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The Glossary of Bookkeeping and Tax Terms for Therapists

If you’ve recently started your own therapy practice and you’re new to bookkeeping and accounting, it’s important to understand some key terms. This short glossary will get you started—whether you’re doing your own bookkeeping and accounting, or having the experts at Heard handle it for you.



The process of taking day-to-day financial records, prepared as part of the bookkeeping process, and using them to generate financial statements that give you insight into how your business is performing. These insights can help you build budgets, prepare and file your taxes, and plan how to scale your business. More advanced moves, like changing your business entity or setting up payroll, also fall under the broad term “accounting.”

Accrual accounting

One of two accounting methods, along with cash basis accounting. Using the accrual method, when you earn money, you record it as revenue on the books (accounts receivable), even if you haven’t actually received the cash payment. Similarly, when you incur debt, it’s recorded as an expense, even if you haven’t actually paid it (accounts payable). 


Anything of value your business owns. Assets are either tangible (they exist physically) or intangible (they exist on paper). Your practice’s tangible assets may include furniture, computers, books, therapeutic tools, or the building where your office is based. Intangible assets may include cash or accounts receivable (money someone owes you).

Balance sheet

One of the three main financial statements (along with profit and loss and cash flow statements), your balance sheet reports all your business’s assets and liabilities up to a certain date. Balance sheets are typically prepared on a monthly or quarterly basis. 


The practice of recording and categorizing day-to-day transactions for your business. Every time you earn money, it’s recorded in your general ledger, and categorized according to what type of revenue it is. Every time you spend money, the same thing happens, except it’s categorized according to what type of expense it is. Looking at your general ledger, you can get an overview of the different ways you spend and earn money. The information generated by bookkeeping is used to create financial statements.

Cash basis accounting

One of two accounting methods, along with accrual accounting. Cash basis accounting records income when you receive it in the form of cash, and records expenses when the cash to pay them leaves your bank account. Contrast this with accrual accounting, which records income and expenses when they’re earned or incurred, respectively, regardless of whether you have the cash in hand.

Cash flow

The measure of how quickly revenue you earn becomes cash. If you use the accrual accounting method, when your business is owed money, the amount is recorded as income you’ve earned and an asset on your balance sheet. However, you don’t actually have the cash in your bank account, so you can’t spend it. Once the debt is paid, it becomes cash. Tracking cash flow is important for making sure you can cover your expenses.

Cash flow statement

One of the three major financial statements, along with the profit and loss statement (P&L) and balance sheet. The cash flow statement is only necessary if you use the accrual accounting method. It fixes discrepancies between how much you’ve earned versus how much cash you’ve received, so you understand how much cash (versus other assets, like accounts receivable) you have to work with.

Chart of accounts

In bookkeeping, an account (also called a ledger) is a category of revenue or expense. Your chart of accounts lists all of these categories, and you or your bookkeeper refer to it when categorizing transactions.

Deductible expense

An expense you can report on your tax return in order to reduce your taxable income. The amount of a deductible expense is either wholly or partially deducted from your gross income. Since you must pay income tax on all income you report, this reduces your total tax burden. See our complete list of tax deductions for therapists.

Double-entry bookkeeping

The most common method of bookkeeping. For every transaction, two entries are made: One for cash going into an account (referred to as a debit) and another for cash leaving a different account (referred to as a credit). Double entry accounting helps ensure your books are accurate, and any professional bookkeeper you hire will use it.


Employer insurance number (EIN)

Even if you don’t have any employers, your business requires an EIN in order to open a bank account and form certain business entities like limited liability companies (LLCs). Your EIN is used to identify your business on all federal tax filings. Learn how to get an EIN for your therapy practice.

Financial projection

A model of your business’s future financial performance based on past trends and current trends. You might use a financial projection to estimate how much you expect to earn during a certain period, or how much cash you’ll have in the bank by a certain date. Or you may use a financial projection to model the impact of potential changes to how you do business—for instance, taking on additional clients, increasing your fees, or reducing certain expenses.

Financial report

An overview of financial information for your business, covering a particular period, and based on transactions recorded in your general ledger. The three major financial reports are the profit and loss statement (P&L), balance sheet, and cash flow statement.

General ledger

In bookkeeping, the general ledger is the main document that tracks all your business transactions, categorizing each as either a debit or a credit (in double-entry bookkeeping) and assigning it a category (an account) based on your chart of accounts.


Money your business owes. Liabilities are reported on your balance sheet, along with your assets. Typical liabilities include loan debt, money owed contractors, and unpaid bills. 

Limited liability company (LLC)

A type of business registered on the state level that can elect one of a number of different business entity types or tax filing statuses at the federal level. An LLC gives you more liability protection than a sole proprietorship (the default entity type for new businesses), while also giving you more flexibility in how you file your taxes. Learn how to choose a business entity type for your therapy practice.

Owner’s draw

An owner’s draw is the money you pay yourself from your business’s earnings. Depending on your business structure, you may either be an employee of your own business (in which case you earn a paycheck) or you and your business may be identical for tax purposes (in which case you pay yourself an owner’s draw). For the sake of keeping your bookkeeping organized, it’s important to officially take an owner’s draw, as opposed to dipping into your business bank account whenever you personally need cash.

Payroll tax

Money withheld from an employee’s paycheck. You must withhold payroll tax even if you’re paying yourself as an employee. “Payroll tax” is an umbrella term covering federal and state income tax, Social Security payments, and Medicare.

Profit and loss statement (P&L)

One of the three basic financial reports, along with the balance sheet and cash flow statement. Sometimes called an income statement. The P&L tells you how much money you earned (revenue) and how much you spent (expenses) over a particular period, and your total income (revenue minus expenses). P&Ls for your therapy practice may be generated monthly or quarterly, and annually for the purpose of filing taxes.

Qualified business income (QBI) deduction

The QBI deduction allows you to deduct up to 20% of your gross income for the year, provided your business meets certain requirements. It can be a bit complex to figure out, but has the potential to significantly lower your tax burden. Check out our guide to the QBI deduction for therapists.

Quarterly estimated taxes

If your practice owes more than $1,000 in federal taxes for the year, you’re required to file quarterly estimated taxes. Effectively, you’re paying tax on the money you’re earning during the year, rather than waiting until after the year ends to pay a lump sum. Learn more from our guide to quarterly estimated taxes for therapists.

Want to lower your tax bill? Our guide to the most valuable write-offs for therapists is the place to start.

