Launching your own private practice means new and exciting possibilities for yourself, your business model and your potential clients. But what about the more mundane realities, such as hiring a bookkeeper to handle your day-to-day bookkeeping needs? And how do you go about finding someone you can trust with those crucial responsibilities that will support your eventual accounting needs? And what’s the difference between a bookkeeper and an accountant anyway?
Hiring a bookkeeper will be one of the top decisions you make when you launch your new private practice.
Having a responsive, reliable and resourceful bookkeeper you can bank on to tell you where the money is coming and going will be just as important to your private practice as handling the evolving demands of your client base. A bookkeeper will play a key role in understanding the direction your new business is headed.
Bookkeepers provide the crucial services needed to keep your business running. Among their many responsibilities are:
The person or entity you entrust with all of this required data and knowledge will play a large role in determining your private practice’s financial success and sustainability. They will help you track your clientele and overall business flow, keep tabs on your workload profitability and manage your financial records to ensure they are in compliance with tax laws and regulations.
In short, bookkeepers help your business run as you run your business.
You’ve probably heard the phrase before, “Time is Money.” Running your private practice will undoubtedly key you in to specifically how much money your time is worth, especially in regard to bookkeeping. Let’s start with the concept of doing your own bookkeeping.
Hiring a full time bookkeeping firm can cost anywhere from $150 to $400 a month, depending on the size and complexity of your private practice and the number of monthly transactions. On average, a clinician can anticipate spending 60-80 hours a year managing their own bookkeeping. With your private practice, you will also factor in the additional work required to maintain compliance when dealing with insurance companies and understanding tax laws.
While doing this on your own to start can help cut costs in the interim, as your business grows, so will your time commitments. Any time spent handling financial records will cut into your regular schedule, which will affect your potential profit margins.
That’s time and money you can’t afford to lose.
It’s important to note that bookkeepers are there for the day-to-day grind, as opposed to accountants, who will use the data provided by a bookkeeper to fulfill a number of other financial duties. While you will definitely want to consider hiring a bookkeeper when you launch your private practice to be on board from the jump, you may employ an accountant a little further down the road to handle specific duties, such as filing and managing taxes, budget planning, setting up payroll, cost-cutting consultation and developing business structures and expansion.
Accountants can also be a resource to help a new practice ensure they are maximizing their potential, be it through tax planning and benefits or growth management, among other things. Again, accountants will utilize your bookkeeper’s records to offer support in these critical business developments.
Now that we know the important role bookkeepers play in launching a private practice, as well as how that role differs from that of an accountant, it’s a good idea to get an understanding of the tools that bookkeepers use to manage a private practice’s financial overview and provide accurate accounting data.
There are a number of software tools available, some of which are industry professional standards and some of which are intended for individual consumer use and marketed to the general public. They include:
Quickbooks: This is an accounting software package developed and marketed by Intuit. Released in 1983, QuickBooks products are geared mainly toward small and medium-sized businesses and offer on-premises accounting applications as well as cloud-based versions that accept business payments, manage and pay bills, and payroll functions.
Xero: This is software as a service, meaning it’s a software licensing and delivery model licensed on a subscription basis and centrally hosted. It handles Accounts receivable, accounts payable, a Double-entry bookkeeping system, Small Business Accounting, Multi-currency, automatic bank feeds, standard business reporting, management reporting, fixed asset depreciation, payroll, inventory items, and expense management.
Synkbooks: This is relatively new software aimed specifically at small businesses and startups. It offers simplified bookkeeping developed by tax attorneys and professionals to provide a convenient, plug and play bookkeeping solution. It also offers an easy to use transaction categorization tool, AI assistance, the ability to import bank and credit card transactions with unlimited expense entries, and functions to generate, view and export multiple bookkeeping reports.
While the aforementioned products are fine for general business bookkeeping, they may not be the most comprehensive solutions for clinicians who need specific systems for their private practice. That’s why we created Ease.
Ease provides a simple, all-in-one financial operations platform for new private practices. It helps clinicians build new private practices from the ground up.
Ease bookkeeping will reduce time spent on financial records work while helping clinicians make informed financial decisions. Ease bookkeeping helps clinicians avoid scrambling for records before the tax deadline. With Ease, a private practice can take control of its bookkeeping without having to hire more people.
Ease bookkeeping provides accurate, detailed books every month to help clinicians run their private practice with a clear financial picture. The automated bookkeeping and timely reporting features are built specifically to support private practices.
A dedicated Ease bookkeeping expert will get clinicians onboarded. They will study the ins and outs of a private practice’s finances and partner with them as it grows.
Understanding the role a bookkeeper plays in launching a new private practice is one of the first steps clinicians will take on the path to professional independence. It’s important to compare those needs and the amount of time, focus and energy it takes to manage bookkeeping against a practitioner's workload capacity.
Starting a new private practice is an exciting challenge that will pay off in the long run. Making the right choice with your bookkeeping will ultimately determine the bottomline sum of that payoff.