Explore free articles, guides, and tools developed by our experts to help you understand and manage your private practice finances.

Want to save time and money?

On average, Heard saves therapists more than 60 hours per year in financial record-keeping and over $5,000 per year in taxes. Schedule a free consult today to learn more.


Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Can Therapists Write Off Unpaid Sessions?

The phrase “writing off bad debt” gets tossed around a lot, and often newly self-employed therapists wonder whether they can deduct unpaid client bills from their taxes.

While the idea you can save on your tax bill every time a client goes AWOL is certainly appealing, the reality of writing off bad debt is more complicated than that. 

Here’s everything you need to know about writing off bad debt when you run your own therapy practice.


Are unpaid therapy sessions bad debt?

First, a definition of “bad debt.” Bad debt is any debt that has become worthless because you’re unable to collect it. Bad debt is only an issue if you use the accrual accounting method. More on that in a moment.

With accrual accounting, debt owed to your business is classified as “accounts receivable,” and listed on your balance sheet as current assets.

If you charge a client $1,000 for services you performed, you enter that transaction in the books under accounts receivable. It counts as $1,000 added to your total assets—along with cash, goods, and other items of value you hold. That applies even if the debt hasn’t been paid yet.

Suppose the client owing you $1,000 goes bankrupt, and can’t pay their bill. That $1,000 is now uncollectible, and becomes bad debt. You now have to take special steps in order to remove that $1,000 from your assets and balance your books. 

Cash vs. accrual accounting

Whether you do your own bookkeeping or have it handled by a professional, your books are handled one of two ways: with the accrual method or with the cash basis method.

How accrual accounting works

Using the accrual method, any time you charge a client a fee, you record it as income on the books. That applies even if they haven’t paid yet. 

The same goes for expenses. If a contractor sends you a bill, it’s recorded as accounts payable, and added to the liabilities on your balance sheet.

Once you receive cash in hand from the client—or pay your own bill—you complete an extra step, converting your accounts payable or accounts receivable to cash. 

Naturally, the entire process is a bit more complicated than that, but those are the fundamentals of how accrual accounting works.

How cash basis accounting works

Using cash basis accounting, you only record transactions on the books once you have cash in hand.

Meaning, you can send out one hundred bills to one hundred clients, but you don’t make a record of the money you’re owed—only the money you’re paid.

The same goes for expenses. A contractor may send you a bill, but the expense isn’t recorded on the books until the cash leaves your bank account.

Because of this, cash basis accounting does not use accounts receivable or accounts payable ledgers. 

And here’s the most important thing: if you use the cash basis method, you can’t accumulate bad debt. Since there’s no debt recorded on the books, there’s no debt that can go bad.


How to write off unpaid sessions with accrual accounting

Many small businesses prefer the cash basis method because of its simplicity. That’s particularly true of small businesses that don’t have the benefit of a bookkeeper to help them and manage the bookkeeping themselves. It’s the most popular method for therapists running their own solo practices.

However, if you do use the accrual method, and you do your own bookkeeping as well, it’s necessary to write any bad debt off the books.

Why write bad debt off the books?

When you have bad debt on the books, your financial records fail to match up with reality.

Remember, money clients owe you is recorded in accounts receivable, and appears as an asset on your balance sheet. But if that money can’t be collected, it’s worth nothing; it’s no longer an asset, and you need to correct your books in order to reflect that.

If bad debt accumulates on your books, your balance sheet will tell you your business has assets it doesn’t really have. And that can lead to cash flow troubles down the line.

How to write bad debt off the books

For a therapy practice billing its clients, bad debt in the form of unpaid bills will typically appear on the books as receivables that cannot be collected.

In that case, the amount of bad debt your business is dealing with is relatively small, so you may wish to use the “direct write-off method.”

In order to remove the bad debt from receivables, you credit your accounts receivable the amount owing, and debit a bad debt expenses account the same amount. This expense account is then paid using your revenues, directly impacting your income.

The biggest benefit of using this method is that it’s straightforward and, for most small businesses dealing with small amounts of bad debt (ie. hundreds, not thousands of dollars’ worth), it won’t seriously disrupt cash flow.