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.


The Best Cancellation Policy for Your Therapy Practice

Creating policies for your therapy practice can feel like an overwhelming task, and many therapists with new private practices find drafting a cancellation policy particularly difficult.

On the one hand, lack of a clear, definitive cancellation policy could lead to lost earnings and havoc with your schedule. On the other hand, clients sometimes have valid reasons for cancelling appointments at the last minute, and enforcing a cancellation policy may feel harsh.

But you can strike a balance between looking after your business’s needs and looking after your clients’ needs; it just takes a little planning. Here’s how to create the best cancellation policy for your private practice.


Why do you need to create a cancellation policy?

When you’re just starting out as a self-employed therapist, you may be tempted to go ahead and start taking on clients without having them agree to a cancellation policy. But that can lead to problems.

A major dent in your income

It doesn’t take many clients cancelling appointments to create a serious strain on your financial situation.

For instance, suppose you charge $100 per session, and on average you get one last-minute cancellation per week. By the end of the year, your revenue will be about $5,000 short of what you would have earned otherwise.

But it’s about more than a shrunken paycheck. When revenue is hard to predict—fluctuating week-by-week and month-by-month because of cancelled sessions—it’s difficult to make financial projections. You’ll have a harder time creating and sticking to budgets, setting goals for the future, and eventually scaling up your practice.

Eliminating or reducing the toll last-minute cancellations take on your income isn’t about greed, it’s about ensuring your practice stays afloat financially.

An unsustainable schedule

You deserve a predictable schedule with clearly delineated business and personal time. Last-minute cancellations directly hinder that.

For instance, when a client cancels their session the day before you’re due to meet, you may find yourself with a free hour in the middle of a day otherwise packed with sessions. Sure, you could spend the time catching up on notes. But maybe if you’d known of the cancellation further in advance, you could have shifted around your appointments and ended the day early—enjoying some much-needed personal or family time.

On top of that, it’s likely you reviewed your notes and prepared yourself mentally and emotionally to work with that particular client. When they cancel at the last minute, your preparation goes to waste.

When you have a cancellation policy in place, clients are less likely to ditch appointments at the last minute—so your schedule is more predictable and easier to manage.

Poorer outcomes for your clients

When it’s easy to ditch therapy appointments at the last minute, some clients may find it more difficult to commit to a course of therapy and to working steadily toward their mental health goals. 

Lack of a cancellation policy could make it easier for clients to avoid sometimes-difficult therapy sessions. The result is stagnating progress and an overall lack of commitment on their part.

What to include in your cancellation policy

When you draft a cancellation policy for your therapy practice, these are the elements you should include.

A signature

Last things first: Your policy takes the form of an agreement, which your client signs. Not only does this give you a supporting document in any disputes about payments or cancellation fees, it can help your client mentally and emotionally commit to following the policy.

Key information about you and your client

Be sure to include your client’s full name, as well as your name and credentials and your practice’s name.

Statement of purpose

It’s a good idea to provide a brief outline as to why the policy exists and how it serves both you and your client. 

You can use this part to help explain to your client the purpose of the cancellation policy, and to help them understand how last-minute cancellations negatively impact you both.


Or: How last-minute is a last-minute cancellation? Most therapists go with a 24-hour, 48-hour, or 72-hour time frame. 

If your time frame is 48 hours, for instance, your client has up to 48 hours before your appointment or the day of your appointment to notify you of a cancellation. So, if they cancel the night before their session, they’ll incur a fee; if they cancel three days beforehand, they won’t.

The timeframe you settle on will depend on your own particular schedule, and how much notice you feel you need to keep it running smoothly. 

The fee

If your client cancels at the last minute, can they expect to pay the full cost of the missed session? Half the cost? Or a flat rate that applies regardless of the cost of the session?

While your clients may come from different economic backgrounds and you may offer sliding scale fees, be consistent with your cancellation fee. If the fee is the full price of the missed session, that applies no matter who the client is. 

Waivers (aka “freebies”)

Some therapists allow their clients one free last-minute cancellation after they begin working together. If the client cancels at the last minute, they more or less get off with a warning that, next time, they’ll have to pay a fee. 

Other therapists don’t offer any waivers or freebies. It’s up to your personal preference and what you feel comfortable with.


In some cases, events totally beyond a client’s control may lead to them cancelling a session or failing to show up. Examples include sudden illness or injury, or home or family emergencies.

Whatever exceptions you make to your policy, try to be as clear as possible in the policy document itself which exceptions you’ll accept. Judging clients’ reasons for cancellations on a per-case basis can lead to unclear boundaries and difficult decisions.


If your sessions are typically in-person, will you allow a client to attend a remote therapy session in case of certain last minute cancellations (eg. because of bad weather or childcare issues)? If they’re unwilling to attend a remote session, will you charge them the cancellation fee?

Cancellation limits

For some clients who are unwilling or unable to stick to regularly scheduled therapy, cancellation fees may not be enough of a disincentive to continually cancel sessions at the last minute.

How many sessions may a client cancel last-minute before you end your therapeutic relationship with them and refer them to someone else? It could be:

  • X cancellations in a month
  • X cancellations total
  • X cancellations in a row

Be clear about this, and specify what sort of notice or warning clients can expect from you before you start discussing their moving to another practice.


If a client cancels last-minute, will you offer to reschedule their appointment to the next available open spot? Will you put them on a waitlist in case another client cancels? Or will they need to wait until your next scheduled session to see you?

How they’ll be charged

Explain clearly how you’ll collect late fees—whether as extra cash or credit payments collected at a later session, or charges made directly to the client’s card on file. You should also specify that any invoice you send them for the session will include a line item noting the payment is for the cancellation, not a full session.

Notification of changes

Specify how and when you’ll contact your client in the event your cancellation policy changes, and reassure them that you’ll explain it and get their consent before the new policy goes into place.


How to share your cancellation policy with clients

Have all new clients read and agree to your cancellation policy before you start working with them. This is the best way to make sure everyone is on the same page from Day One, and that there will be no surprises, confusion, or hurt feelings when it comes to cancellations.

Make a copy of your cancellation policy available to your client, ideally in a digital format that can’t be lost or damaged, and keep a signed copy for your files.

Double up your policy

Give your client two opportunities to read and agree to your policy:

  1. As part of your informed consent document, which they sign when you begin working with them
  2. Separately, as its own document, reviewed and signed at the time they receive the informed consent document

A new client may skim through the informed consent document and fail to absorb the details of your cancellation policy. They may also skim the policy itself. But if you follow this method, you at least give them two opportunities to become aware of the policy and take the time to read it.

