consider whether you’d be willing to spend the same amount (or less) in cash on a professional solution.

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The solution: Remain flexible and open to new ways of managing your finances, and make the switch when the time is right.

Throwing out records

For every tax-deductible expense you claim, you should maintain records to back that claim up. 

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For instance, if you claim $24,000 in deductions for office rent on your taxes, you should have receipts from your landlord proving you paid all $24,000 over the course of the year. If they audit your business, the IRS will ask for proof supporting all your claims. If you come up short, you could be on the line for the tax you originally deducted.

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The solution: Set up a recordkeeping system and hold on to all proofs of purchase for at least three years or, ideally, six.

HIPAA compliance and bookkeeping for dietitians

For the sake of remaining HIPAA compliant, you need to guarantee that none of your clients’ protected health information (PHI) is recorded in your bookkeeping system.

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PHI includes any evidence that clients received care from you. That includes their names. Any software that stores your clients’ name must be certified HIPAA compliant, meaning it meets certain security standards for HIPAA. 

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If you’re using software like QuickBooks or Xero—or if your bookkeeper is using it—you are not using a HIPAA-compliant method for storing client data. Client names and other information should not be included in bookkeeping entries.

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If your bookkeeper—or your accountant, or any professional outside your practice—has access to information in your general ledger, and your general ledger includes your clients’ names, you’re in breach of HIPAA.

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Whatever bookkeeping solution you use, follow these best practices:

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• Avoid including client names or any other information in ledger entries (e.g. in notes or account names used to identify payment from clients)
• When you need to refer to a particular client in your books, use a confidential client number to do so
• Only invoice clients using HIPAA-compliant software, like your EHR
• Do not share clients’ names or personal details when discussing business with bookkeepers, accountants, tax preparers, or any other financial professionals

Is the cost of bookkeeping tax deductible for dietitians?

Now for the good news: any money you spend on bookkeeping software, hiring a bookkeeper, or using Heard is 100% tax deductible.

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If you are a sole proprietor, you can report your total bookkeeping expenses for the year with Schedule C of Form 1040, on line 17 as “legal and professional services.”

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(Other business entities, like LLCs filing as S corps, use their own tax returns to report deductible expenses.)

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You can also deduct the cost of hiring accountants or tax professionals on the same line.

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All of this helps to offset the cost of a professional bookkeeping solution for your dietitian practice—a solution which will likely, in the end, make your practice more profitable and easier to manage.

Key takeaways

• Bookkeeping is the practice of recording financial transactions for your dietitian practice.
• A tax preparer (CPA or EA) uses your bookkeeping information (including year-end financial reports) to file your taxes.
• By keeping up with bookkeeping, you gain insight into how your business is performing and enjoy a simpler, easier tax season.
• Cash basis accounting only records when money changes hands, while accrual accounting records when income is earned or expenses incurred.
• The general ledger is where you record and categorize all transactions for your dietitian practice.
• The three key financial reports are the P&L (measuring your profit), the balance sheet (measuring your assets, liabilities, and equity) and the cash flow statement (correcting discrepancies between accrual accounting and cash on hand).
• For the sake of HIPAA compliance, your clients’ personal health information (PHI) or other information should never appear in the general ledger or in any other part of your bookkeeping system.

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With Heard Bookkeeping, you get done-for-you monthly bookkeeping and easy-to-understand financial reports. Click here to learn more.

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

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Bryce Warnes is a West Coast writer specializing in small business finances.

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