The biggest drawback is that you may end up reporting bad debt in a different accounting period (ie. year) from the one in which you charged it—meaning your receivables and payables aren’t matching for that period. For that reason, direct write-offs go against Generally Accepted Accounting Principles (GAAP).

Larger companies dealing with a significant amount of bad debt each accounting period use the allowance method to write it off. You can see a comparison of the two methods in this article from the Corporate Finance Institute.

If a client doesn’t pay for a therapy session, can I write it off my taxes?

Generally speaking, no. Any bad debt you incur in the course of running your therapy practice is unlikely to be deductible.

The bad debt deduction mostly applies to debt you acquire as part of a business deal. For instance, if you purchased debt from another business, and then found out it was uncollectible, you could write it off. 

Since bad debt you incur as a therapist is not an expense, but rather income you never earned, it can’t be deducted.

See the IRS page for the bad debt deduction for more details.

That being said, unpaid bills do reduce your total overall tax liability, since they reduce your taxable income. 

If a client pays with insurance, can I write it off?

If a client pays for a $200 session using insurance, and insurance only reimburses you $150, you may be inclined to believe you can write off the remaining $50 as bad debt.

This is not the case. The rate at which you’re reimbursed by the insurance company was agreed upon when you were paneled with them, and any difference between that amount and your advertised rate fails to qualify as either bad debt or a tax deduction.

If I offer a sliding scale, can I write off the difference when a client pays less?

Suppose you typically charge $200 per session, but offer low income clients a sliding scale rate of $40 to $60 per session. If a client pays you $50, can you write off the $150 as bad debt?

In this case, you’ll have to accept generosity as its own reward. The difference between what the client pays and what you’d charge without the sliding scale does not qualify as either bad debt or a tax deduction. 

The same applies if you offer some clients special discounted rates or pro bono services.


While it’s unlikely you’re able to deduct bad debt from your taxes, there are a lot of other, more straightforward ways to lower your tax bill. Check out our complete guide to tax deductions for therapists.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her 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.

After Building a Six-Figure Private Practice, Meg Now Helps Other Therapists Do the Same

In 2021, Meg Kelly was working at a group practice as an associate-level therapist in small-town Indiana, making $30 per session before taxes were taken out. 

It was a great experience that gave her a feel for private practice, but it was incredibly financially stressful. 

“I loved the work I was doing and the autonomy I experienced while working at a group practice, but after all was said and done, I was barely bringing home enough to cover my basic expenses,” explained Meg. “It was hard to feel like I could catch up financially, which eventually led me to wanting to set up my own practice.”

How Meg set up her private practice

Once she got her independent license, she immediately made the decision to go out on her own as a full-time telehealth therapist. “I knew that I needed to take my financial health back into my own hands if my career in mental health was going to be sustainable,” she reflected. “It was the best decision I could have made for myself at the time.”

To get started, she hired a supervisor who walked her through the process and helped her get a feeling for who she wanted to work with and how much she wanted to charge. She started initially by charging $80 per session, almost 3x what she was making at the group practice.

She formed an LLC, got an EIN, NPI1 and NPI2, and opened a business bank account. She initially signed up for QuickBooks to do her own bookkeeping, but realized over time that she didn’t want to spend time categorizing transactions and reconciling bank statements, which led her to find Heard. Knowing someone else had their eyes on her books and could answer questions if they came up gave her peace of mind.

During all of this, she started a podcast called Mental Status all about burnout for mental health professionals. This got her interested in provider-first policies, which is the idea you can have an ethical, high-quality, fee-for-service therapy business that’s actually supportive of your needs as a mental health counselor.

In addition to her work on the podcast, she joined a year-long, intimate business coaching program for therapists, which helped her get clear on her speciality: burnout in mental health practitioners, as well as healthcare workers and educators more broadly. 

In this group, she got weekly support from other therapists who were looking to do something different with their careers in mental health. They had regular deep dive sessions, as well as speakers and educators who provided various training on finances, marketing, anti-racist practices, and more.