Best practices for enforcing your cancellation policy

Cancellations can be emotional. Your client may be dealing with stressors in their life—pressure from work or family, personal struggles when it comes to attention and time management—that push them to cancel at the last minute.

At the same time, you may experience your own emotional impact when a client cancels last-minute—frustration, weariness, or blows to your self-esteem.

But, at the end of the day, your cancellation policy is a professional matter, a tool for helping your practice stay solvent and manageable. Here are some best practices for making it easier to enforce.

Discuss it the first time it happens

Whether you waive the fee for a client’s first cancellation or collect it, take some time at the beginning of your next session to briefly review your policy with them and reiterate that they will be charged in the future if they cancel again.

Keep a credit card on file

It’s easier—interpersonally and logistically—to simply charge your client’s credit card when they incur a late fee than to try to collect a debit card or cash payment. If your client misses a session, send them a reminder about your policy and a notification that their card will be charged.

Explain your reasons while remaining professional

Whenever you discuss your cancellation policy, be clear with your client that cancellation fees are not a form of punishment. By collecting fees, you’re helping to ensure you can stay in business and continue serving every client on your list. And your policy helps to keep them accountable to their therapy goals, ensuring the outcome is positive.

A clear, concise cancellation policy is just one piece of paperwork you need to keep your practice running smoothly. For a full list, check out the complete list of policies and paperwork for your therapy practice.

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.


The Complete List of Policies and Paperwork for Your Therapy Practice

The policies and paperwork your therapy practice uses play an essential role in setting expectations and boundaries with patients, supporting you in the event of legal proceedings, and ensuring you get paid.

Since laws and regulations vary from one state to another, and no two private practices are exactly alike, it’s impossible to provide one-size-fits all policies and paperwork here. 

But these guidelines will get you started drafting your own forms or adapting prewritten paperwork to your needs.

Heads up: If you’d like to get a jump start with a complete package of prewritten paperwork for your therapy practice, check out the Essentials Paperwork Packet from Private Practice Pro. It includes every document listed below.

Table of contents:


Authorization for Release of Information

This form, signed by your client, authorizes you to share information from your sessions with any of the individuals or institutions listed.

It should be signed in the event you need to share clinical information with a third party.

The Authorization for Release of Information should include:

  • Your client’s name and date of birth
  • Your name and credentials
  • The list of individuals or institutions you’re being authorized to share information with
  • The types of information you’ll share
  • How the information may be shared (phone, email, etc.)
  • Your client’s signature and the date

You should also include a section confirming that the client understands the terms under which you’ll share their information, and any potential risks. Write it in the first person from the client’s perspective, ie. “I understand that…”

Client Financial Responsibility form

This form, signed by your client, confirms that they understand how much they are expected to compensate you for therapy services, and the conditions of that compensation.

This form should be signed before you begin working with a new client.

The Client Financial Responsibility form should include:

  • The name of the person paying for the services (the client or their guardian)
  • The name of the person receiving the services
  • When they will pay (immediately after sessions or on a monthly/quarterly schedule)
  • The client’s responsibilities, including the responsibility to notify you if the plan to stop paying for services
  • Confirmation that the client understands they may be charged extra fees in certain instances (for instance if they cancel their appointment at the last minute or if their payment can’t be processed)
  • Confirmation that the client understands services may be canceled if they fail to pay
  • The client’s signature and the date

Consent for Telehealth Consultation

This form confirms that your client is willing and ready to go ahead with telehealth sessions. 

You should have your client sign this form before beginning any telehealth therapy with 


The Consent for Telehealth Consultation form should include:

  • The client’s name and signature, and the date
  • Confirmation that the client understands how to use the telehealth software and that they’re prepared to go ahead with telehealth
  • Confirmation that the client understands the various benefits (eg. flexibility) and risks (eg. unauthorized access to data)  involved
  • Confirmation that the telehealth sessions may discontinue if either you or the client don’t believe they’re the right method to use
  • Confirmation that they’ve had a conversation with you about beginning telehealth therapy

Credit Card Authorization Form

This fairly straightforward form lists your client’s credit card information so you can charge them for sessions. You can keep it securely on file to reference in the future.

The Credit Card Authorization form should include:

  • All the information you need in order to charge your client’s card
  • Confirmation that the client consents to being charges for therapy services
  • Your name and credentials, or the name of your business
  • Your client’s name
  • Your client’s signature and the date

Estimate of Benefits

This form lists the amount a client should expect to pay out of pocket after benefits are applied. It’s an estimate based on information the client’s insurance company gives you. 

You should provide this form after you’ve checked the client’s insurance information and determined how much expense it will cover.

The Estimate of Benefits form should include:

  • The client’s name
  • Your name and credentials, or your business’s name
  • The your practice’s address and contact information
  • The client’s contact information
  • The amount of the client’s deductible
  • The amount of the client’s copay
  • How much of the deductible the client has paid to date

You should also include a section:

  • Defining what a copay is
  • Defining what a deductible is
  • Explaining to whom the client much pay their copay and deductible, respectively, and when
  • Text confirming that the client understands the information you’re providing is only an estimate, and that it may change; their insurance provider has the final say

Good Faith Estimate

This form breaks down how much a client can expect to pay if they work with you. 

You can provide this automatically or at the patient’s request.

Make clear in the text of this form that it’s not a contract guaranteeing that you’ll charge a certain amount, or a recommendation of a particular course of treatment. 

Factors affecting the estimate include:

  • Your hourly fee
  • The type of service you’re providing
  • If you anticipate a certain number of sessions (eg. in the course of group therapy treatment), how many there will be

Be sure to note these factors on the form.

You’ll also need to include:

  • The client’s name and contact information
  • Your name or your practice’s name and contact information
  • What type of services you’ll be providing
  • The hourly fee you charge (or fee for a 50 minute session)
  • How long the good faith estimate is valid for (typically 12 months)

Also include a section with estimates covering particular periods of type. For instance:

  • Estimates of weekly cost of one session per week vs. two sessions per week
  • Estimate of the cost of three months’, six months, and twelve months’ worth of sessions at a rate of either one or two per month

Finally, include information about how the client can pursue a complaint with the US Department of Health and Human services if they believe they’ve been overcharged. (Typically $400+ above the amount listed in the Good Faith Estimate.)

