10 Best Accounting Software for Therapists in 2025

These criteria apply to many therapy practices, so they were taken into account when preparing the list of accounting software options below. It’s up to you to make sure you understand the fundamentals of making bookkeeping entries and generating financial reports. Using software is no substitute for hiring a qualified bookkeeper or accountant. Accounting software can be a huge asset for your therapy practice, assets = liabilities + equity giving you the tools and information you need to track the financial health of your business and prepare for tax season.

Features Tailored for Therapists

This includes client payments, insurance reimbursements, and other forms of business income. Use accounting software or practice management software with robust features, like direct integration with payment processors, to streamline this process. Staying on top of income ensures you’re ready for quarterly taxes and have accurate records for financial reporting. FreshBooks stands out for its time-tracking feature, which is particularly beneficial for therapists who bill hourly. The platform allows you to log billable hours directly into client profiles, ensuring accurate invoicing and integration with other financial data. FreshBooks includes expense tracking with receipt capture, helping therapists stay organized and prepared for tax season.

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Its multi-user support enables small group practices to grant access to team members or external accountants securely for seamless collaboration. FreshBooks is designed to evolve with growing practices, offering various pricing plans. For private practice owners, bookkeeping is essential to keep your finances in order, stay compliant with legal regulations, and maintain financial stability. Therapists face unique challenges, such as managing client billing, handling insurance reimbursements, and tracking business expenses like office rent and therapy tools. By mastering bookkeeping basics, you’ll gain valuable insights into your practice’s financial health and ensure its long-term success. To stay organized, set up a chart of accounts in your accounting software.

Get 2 Months of Bookkeeping for Free!

You got into private practice therapy so you could help others, not spend your time poring over the books. No one expects you to double as an accountant because, as a therapist, your primary responsibility is to run your practice and help your clients. But with the right tools, managing your practice’s finances doesn’t have to be a burden. The software options discussed above can make the tedious task of manual bookkeeping much easier. Just as maintaining patient confidentiality is crucial in therapy, HIPAA compliance is essential in your bookkeeping. For private practice owners, this means more than safeguarding clinical data—it requires careful handling of financial records to prevent any accidental exposure of patient information.

• At the end of the year, you generate a P&L, a balance sheet, and a cash flow statement (if necessary) for the entire 12 month period.
• Every transaction on the books is entered once as a debit or credit and again as a debit or credit.
• It’s up to you to make sure you understand the fundamentals of making bookkeeping entries and generating financial reports.
• The platform supports electronic claims filing and automatically calculates client co-pays and deductibles, reducing the administrative burden of managing insurance reimbursements.
• Other solutions, like Heard, automatically generate up-to-the-minute statements based on the latest data in your general ledger.
• We know what to look out for and how to steer you in a more profitable direction from the get go.

It depends on your different types of income and expenses, and the information you need to record. Accounting software’s biggest benefit is that, in most cases, it can automatically import transactions from your bank account. Every time you earn income or spend money on business expenses, the transaction appears in your general ledger. Accounting software is no replacement for human bookkeepers and accountants.

Hire a bookkeeping service for therapists

Then closer to the end of the year, touch base with your accountant or tax professional. Common tax-deductible expenses for therapists are professional https://www.bookstime.com/ development, liability insurance, office rent, utilities, therapy supplies, software subscriptions, and mileage for business travel. Keeping detailed records ensures that you are maximizing these deductions legally.

Our remote bookkeeping services are tailored to fit the specific needs of therapists. We handle the nitty-gritty of financial bookkeeping for therapist management, from providing detailed financial reports to managing invoices and ensuring accurate categorization of all transactions. This is a necessity because, to build trust with clients, stakeholders, or business partners, you need financial disclosure.

• Modern bookkeeping software for therapists can help make financial management easier and more accurate.
• Another aspect of running a sustainable practice is keeping accurate financial records through proper recordkeeping.
• It doesn’t matter whether the money has actually entered or left your bank account.
• The first step in paying yourself involves setting an appropriate salary that reflects both your budget and industry standards.
• If you’re doing your own bookkeeping, you may want to label each account on your chart of accounts with the type of financial statement it appears on.
• Wave’s accessibility and free core features make it a practical and appealing option for therapists just starting out or those operating on a tight budget.

To see the total amount you earned as profit (revenue minus expenses) over a particular period, you generate a profit & loss statement (covered below). Every transaction on the books is entered once as a debit or credit and again as a debit or credit. As long as the debit and the credit for a transaction are equal, you’re good.

• That’s because buyers and investors want to see that your practice is profitable.
• When you first join Heard, your bookkeeping team will complete your catch up bookkeeping for the current tax year.
• Meticulous bookkeeping also ensures that you pay taxes based on accurate information and are always in excellent standing with the tax authorities.
• You categorize each item in your general ledger according to whether it is income or an expense, and sort it into an account.
• Therapists can easily send branded invoices, accept online payments, and track overdue accounts, streamlining the billing process while improving cash flow.
• But anything you use in the course of running your business is equipment.

Best Accounting Software for Therapists in 2025

• Essentials is $50 per month, includes more features, and allows access for 3 users.
• The balance sheet is one of the fundamental financial statements used by law firms to summarize their financial position at …
• While QuickBooks Online and Xero are very similar in terms of features, QuickBooks Online also trumps Xero with its customized reporting.
• Though QuickBooks may take some time to fully master, the long-term benefits—like seamless tax reporting, detailed cash flow tracking, and financial clarity—make it a worthwhile investment for your practice.
• We specialize in helping private owners like you save money for your personal and business accounts.

If other software like QuickBooks has left you feeling overwhelmed, Xero might be just what you need. You’ll also benefit from automated tax return calculations for quarterly and annual filings, streamlining tax compliance without having to juggle multiple platforms. You could save several thousand dollars and find a lot more money in your business when you’re running things better. With a dedicated accountant, you will know that everything is taken care of, including your tax services, so that you can focus on your patients.