Through these experiences, Meg gained more confidence in her practice and her ability to build a sustainable business. She was charging fees that felt good and setting hours that felt better for managing burnout and creating a greater sense of balance.

In making those changes, she saw her own burnout go from a 9/10 to a 3/10, and she started getting more active in outside interests such as Crossfit, Yoga, and creative writing.

During her first year in business as a private practice therapist, she also created an Instagram page called the @antiworktherapist that started as a place to air her grievances about the “mental health industrial complex.” She gained 15,000 followers in the first year.

After a year of facilitating conversations and advocating for changes in the mental health field via Instagram, she launched a consulting business to guide new private practitioners and help them avoid the stumbling blocks she faced when she first started her business. 

“It’s been such a fun—and wild—ride,” Meg laughed. “I made my fair share of mistakes in that first year and have learned a lot, and I’m so excited to be branching out into a space where I can help first-time private practice therapists grow a business that they love.”

How much Meg made in her first year of private practice

Megan recently shared a financial breakdown of her first year in private practice on LinkedIn

In 2022, her first full year as a business owner, her private practice grossed $131,000. This includes income from self-pay therapy clients, insurance-based therapy clients, and freelance therapeutic/therapy-related content creation.

Her expenses were around $15,000, with nearly $10,000 of that going toward professional consultation and coaching. About $30,000 went toward taxes, with expert guidance from Heard.

“If I interpreted success on income numbers alone, last year was stellar,” Megan said. “And truly, in many ways, it was. However, gross income tells only one part of the overall story of a business.”

Other measures of her success include:

  • She reduced her clinical days from 5 to 3, and 1:1 client hours from 28+ to 15, giving her more and higher-quality time to dedicate to each client and their care
  • The number of times she wanted to “rage-quit” because running a business is hard (~1,000) and the number of times she chose to keep going (~1,001)
  • The number of hours spent receiving support for her business in a professional coaching container (~60 hours)
  • The number of vacation days she took (~30), including a two-week international trip and a full holiday break
  • The number of mentor-mentee connections she worked toward facilitating (~100) through her consultation business

According to her LinkedIn post, she also enjoyed some wonderful personal successes:

  • She attended 4-5 Crossfit classes nearly every week for a full year and can now complete 10 burpees in a row without stopping
  • She re-started personal therapy and couples therapy
  • She finally found an anxiety med that works for her
  • She signed up to run a half marathon in June 2023
  • She started teaching yoga at her Crossfit gym
  • She went to an outdoor music festival for the first time in years

Celebrate your successes

Meg talks a lot about how running a business is hard work, because it can be. “And yet, there is real benefit in stepping back and acknowledging that it isn't all crap,” Meg said.

It’s important, she continued, to know that, “in fact, much of it can be very, very good, and that the days where things feel heavy might just be a normal part of the ups and downs of going your own way.”

One of her favorite parts of coaching other therapists and coaches is to point out and celebrate the successes that they'd just as easily sweep under the rug, minimize, or otherwise dismiss as being not "big enough" or "important enough."

“It’s vital that you sing your own praises, and invite others to sing your praises as well,” Meg encouraged. “The road is long and it’s important to keep your perspective wide, which includes looking at all of the things that are going well and not minimizing it. That can make all the difference in the world when you’re going out on your own.”


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.

Megan Kelly, MA, LMHC is a mental health therapist in the state of Indiana and a business coach for therapists. She made six figures as a therapist in her first year of private practice and helps other therapists learn how to do the same. She runs the popular Instagram account @antiworktherapist. You can find her at www.lykkecounseling.com or www.informercoaching.com.

Woman looking over paperwork, calculator, and a tablet

What Therapists Need to Know About Deducting Health Insurance Premiums

If you’re a self-employed therapist, you’re on the line for your own medical insurance premiums. The good news is that they’re tax deductible.

While you may not enjoy health coverage from an employer’s benefits package, you can offset the cost of health insurance by reporting it on your tax return. Technically, it’s an adjustment to your gross income, not a deduction—but it still lowers your tax bill (also known as your “tax liability”).

Here’s everything you need to know about deducting health insurance premiums when you’re a therapist.