Health Insurance Opt-Out

This form simply confirms that the client has decided to opt out of insurance coverage, and that they understand they’ll be paying you out-of-pocket for therapy services.

It also confirms that the client will inform you in case they start new insurance coverage or decide to start applying their current insurance benefits.

On the Health Insurance Opt-Out form, include:

  • The client’s name and date of birth
  • The client’s signature
  • The date on which the client is opting out
  • The client’s current coverage


Informed Consent for Psychotherapy

This form is extremely important. It establishes that the client understands what undergoing psychotherapy entails, and what kind of risks are present.

You should have your client sign this form before you begin providing them with any therapy services.

The Informed Consent for Psychotherapy form should also include:

  • A statement outlining their client held privilege of confidentiality, including its limitation
  • Under what circumstances you may share anonymous, non-specific information about your sessions with them and how that information will be shared (eg. when consulting with other professionals)
  • Expectations and conduct in the event you happen to meet your client outside of a clinical setting

You may also include information on your rates, your cancellation policy, and how you may or may not conduct sessions using telehealth software.

The Informed Consent form can vary considerably from one therapist to the next. You can find numerous examples with this google search.

Intake Questionnaire (Adult)

Your intake questionnaire is meant to provide you with all the information you need to start providing a new client with therapy. 

You should provide an intake questionnaire after a consultation, before you begin formally working with a client.

Items on your intake questionnaire for adults should include space for them to provide the following information:

  • Name and date of birth
  • Contact information, including specific phone numbers or email addresses for confidential communication
  • Sex, sex assigned at birth, gender identity, and sexuality
  • Occupation
  • Relationship status
  • Present partner or spouse
  • Past and present marriages
  • Children or grandchildren
  • Parents and step parents
  • Whether their parents were divorced. If so, a few notes about their family structure and how it affected them
  • Current medical care provider
  • Medical history
  • List of current medications
  • Prescribing psychiatrist for medications (if any)
  • Notes about past experiences undergoing psychotherapy
  • Family medical history
  • Family history of addiction or mental health issues
  • Family history of heritable medical issues
  • The presenting problem (the reason they’re seeing you)
  • The estimated severity of the presenting problem (mild to severe)
  • Current drug and alcohol use
  • History of drug and alcohol abuse and treatment 
  • Past suicide attempts or psychiatric hospitalizations
  • Notes about childhood events or conditions that may impact their presenting problem
  • Information on any pending civil or criminal litigation, including divorce
  • Online activity, including estimated time spent daily on social media, browsing, gaming, texting, work/school, and other activities
  • A checklist for chronic health issues or symptoms
  • A checklist for chronic mental health symptoms that have lasted longer than six months, including appetite changes, difficulty concentrating, anxiety, depression, fatigue, self-harm, fear, hopelessness, etc.
  • Friendships and important relationships
  • Religion, belief, and spiritual practices, and the role they currently play in their life
  • Notes on their hopes, fears, and the sources of joy in their life
  • Their goals or hoped-for outcome attending therapy sessions

You may choose to modify this list of questions based on your own specializations, or based on questions that frequently come up in therapy sessions which may not be listed above.

Intake Questionnaire (Parent)

Your intake questionnaire for parents or guardians or teenage clients is meant to provide you with all the information you need to start providing their child or dependent with therapy.

You should provide an intake questionnaire after a consultation, before you begin formally working with the client. This intake questionnaire is provided in addition to the one you give the client.

Items on your intake questionnaire for parents should include space for them to provide the following information:

  • Parent’s name
  • Teen’s name and date of birth
  • Parent’s contact information, including specific phone numbers or email addresses for confidential communication
  • Their teen’s current medical care provider, medical history, list of current medications, and prescribing psychiatrist (if any)
  • Family medical history
  • Family history of addiction or mental health issues
  • Family history of heritable medical issues
  • Parent’s current occupation, and notes about how they balance work and family
  • Teen’s past suicide attempts or psychiatric hospitalizations
  • Teen’s presenting problem, including a measure of severity, and how the presenting problem affects the parent
  • Elements of teen’s developmental/child history important for you to know as their therapist
  • Teen’s drug/alcohol use, to parent’s knowledge
  • How they feel about their teen’s drug/alcohol use
  • How drugs and alcohol are discussed at home
  • Whether their teen is sexually active
  • Whether their teen’s sexual activity is of concern to them
  • How intimacy and sexuality are discussed at home
  • Whether their teen is involved in any pending civil or criminal cases
  • Information on their teen’s screen time, including home many hours per day they spend on social media, gaming, texting, browsing, doing schoolwork, or other activities
  • Any concerns they have about their teen’s screen time and internet use
  • A checklist for chronic health issues or symptoms affecting their teen
  • A checklist for their teen’s chronic mental health symptoms that have lasted longer than six months, including appetite changes, difficulty concentrating, anxiety, depression, fatigue, self-harm, fear, hopelessness, etc.
  • Where their teen goes to school
  • How their teen performs academically and socially
  • Their teen’s current living situation, and relevant details about custody and housing
  • Information on any other family members that may have attended therapy, and the outcomes
  • Information on past attendance at family therapy sessions—if any—and outcomes
  • Their goals for their teen’s counseling, as well as what they believe to be their teen’s goals and desired outcomes
  • Their teen’s strengths, and how they may be of benefit in therapy
  • What they perceive to be their teen’s weaknesses and challenges
  • Any additional information they’d like to provide
  • A statement on if/when you would ever bring up psychiatric medications with their teen, and space for the parent to provide information on their stance on psychiatric medications

You may choose to modify this list of questions based on your own specializations, or based on questions that frequently come up in therapy sessions which may not be listed above.


Intake Questionnaire (Teen)

Your intake questionnaire for teen clients is meant to provide you with all the information you need to start providing them with therapy.

You should provide an intake questionnaire after a consultation, before you begin formally working with the client. This intake questionnaire is provided in addition to the one you give their parents or guardians.

Items on your intake questionnaire for teen clients should include space for them to provide the following information:

  • Name and date of birth
  • Contact information, including specific phone numbers or email addresses for confidential communication
  • Sex, sex assigned at birth, gender identity, and sexuality
  • Current medical care provider
  • Medical history
  • List of current medications
  • Prescribing psychiatrist for medications (if any)
  • Notes about past experiences undergoing psychotherapy
  • Family medical history
  • Family history of addiction or mental health issues
  • Parents, step-parents, and their relationship with them
  • Whether their parents were divorced. If so, a few notes about their family structure and how it affected them
  • Siblings and their relationship with them
  • Relationship status and info about any current romantic relationships
  • Employment (if any)
  • Where they attend school and which grade they’re in
  • How they’re performing in school, how they feel about their performance
  • Current living situation
  • Support system (family, friends)
  • Information about drug and alcohol use
  • Information about any struggles with addiction
  • How drugs and alcohol are discussed at home
  • Sexual activity
  • How sex/intimacy is discussed at home
  • Any pending civil or criminal legal proceedings
  • An overview of their childhood and how it has affected them
  • Online activity, including estimated time spent daily on social media, browsing, gaming, texting, work/school, and other activities
  • A checklist for chronic health issues or symptoms
  • A checklist for chronic mental health symptoms that have lasted longer than six months, including appetite changes, difficulty concentrating, anxiety, depression, fatigue, self-harm, fear, hopelessness, etc.
  • Their presenting problem (why they’re seeing a therapist)
  • Friendships and important relationships
  • Whether they have ever attempted suicide or been hospitalized for psychiatric reasons
  • Whether they struggle with thoughts of suicide or self-harm
  • Whether they struggle with thoughts of harming others
  • Their favorite thing about themselves
  • Extracurricular activity and groups
  • Where they feel most peaceful/happy
  • Their desired outcomes from therapy
  • Any additional info they’d like to provide

You may choose to modify this list of questions based on your own specializations, or based on questions that frequently come up in therapy sessions which may not be listed above.

Official Practice Policies

This document lays out how you will charge your client, how you will interact outside of the clinical setting, their rights to privacy, and other important concerns for both of you.

Your Official Practice Policies document is sort of a master document specifying ground rules for your client’s relationship with you.

It should include:

  • Appointment and cancellation policies, including how much notice you require before a cancellation and how much the client is charged if they fail to give you enough notice
  • Payment and billing info, including how much you charge by the hour, when your client is expected to pay, what happens if they don’t pay, and how they’ll be notified if your fees change
  • Phone accessibility info, including what number they can reach you at, the hours during which you can receive phone calls, what occasions are acceptable for them reaching you by phone
  • A social media and internet policy, typically specifying that you won’t follow or interact with the client on social media
  • Electronic communication info, typically specifying that you can’t guarantee absolute privacy in regards to email and other forms of internet messaging
  • Clinical notes info, explaining what type of notes you’ll take during therapy, how they’ll be stored, and who will have access to them
  • A minors policy, specifying what type of information the patient’s parents are legally entitled to
  • A termination policy, laying out how termination will occur if either you or the patient decide to end your relationship, the steps that will be taken, and what type of advance notification each party should expect
  • Confidentiality info, explaining how you will protect the client’s information and their client confidentiality privilege 
  • When you may be required by law to disclose confidential information to third parties
  • When disclosure of their information requires the client’s authorization
  • When disclosure of their information does not require the client’s authorization
  • The client’s rights in regards to their personal information
  • Places for the client’s name, signature, and the date where they can acknowledge they understand and consent to your official practice policies

Statement of Insurance Reimbursement

This form, also called a superbill, is used by the client to claim insurance coverage for therapy services.

Your Statement of Insurance Reimbursement form should include:

  • Your provider information, including name, business name, contact information, and license numbers
  • The client’s name and contact information
  • Payment and reimbursement information, including diagnosis codes, amount owing, amount already paid, the place of service, and the date of service
  • Authorization for the insurance company to pay benefits to you, the provider, signed and dated by the client
  • Authorization for you to release relevant information to the insurance provider, signed and dated by you

Termination Summary Form

You fill out this form and keep it on file after you stop treating a client. 

Your Termination Summary Form should include:

  • The client’s name
  • The date you started treating your client and the date you stopped
  • A checklist where you can specify the main reason for termination (eg. treatment completed, client refused to continue, etc.)
  • Who decided to terminate treatment (whether you, the client, or both)
  • The kinds of services rendered (eg. individual, group, or family therapy)
  • A general description of the treatment you provided
  • Notes on the client’s progress, including their goals, progress, and outcomes
  • Your diagnostic impression of the client at time of termination, including and dangers or concerns with compliance, medication, etc.
  • Referrals and reasons for referrals, if any
  • Follow-up care
  • Any additional comments

There’s one more document no therapy practice should be without: Our HIPAA compliance checklist.

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.


How to Talk About Money with Your Therapy Clients

‍This article is co-authored by Mentaya

As a therapist, discussing money-related issues with clients can feel awkward and at odds with being a caring, supportive clinician.

There is a real fear that if you say the wrong thing you could damage your relationship with a client. However, addressing financial topics is not only an unavoidable part of the job, it can actually help you build a stronger therapeutic alliance. 

Let's talk about some practical tips for discussing your rates at that first consultation call. These takeaways will empower you to handle awkward money moments effectively, with empathy and clarity. 

Do get clear on your rates before you get on the call

Decide what your rate is before getting on the call. Do you offer sliding scale? What will you say if a client asks for a discount? 

The first step before any conversation is to be clear in your own mind about your position.  

Don’t go into too much detail 

You’ve just told a prospective client your session rate, take a breath. It can be scary to wait in the silence as your client mulls it over, but don’t give in to the pull of justifying your rate or policy.  Let your expertise speak for itself. 

Giving more detail can imply that there is something wrong with your rate or that you are not confident in requesting it. Avoid justifying your fees excessively, as it may undermine your confidence.

Do determine your policies in advance

Are you willing to meet in-person? If so, how often? When and where? 

Do you take insurance? If not, are you “insurance friendly?” Meaning you’re open to clients working with a platform like Mentaya to get you reimbursed for therapy?

Don’t speak too fast

When you speak quickly it can raise red flags. Make sure to to take your time and pause throughout the conversation to leave space for questions. 

Speaking at a calm, moderate pace indicates that your are confident and secure in the policies and rates you are discussing. 

Do follow-up in writing

It’s always good to provide written documentation after a conversation to avoid any misunderstandings. It can be as simple as a quick email following up with forms and recapping the rates and policies you discussed. 

Given you’re likely to repeat the same content with many clients, its always handy to have a template ready to copy & paste.

Don’t expect clients to sign-up straight away 

It’s important to give prospective clients time to think things over. Many make the mistake of indicating they would be willing to consider a lower rate when they don’t get an immediate response. 