Can self-employed therapists deduct health insurance premiums on their tax returns?

As a self-employed therapist, you can report the cost of health insurance premiums you pay on your tax return, and it will lower your tax bill. 

But it isn’t technically a deduction—it’s an adjustment to gross income, which is reported on a different part of your tax return.

Adjustments to gross income used to be called “above the line deductions” because they appeared on the first page of Form 1040. The tax forms changed in 2017, so “above the line” isn’t really accurate, but some people still use the term. For the sake of brevity, this article sometimes refers to the health insurance premium adjustment as a “deduction.”

A quick breakdown:

  • Itemized expenses or the standard deduction are personal deductions, and available to all taxpayers. You claim them on Schedule A of Form 1040.
  • Business expenses can only be deducted by those who report self-employment income. They’re reported on Schedule C of Form 1040.
  • Adjustments to gross income reduce your gross income, and only specific expenses apply. After they’ve been applied, other deductions come into effect. 

Considered as a whole, adjustments to gross income encompass a grab bag of expenses,  including (but not limited to):

  • Student loan interest
  • Moving expenses for members of the armed forces
  • IRA contributions
  • Educator expenses
  • Tuition and education fees
  • Certain self-employment expenses, including health insurance premiums

Before you go and list health insurance premiums on your tax return, however, it’s important to make sure you qualify for the deduction.

Who qualifies for the health insurance premium deduction?

To qualify for the health insurance premium deduction, you must:

  • Pay your own health insurance premiums
  • Earn self-employment income
  • Have no access to any other health insurance coverage (e.g. from an employer or your spouse’s employer)

The cost of health insurance premiums is calculated on a month-by-month basis. That’s important if, during the course of the year, you go from being employed by someone else (who provides health insurance) to becoming self-employed (and paying your own insurance premium).

Example: You worked for another therapy practice for the first three months of the year, and received health insurance coverage from them. In April, you quit the job and became self-employed. At the same time that you lost health insurance coverage from your employer, you started paying your own health insurance premiums as a self-employed person. When calculating your health insurance premium expense on your taxes, you’ll add up the premiums you paid from April through December (nine months). You will not include premiums for the three months when you were employed.

Deducting health insurance premiums for spouses and children

If you pay health insurance premiums for your spouses and children, you can deduct the cost at the same time you deduct your health insurance premiums as a self-employed person.

For your spouse to qualify, they must not have access to health insurance coverage from an employer or any other institution.

For your child to qualify, they must be under the age of 27 at the end of the tax year for which you’re making the deduction. They do not need to be your dependent. Like your spouse, they must not have access to health insurance coverage from an employer or any other institution. Note that student unions typically offer members health insurance coverage.


How to claim the health insurance premium deduction on your tax return as a therapist

To claim health insurance premiums, include Schedule 1, Additional Income and Adjustments to Income, with Form 1040 when you file your taxes. 

You list the total cost of health insurance premiums for the year on Line 17 (Section II).

Your total adjustments to income on Schedule 1 are totaled on Line 26. You report this amount on Line 10 of Form 1040. It’s subtracted from Line 9 (your total income) to get your adjusted gross income (Line 11).

If this is your first time filing taxes as a self-employed therapist, it’s highly recommended you hire an accountant to help you. Not only will they help you avoid making errors, but they may be able to identify more ways you can reduce your tax burden.

Deducting long term care as a self-employed therapist

If you pay insurance premiums for long term care—either for yourself, your spouse, or your child—you can write it off on Schedule 1 of Form 1040 in addition to regular health insurance premiums.

However, there’s a limit to how much you can deduct each year. The amount changes from one tax year to the next. Check the IRS page for eligible long term care premium limits to see the amounts year-by-year.

Deducting health insurance premiums vs. medical expenses

In addition to health insurance premiums, you can deduct the cost of medical care not covered by insurance. However, this is a separate deduction, and reported on Schedule A of Form 1040.

To get technical (again), the health insurance premium deduction isn’t really a deduction—it’s an adjustment to your gross income. The cost of other medical expenses, however, is a deduction, and listed along with other itemized deductions on Schedule A.