It can be helpful to acknowledge that entering into therapy is a significant investment of time and money. Encourage clients to discuss their budget with their partners and get back to you.

Do offer to refer clients to other therapists

This signals to clients that you are not just in it for the money, but genuinely care about helping them find support. Making a genuine offer like this can reinforce your rapport. 

Navigating expectations around money is not only a logistical chore, but can actually set the tone to your therapeutic relationship. When you discuss your rates and policies you are modeling boundary setting and how to navigate a uncomfortable topic where people express differing needs.


Mentaya helps therapists attract and retain clients at their full cash rate. Mentaya gets clients 70% back on therapy without therapists or clients lifting a finger! Try it risk-free for 30 days using promo code HEARD.

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.


Can You Hire Family Members to Work at Your Therapy Practice?

Hiring family members makes sense on an intuitive level. It saves you the time and effort of recruiting strangers, and it gives you the chance to help one of your relations advance their career. Win-win, right?

While turning your therapy practice into a family business could come with benefits, it also introduces new complexities—namely child labor law (if you’re hiring younger relatives) and certain aspects of payroll (mainly if you’re hiring your spouse).

Here’s everything you need to know so you can hire family members the right way.


Is hiring a family member nepotism?

The Oxford English Dictionary says nepotism is the “unfair preferment of or favoritism shown to friends, protégés, or others within a person's sphere of influence.”

Maybe that definition has you picturing an exposé on the nightly news: “Local Therapist Accused of Nepotism.” Is that the kind of publicity you can expect if you hire family members?

Not likely. Hiring family is a fairly common practice among small business owners. You’ve probably frequented a family-run business in the past: A convenience store where parents and their adult kids work the register, for instance. In fact, the term “mom ‘n pop” shop alludes directly to this practice. 

It’s important to keep in mind the scale you’re working at. If you ran a telehealth platform with millions of dollars of funding, and gave all the top positions at your company to blood relatives, anyone accusing you of nepotism would be justified in doing so.

But you run a small therapy practice; in fact, you may currently be the only person working there. Recruiting your niece to run your social media account, going into business with your spouse who is also a therapist, or hiring your brother-in-law to design your website: None of these are likely to result in accusations of nepotism.

It also helps if the family members you’re hiring are qualified. It’s one thing to hire a family member who has the background and experience to do the job well, and another to hire them simply because they’re related to you, taking away an employment opportunity from a non-family member who may be qualified. 

In that case, not only are you being unfair, but you’re making an unwise business decision by hiring someone who won’t do the job well. (And whom you may be forced to fire—making your next big family Thanksgiving awkward.)

Do you get a tax deduction for hiring family members?

Gross wages or fees paid to employees or contractors in the course of doing business are tax deductible, providing they’re ordinary and necessary. It’s no different when you pay a family member.

However, you may be able to make smart tax moves by hiring your spouse. More on that below.

The pros and cons of hiring family members to work for your therapy practice

Hiring family members comes with benefits and drawbacks. Particulars vary: Hiring your spouse to work for you may mean higher stakes—in terms of the potential for complications in your personal life—than hiring a distant cousin.

But generally speaking, here’s what to watch out for.

Benefits of hiring family members:

  • Faster, easier hiring. No need to draft a job description for public consumption, post it on job boards, review resumes, and book interviews. Hiring a family member is typically more straightforward (and less expensive, if you’d otherwise hire a recruiter) than vetting members of the public at large.
  • Better character insight. It can be hard to get a sense of someone’s personality from a job interview and resumé alone. There’s always the possibility a seemingly-perfect candidate will be totally unbearable to work with. When you hire a family member, you already have a sense of how you’ll jibe on a personal level.
  • Potential tax savings. Some of the extra expenses that come with having an employee on the payroll—FICA in particular—become a non-issue when you hire your spouse.
  • Family pricing. If you hire a family member as a contractor, they may offer you special pricing because you’re family. (Learn more about hiring independent contractors.)
  • Trust. It’s hard to quantify or put a dollar value on family bonds and the trust between family members. But, of the many reasons small business owners often hire family members, this is a major one. You may simply be better able to trust a family member to do their job well and handle sensitive tasks for your business than you would a stranger.

Drawbacks to hiring family members:

  • Mixing business and personal life. Working with family is bound to create crossover between your professional and personal lives. If you’d rather keep work and home cleanly separated, hiring a family member may not be the best way to go.
  • Bias. You may find it all too easy to overlook someone’s shortcomings as an employee when you see them as a family member to whom you’re personally responsible. Poor performance you’d find intolerable in an employee may be a mild irritant or an amusing quirk in a family member—even if it costs your practice money.
  • Lack of diversity. Hiring a family member with a similar background to yourself means you’re forfeiting the opportunity to bring onboard someone with a different perspective. Having team members from different backgrounds provides a voice in the room to challenge your assumptions and introduce points of view you may never have considered on your own.


Should you hire your spouse to work at your therapy practice?

Almost any family member you hire will be treated by state and federal law as a regular employee. The fact that you’re related doesn’t change anything for legal or tax purposes.

With one exception: Hiring your spouse.

When your spouse is your employee, you can both save a substantial amount on taxes—provided you play your cards right.

 Here’s what you need to do.

1. Make sure your spouse is a bona fide employee

If the IRS questions any tax benefits you enjoy because your spouse is an employee, they’ll typically question whether your spouse is a bona fide employee at all.

Having a written and signed employer-employee agreement is not enough; in fact, according to the Bradford Tax Institute, it can actually create more problems than it solves.

Most important is making sure your spouse qualifies as an employee in the eyes of the law. To do that, they must:

  • Do real work. The best way to prove this is by tracking their hours and maintaining a list of duties they perform at your therapy practice. 
  • Do not co-own the business. If your spouse owns any business assets, they may qualify as a partner in a partnership—in which case your relationship is that of partner and partner, not employer and employee.
  • Work under your direction. In meeting notes, emails, and other written documents, it should be clear that you’re the one making management decisions, not your spouse.
  • Get paid. In most states, you are not required to pay your spouse the minimum wage. In fact, it’s usually more beneficial for you if you pay them solely in fringe benefits, like medical coverage, and forego cash altogether. But any reimbursable expenses your spouse-employee incurs should be charged to their personal checking account, not your business account.
  • Earn reasonable compensation. Even if your spouse earns only in the form of fringe benefits, their compensation needs to be reasonable and not exorbitant. Since your spouse’s earnings are a deductible business expense, the IRS is on the lookout for over-the-top payments.