You don’t need to be self-employed to deduct medical expenses, but since this is an itemized deduction, it’s only available so long as you do not claim the standard deduction.

One important limit to the deduction: It only applies to medical expenses in excess of 7.5% of your adjusted gross income (AGI).

Example: Your AGI is $100,000. You paid $10,000 in medical expenses over the course of the year. Since 7.5% of $100,000 is $7,500, you may deduct only $2,500 in medical expenses on your tax return (since $10,000 - 7,500 = $2,500).

The IRS page for Topic No. 502, Medical and Dental Expenses, lists expenses covered by this deduction, and provides more details on claiming it.


For a deeper dive into business tax deductions, check out our complete list of tax deductions for therapists.

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.

Woman eating at a restaurant and talking on her cell phone

What Therapists Need to Know About Deducting Business Meals

Many self-employed therapists could reduce their tax bill by deducting business meal expenses, but they don’t.

For those new—and not-so-new—to self employment, the prospect of running afoul of the IRS is just too intimidating. As a result, they’re wary of claiming deductions like the business meals expense.

Here’s what you need to know so you can start to take advantage of the business meals deduction on your next tax return, while avoiding trouble with tax authorities. 


What is a deductible business expense for therapists?

If you’re already familiar with deductible business expenses for therapists, you can skip ahead to the next section on the business meal expense. Otherwise, keep reading for a quick rundown on what deductible expenses are and how they’re typically listed on tax returns.

Ordinary and necessary business expenses

According to the IRS, deductible business expenses are expenses that are both “ordinary and necessary” in the course of conducting a trade or business. 

These expenses are typically deductible in the year they are incurred and can include items such as rent, wages, and supplies. In the words of the IRS:

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

Deductible business expenses can reduce a business's taxable income, which lowers the amount of taxes owed.

Deductible expenses vs. itemized expenses vs. the standard deduction

A lot of new business owners get mixed up when it comes to personal deductions and business deductions. It’s a common misconception that if you claim the standard deduction on your tax return, you can’t claim business expenses.

Whether you take the standard deduction or you choose to itemize your expenses, it’s reported on Schedule A of Form 1040.

Deductible business expenses, on the other hand, are reported on Schedule C of Form 1040. There is absolutely nothing stopping you from both taking the standard deduction and deducting business expenses. You can learn more from our article on tax deductions for therapists.

What is the business meals deduction for therapists?

The Tax Cuts and Jobs Act (TCJA) of 2017 muddied the waters by eliminating the business entertainment deduction. Many small business owners mistakenly took this to mean business meal deductions no longer qualified. That’s false.

So long as you’re buying a meal for business purposes, it qualifies as a tax deduction. This does not apply to pre-packaged food that you could potentially save to eat later, though.

Here are some examples specific to therapists.

Coffee or meals with business partners or co-workers

So long as you’re meeting to discuss business matters, the meal qualifies as tax deductible.

Meals for employees and contractors

If you’re hosting a lunchtime seminar for people who work for you, the cost of the meal qualifies as a tax deduction. The same goes for staff parties or other events where you supply the food.

Lunch meetings with potential clients

You’re probably not going to meet a potential one-on-one therapy client for Wing Night at a local sports bar. But if you’re meeting leads—for instance, reps from local organizations considering hiring you to present in-house workshops—the cost of the meal is tax deductible.

While traveling

If you are traveling to a destination away from work for business purposes, meals you purchase en route are tax deductible. Other meals you purchase during the trip are not. You can learn more from our complete guide to business travel deductions for therapists.


If you purchase food at an event where you could reasonably expect to meet with others in the industry, potentially growing your client list or list of business contacts, you may be able to deduct the cost. In fact, dining in at a restaurant may qualify as “networking.” Check with your accountant before claiming this deduction, however—there are a lot of variables at play.


How much is the business meals deduction for therapists?

The amount of the business meals deduction has gone through some changes. For some tax years, business meal expenses are 100% deductible. For others, they’re only 50% deductible.

For 2020 and prior tax years, business meals are 50% deductible. For 2021 and 2022, they’re 100% deductible.

The increased amount was introduced by the IRS to help offset the rising costs of meals due to inflation. Here’s a more detailed explanation from an accountant.

Where do you list business meals deductions on your tax return?

So long as your therapy practice is a pass-through entity—a sole proprietorship, general partnership, S corporation, or an LLC electing any of those statuses—you report business meal expenses on Schedule C of Form 1040.

Keeping receipts and other records for business meals

It’s essential you keep official proof of purchase for any business meals you deduct on your tax return. If the IRS discovers you’ve deducted business expenses on your tax return but you don’t have proof to back those claims up, you could be penalized. 

Some best practices:

  • Use an expense tracking app. With an app, you can scan or photograph your receipts and keep them on file, safe from damage, indefinitely.
  • Make notes for each business meal you deduct. Note the nature of the meeting or event, what was being discussed insofar as it relates to business, and who you met with.
  • Keep your receipts for at least six years. The statute of limitations on tax returns is six years. If the IRS believes you’ve committed fraud, they can audit you as far back as six years into the past. 

What happens if your business meal deduction is invalid?

If you file a tax deduction but the IRS determines you do not qualify for it, you’ll be penalized.

The penalty amount is 20% of the difference between the amount you actually paid in taxes with an invalid business deduction and the amount you should have paid, plus the full difference itself. That’s 120% total.

Using Form 8275 for protection

Form 8275 is a disclosure statement. You have the option of filing it with your tax return if you believe any of the expenses you’re deducting may be questioned by the IRS.

 The purpose of the form is to provide added information backing up your claim. Even if the IRS determines a tax deduction you claimed was not valid, the fact that you filed Form 8275 protects you from paying the penalty—the extra 20% of the difference between what you should have paid and what you did.

More accountants are beginning to recommend clients file Form 8275. The form may be particularly appropriate if you’re claiming a new or unusual deduction. 

One example: you’ve never claimed business meal expenses before, but this year you paid for catering for a staff holiday party, so you’re claiming $500. In that case, an accountant may recommend you include Form 8275 when you file your taxes.

It’s especially important to consult with an accountant before filing Form 8275, so you can be sure to avoid any major mistakes.


Looking for more ways to lower your tax bill? Check out our complete list of tax deductions for therapists.

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.

Heard Named to SMBTech 50

We are proud to announce that Heard has been selected for the 2023 SMBTech 50 list.

The list, which is powered by GGV Capital in partnership with Nasdaq, Crunchbase, and Fenwick, honors 50 startups innovating within the small and medium-sized business (SMB) tech space.

We are honored to join the SMBTech 50 alongside trailblazing companies such as Gusto, Stripe, and Deel.

Celebrating in New York City

Honorees celebrated at Nasdaq early Monday in New York City.

"SMBs are the backbone of the economy. We are so excited and grateful to be recognized in our work supporting therapist businesses at Heard," Victoria Li, co-founder and CTO of Heard, said in a statement on LinkedIn.


Therapist working at home on their finances

How to Create Space for Your Finances as a Self-Employed Therapist

On one hand, going over your therapy practice finances could provide you with valuable information and support you in feeling confident in your ability to manage your business. 

On the other hand, that process could be the reason you’re regretting going into private practice and reconsidering all your choices.

As a bookkeeper, I work with clients who see positive results with just a few changes in their routine. Because, after all, looking at your numbers is only one part of the journey (one of the very last ones, actually).

Here are a few tips to create space for your finances as a self-employed therapist.


Set up a system for your therapy practice finances

Having the necessary tools, systems, and processes for gathering your financial data is the very first step to having accurate results.

This means that even if you have a great bookkeeper or accountant by your side, the information you provide them is still necessary for the numbers to be as accurate as possible. 

Contrary to popular belief, your numbers should not be the result of “I-hand-my-statements-and-they-file-my-taxes” kind of deal. A healthy professional relationship with your accounting team thrives on collaboration and communication before expertise and knowledge. 

If you are keeping up with your bookkeeping on your own using software, remember that your software assumes you know what you’re doing. One of the biggest mistakes therapy practice owners make is believing Quickbooks will automatically categorize things for you without your input. This is far from the truth. 