Finally, you need to make sure you comply with state laws pertaining to employees. These vary. You may need to register your spouse as an employee and withhold workers’ compensation payments.

2. Make sure your practice is a sole prop or a single-member LLC

In order to benefit from spouse-employee tax moves, your practice needs to be either a sole proprietorship or a single member LLC. S corporations, partnerships, or LLCs electing those tax statuses won’t qualify.

3. Instead of cash, pay your spouse tax-free benefits

Remember, in most states, you are not required to pay your spouse minimum wage. It’s usually better not to pay them cash at all.

When you pay your spouse cash as their employer, you have to withhold income tax and FICA deductions. (FICA is 15.3% of the employee’s gross wages; one half of that amount (7.65%) comes from their wages, one half comes from their employer.)

It’s true that your employees’ wages are tax deductible—they lower the overall tax bill for your business. But the tax burden is effectively just passed on to your spouse, who ends up paying taxes on their wages as an employee.

(Thanks to the unlimited marital deduction, you can transfer non-wage funds to your spouse and they don’t need to pay income tax on it.)

Instead, opt to pay your spouse in tax-free fringe benefits. The “tax-free” part refers to the fact your spouse doesn’t need to pay income tax on these forms of reimbursement. At the same time, the cost is tax deductible for your business, lowering your overall tax bill.

4. Explore tax-free benefits as compensation

There are a number of tax-free fringe benefits to consider when compensating your spouse:

  • A health reimbursement arrangement (105-HRA), in which you reimburse the cost of medical expenses, typically has potential for the biggest tax writeoff. Learn how 105-HRAs work.
  • Education. Any reimbursement for job-related education your employee undertakes is tax deductible.
  • Life insurance. You may provide up to $50,000 in group term life insurance tax-free.
  • Working condition fringe benefits. The cost of equipment necessary for your spouse to do their job—like a work phone or computer—is tax deductible.
  • De minimis fringe benefits. Small expenses like occasional meals or entertainment for employees are tax deductible.

Since the particulars of hiring employees varies state by state, and there’s the potential to attract extra IRS scrutiny when hiring your spouse, consult with an accountant before taking any major steps.

Hiring family members who are minors to work at your therapy practice

If you have a younger relative who is considering going to school to become a therapist, hiring them to work part time at your practice is a great way to show them what day-to-day operations look like.

State laws and hiring minors

Some of the labor laws you need to follow for minors are determined at the state level. Get in touch with your state’s labor office to learn about them. 

Some states require you have a work permit, age certificate, or combination of the two for your minor employee before they can start working for you. Here’s a state-by-state guide.

Typically, the employee requests a form from their state after you’ve hired them but before they begin work; their parent or guardian fills out and signs the form, and sends it back to the state for approval. After that, they receive a certificate.

Some certificates have expiry dates, after which they need to be renewed. It’s your employee’s responsibility to get a certificate and your responsibility to make sure they have one.

Federal laws and hiring minors

Labor laws for hiring minors are determined at the federal level by the Fair Labor Standards Act (FLSA). 

The federal minimum employment age is 14 years, and anyone under the age of 18 years is considered a minor. If you hire someone who is 14, 15, 16, or 17 years old, there are federal laws you need to follow. These mostly pertain to when and for how long your employee can work, as well as their federal minimum wage.

(Other laws pertain to what kind of work they can do, preventing minors from doing potentially hazardous jobs. The table below only notes the restrictions relevant to a typical therapy practice.)

Ages Time restrictions Hour restrictions
14 or 15 7am – 7pm Max 18 hrs per school week.
Max 3 hrs per school day.
Max 40 hrs per non-school week.
16 or 17 None None

Best practices for hiring family members to work for your therapy practice

Whether you’re hiring your spouse or your second cousin twice removed, there are a few best practices you should try to adhere to when hiring family.

  • Create a job description. Even if you’re not publicly advertising a position at your therapy practice, you should create a thorough job description. Include a name and description for the role, as well as duties, expectations, compensation, and benefits. This gives you and your family member a clear foundation to work from, and helps avoid disputes later on.
  • Conduct an interview. When you’re hiring somebody you already know well, it may be tempting to simply have an informal chat and then hire them. But that approach makes it easy to miss important details. For instance: How long do they anticipate working for you? What are their career goals? What types of conditions do they work under best? Being upfront about that now saves you uncovering these details on the job, and makes sure the working arrangement is a good fit for the both of you.
  • Be upfront about the fact you’re related. If the topic comes up in conversation with clients, other therapists, or anyone who wants to know, don’t dissemble. Hiring a family member doesn’t make you a nepotist, and there’s nothing to hide. But skating around the fact can make the whole matter more awkward than it really is.

Many self-employed therapists hire family members part-time to work as their administrative assistants. Learn more about hiring an administrative assistant for your therapy practice.

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.

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


The 9 Most Common Accounting Mistakes Therapists Make (and How to Avoid Them)

When you run your own therapy practice, all it takes is a simple accounting mistake to land you in trouble. 

That’s especially true when you’re new to running your own practice: All-too-common oversights, like failing to withhold income for taxes or neglecting financial reporting, can lead to issues with the IRS or your own cash flow (respectively).

Here are the nine most common accounting mistakes made by newly-employed therapists, and how you can avoid them.


1. Mingling personal and business finances

When therapists make this mistake, it’s most commonly because they only have one checking account—a personal one—that they use for all their income and expenses.

Intermingling your personal finances and your therapy practice’s finances makes it difficult to get a clear read on how your business is performing.

For instance, suppose you pay your recurring business expenses (office utilities and rent, software subscriptions) using the same bank account you use for personal expenses (apartment rent, car payments, personal subscription services). 

After you extract information from your bank account to calculate your therapy practice’s expenses—or when your accounting software does it automatically for you—you’ll need to go through and manually sort the professional from the personal expenses. 

Not only does this eat up valuable time and energy, but it increases the likelihood you’ll miscategorize a personal expense as a business expense, or vice versa.

The simplest solution? Open a business checking account for your therapy practice.

2. Missing out on deductible expenses

If you do your own bookkeeping and accounting, there are a number of reasons you could fail to track and report deductible expenses:

  • Lack of confidence: You’re unsure of what counts as deductible and what doesn’t. Erring on the side of caution, you fail to claim deductions your business is eligible for.

  • Lack of awareness: You don’t track your expenses with software or a bookkeeping solution like Heard, so you don’t have insight into your expenses.

  • Lack of planning: You don’t keep receipts or other records of your expenses, so you don’t feel confident deducting the expenses on your taxes. (That’s valid—you should keep records to back up every claim you make on your tax return.)

Deductible expenses aren’t some arcane tax trick—they’re a totally valid way to reduce your tax bill. When you claim a deductible expense, some or all of the value of the expense is subtracted from your gross income for the year, reducing the income you owe taxes on. For many companies, claiming expenses is an essential part of keeping their accounts in the black.

For more info, check out our complete list of tax deductions for therapists.

3. Failing to withhold income for taxes

If you’re used to being paid by an employer and having income tax automatically withheld from your paycheck, self-employment can come as something of a shock.

When you’re self-employed, it’s up to you to pay your income tax either in quarterly installments or after you file your taxes. In order to do so, you should plan to set aside 25 – 30% of everything you earn so you have the cash on hand to pay.

Many therapists in their first year of self-employment forget or neglect to set aside a portion of their income. They rarely make the mistake a second time: Trying to pay down your whole tax bill for the year without any savings in reserve can seriously sting.

For a deeper dive, check out our guide to quarterly taxes for therapists.

4. Throwing out receipts

If you claim deductible expenses on your tax return, you must be able to back up your claim with a paper receipt or some other record proving you actually incurred the expense.

The IRS doesn’t want businesses claiming deductions on expenses they never actually paid. In the event of an audit, the auditors will demand to see a receipt supporting every expense you claimed. In some cases, they may go as far back as six years into your prior tax returns looking for supporting documentation.

Failing to keep receipts is common; being audited by the IRS is less so. But if you’re unlucky enough to be audited and you haven’t kept accurate records, you could end up owing the IRS a significant sum.

You can learn more from our article, Do Therapists Need to Keep Paper Receipts?


5. Forgetting about their budget

Roughly speaking, there are two parts to using a budget to plan your therapy practice’s finances. 

The first part consists of projections—planning what you will need to spend to cover your expenses.

The second part is going back and reporting what you actually spent, not just what you expected to spend. It’s this stage that newly self-employed therapists often forget.

Keeping a record of the expenses you actually incurred versus what you expected to incur will help you, with practice, create more accurate budgets. It can also help you spot trends in spending that affect your practice’s cash flow.

To help plan and track expenses, try out our budget template for therapy practices.

6. Neglecting the benefits of a business credit card

If you’ve found it stressful in the past to manage your spending and pay down debt on a personal credit card, you may worry that getting a business card for your business could lead to more trouble.

That’s a valid point. But if you’re able to put in place strict rules for using and paying off your business credit card, and use it in an organized, intentional way, it can benefit your practice.

So long as you stay on top of payments, business credit cards offer:

  • Perks in the form of point programs that can reduce business expenses
  • Cashback for certain business expenses, including utilities bills and office supplies
  • The chance to build credit for yourself and your therapy practice

Even if your business credit card of choice only gives you 2% cashback on your phone bill, the savings add up over time. And if you’re planning to travel for business in the future, accumulating points for airlines and hotels can make it more affordable.

Learn more about how to choose a credit card for your therapy practice.

7. Not bothering to generate financial reports

Financial reports take information about how your practice spends and earns money and summarizes it in a format that helps you make business decisions.

If you use accounting software, it can generate reports for you—although you need to be sure entries in your general ledger are accurate for the reports to be accurate as well.

If you work with a bookkeeper or a service like Heard, you’ll not only get regular financial reports for your practice, but your general ledger is guaranteed to be accurate.

There are three main types of financial reports:

  • The profit and loss statement (or the P&L) tells you how much money you’ve earned and how much you’ve spent during a particular reporting period (typically one month or one quarter).

  • The balance sheet tells you your assets (how much you have) and your liabilities (how much you owe), up to a certain date

  • The cash flow statement is only necessary if you use the accrual accounting method. It adjusts your P&L so you can see how much of what you earned over a particular period was cash and how much was credit.

Combined, these statements tell you how money is entering and leaving your business, and how much you have to work with. They’re essential for accurately filing your taxes.

Many newly self-employed therapists simply track their income and expenses on an ad hoc basis throughout the year, then bring the information to an accountant who compiles it all, creates a year-end P&L, and uses it to file their taxes.

Not only does this approach increase your accounting bill, it leaves you in the dark as to how your practice is performing. As a result, it’s hard to make important financial decisions like setting your fees, deciding how many clients to work on, and budgeting for expenses.

The sooner you set up a bookkeeping solution and start using financial statements, the sooner your practice benefits.

8. Failing to digitize and organize their records

Receipts for deductible expenses are one of the most important—and most common—financial records therapy practice owners need to keep. 

Many receipts—such as those for utilities and subscriptions—arrive in digital format. Others—such as those for office supplies, or vehicle mileage when you travel for business—are paper.

Whatever format your receipts arrive in, it’s essential you keep digital copies and make sure they’re organized. Paper is a fragile medium. It’s easy to lose or damage. Digitized receipts, on the other hand, can be uploaded to the cloud or stored on external harddrives. That makes them both easy to protect from damage or loss, and easier to share with your bookkeeper or your team at Heard.

Tools like Expensify allow you to photograph your receipts and store them in the cloud. And Heard features an option to upload photographs of receipts to your account.

Other records best saved in a secure digital format:

  • Past tax returns 
  • Invoices from contractors
  • Financial reports 
  • Budgets

Try to keep these records organized with a filing system, not just dumped into a cloud folder or onto a thumb drive. You’ll thank yourself at tax time.

9. Doing it all on their own

There’s a good chance you became a therapist because you wanted to help people, not because you wanted to do your own bookkeeping and accounting.

Doing your own bookkeeping (tracking income and expenses) and accounting (generating financial statements and filing taxes) both eat up a significant amount of time. In fact, the less familiar you already are with standard bookkeeping and accounting practices—the steeper the learning curve you face—the more time you should expect to devote to them.

On top of that, the DIY approach can lead to serious errors filing and paying your taxes and tracking your practice’s performance. That applies even if you use accounting software.

The best way to ensure your bookkeeping and accounting are accurate, error-free, and handled in a timely fashion is to hire professional help. Learn more about what bookkeepers, accountants, and other financial professionals do, and how they can help your practice succeed.

When you use Heard, you avoid every mistake on this list. Here’s how Heard works.

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.

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


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