Yes, automation exists and it’s massively helpful in the process, but it is not meant to replace your judgment and basic knowledge of accounting and bookkeeping. 

You’ll reap two benefits from having your basics covered. 

The first and most tangible one is the ability to access financial information with just a few clicks. This means you’ll be able to catch any mistakes, fraudulent charges, analyze your profit, be ready for tax season, and many other metrics. 

The other benefit is that this process will continually challenge you to maintain a proper and efficient workflow for your back office tasks. 

Don’t be afraid to ask your bookkeeper or accountant questions

When it comes to finances (and arguably everything in life), one of the worst feelings is to be in the dark. 

What can you do about it? Keep a “Q&A” for your bookkeeper or accountant note on your phone or computer (or any method that is easily accessible). As you run into questions about your numbers, optimizing the accounting process, or taxes, jot them down. Keep the pressure off. 

You don’t need to show this document to anyone, so don’t worry about “sounding accurate” or using accounting words. The goal is for you to know what questions to ask. 

This will prompt you to analyze your relationship with your current bookkeeper or accountant, and the value they provide to your practice. If you’re not satisfied with it, think about what values, processes, and results are important and necessary to you. Start by having a conversation with them and see if they offer what you’re looking for. 

Generally speaking, bookkeepers and accountants are interested in your well being and want to see you succeed. Don’t let the stigma make you feel like you can’t ask questions, because (again, generally speaking) we welcome those and will happily answer them for you. 

Like finding a therapist, shop around if necessary, since the services provided vary greatly between accounting firms and professionals. 


Show up with a financial goal in mind

When showing up to your money meeting or financial review session, come prepared with a few questions in mind. 

Here are a few examples:

  • What do you want to know about your numbers this specific time/day? 
  • Are you interested in wanting to know how much you’re paying your employees/contractors? 
  • How much profit did you make last month? 
  • Do you have room to pay yourself more? 
  • How much are you paying on overhead every month?
  • How much should I have in savings to cover X months worth of expenses?
  • [Insert yours here]

Don’t fall into overcomplicating this step. Sometimes, when we think that something is complicated, we unconsciously force it to be complicated for it to fit our expectations. You’ll want to start with only a few simple questions, and you can always work your way up as you feel more comfortable. 

Think of this moment as trying to connect the dots between where you currently are financially and where you want to be, and the why and what behind those totals. Or the map between your questions and the source of where the answers are in the actual software. Become familiar with clicking around and getting more detailed numbers.

Pro tip: The more data you have, the more information you’ll be able to get. As you get more comfortable with this step, add more periods of time to your financial reports. Showing up with the end in mind will guide your eyes to the right place in that long list of numbers. Without that direction, you’ll feel lost and the feeling of confusion and overwhelm will most likely sabotage this session. 

Try “habit stacking” your financial tasks

Choosing the right day and time, decluttering your space, having a nice drink/coffee, and improving your surroundings with music, candles, or anything else that makes you feel good all play an important role. The goal is for you to feel like this is a good thing. 

In other words, adjust your environment and the time you show up in a way that will have a positive impact on you, and that will make you want to come back next month. 

Have you heard of habit stacking? James Clear talks about it in his book, Atomic Habits. This principle states that by pairing a new habit with one that is already established, you will make it easier on yourself to actually get it done. 

For example, if you know that every Wednesday you sit in your car during your kids soccer practice, you can use that time to work on your bookkeeping, to sort out receipts, or generate reports. 

Similarly, if you routinely meet with a colleague, schedule “CEO time”, or any other similar activity, plan to go over your numbers right before. 

Write down what you’re learning about your finances

Did you have any aha moments while looking at your numbers? Did you end up with more questions? Take one or two minutes to write it all down! 

If you’re working with a business coach, or have learned a few business lessons that you’d like to implement, this information will likely give you some pointers as to how to make your way through those plans. You can also bring those notes to your next coaching session, or meeting with your bookkeeper or accountant. 

The purpose of this step is to help you feel like you’re having closure about this process.  Writing down results, adding them to sticky notes, brainstorming about future goals, deciding what your next move is, are all great ways to end that session. 

Think of one or two that feel right to you at that moment. Turn those thoughts into actions whenever possible and follow up next time you sit down with your numbers.

Feeling like this process has a beginning and an end will, over time, help you feel like this is actually attainable and that you are, in fact, achieving something. It will also help remove the pressure off your shoulders to mentally keep track and remember everything. 

Having a process that fits your therapy practice goals, your current needs, and that supports how you obtain your results will make it easier on you to be consistent with it. Start small, start today. 


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.

Andrea is a bookkeeper and the owner of Liquid Cents Bookkeeping. She supports women business owners who want to build wealth and whose mission is to help others. She lives with her husband and kids in South Florida.

The Complete Guide to S Corporations for Therapists

Can Therapists Write Off Unpaid Sessions?

Woman looking over paperwork, calculator, and a tablet

What Therapists Need to Know About Deducting Health Insurance Premiums

Woman eating at a restaurant and talking on her cell phone

What Therapists Need to Know About Deducting Business Meals

What Therapists Need to Know About Deducting Business Travel

How to Determine if Something is a Tax Deduction for Therapists (with Examples)

Woman shaking hands with two men at a table

The Difference Between an Accountant, Bookkeeper, CPA, and EA for Therapists

How to Choose a Retirement Plan for Your Therapy Practice

How to Track Expenses for Your Therapy Practice

7 Reasons to Hire an Accountant for Your Therapy Practice

How to Choose a Healthcare Plan for Your Therapy Practice

Black woman sitting on couch using her credit card to pay on her phone.

How to Choose a Business Credit Card for Your Therapy Practice

Why is Bookkeeping Important for Therapists?

Therapist working at home on their finances

How to Create Space for Your Finances as a Self-Employed Therapist

Woman using an ATM

How to Choose a Checking Account for Your Therapy Practice

How to Catch Up on Bookkeeping for Your Therapy Practice

Senior woman talking with participants in a group therapy session

The Complete Guide to Bookkeeping for Nonprofit Therapy Practices

Older white woman doing her bookkeeping on a laptop

Bookkeeping Basics for Group Therapy Practice Owners

The Complete Guide to Out-of-Network Billing for Therapists

Group of therapists gathered in a circle

How Much Does It Cost to Start a Group Therapy Practice?

Man in graduation cap and gown

How Much Does it Cost to Become a Licensed Therapist?

Therapy office with two chairs

How to Start a Therapy Practice

Modern interior of therapy office

How Much Does it Cost to Start a Therapy Practice?

How to Choose a Business Entity for Your Therapy Practice

Should Therapists Have a Separate Business for Other Income Streams?

The Complete List of Income Streams for Therapists

Handshake between two women at a table

How to Sell Your Therapy Practice

Person using a credit card on a laptop

HIPAA-Compliant Payment Methods for Therapists

How to Overcome Financial Anxiety as a Therapist

When to Hire an Administrative Assistant for Your Therapy Practice

Announcing the 2023 Financial State of Private Practice Report

Heard Named to SMBTech 50

Heard Partners with Guideline to Offer Retirement Plans to Therapists

Victoria Li, Co-Founder of Heard, Named to Forbes 30 Under 30

BlueVine x Heard

Heard Partners with Bluevine to Offer Business Checking to Therapists

Heard Raises $10M to Help Therapists Be Financially Independent


Subscribe to our newsletter
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Transparent plans for your practice

We offer two annual plan options for solo and group practices, billed monthly or annually.

  • Talk to an accountant who knows your practice
  • Track your practice's financial health
  • Get your federal and state income taxes done right
  • Tax-deductible and pays for itself within months
  • Quarterly and yearly reviews with a CPA
Solo Practice
Group Practice



Start for free
Billed monthly after 30 day trial
SAVE 15%!



Start for free
Billed annually after 30 day trial



Start for free
Billed monthly after 30 day trial
SAVE 15%!



Start for free
Billed annually after 30 day trial
in annual savings
*Up to 10 therapists