Bookkeeping and Accounting for Psychologists

As a psychologist, you can deduct a range of industry-specific expenses on your taxes. Some of these include:

• Continuing education fees: Courses, workshops, and seminars to maintain your license or further your skills.
• Professional insurance: Both malpractice and general liability insurance expenses can be deducted.
• Supplies and materials: Costs related to psychological testing materials, office supplies, and other materials necessary for your practice.
• Home office deductions: If you use a portion of your home for your psychology practice, you may be able to deduct these expenses.
• Travel expenses: If you travel for professional reasons, such as visiting clients or attending conferences, you can deduct these costs.
• Professional association dues: Membership fees for professional organizations such as the American Psychological Association.
• Advertising and marketing costs: Expenses associated with promoting your practice, including website maintenance, digital marketing, and print advertising.

Please consult with a tax professional or accountant to learn more about eligible deductions for psychologists, as this list is not exhaustive.

Managing a private psychology practice requires specific accounting practices for effective financial management. These include:

• Accounts Receivable Management: Ensuring invoices are sent out in a timely manner and following up on overdue payments is key.
• Expense Tracking: Regularly recording all business expenses will keep the practice financially healthy and ready for tax season.
• Budgeting: Creating and sticking to a budget will help manage costs and ensure that the practice remains profitable.
• Payroll Management: If the practice employs other practitioners or staff, accurate and timely payroll is a must.
• Tax Planning and Preparation: Implementing a system for tracking receipts, deductibles, and quarterly estimated tax payments can save time and prevent headaches at tax time.

Outsourcing these tasks to a professional bookkeeper can streamline these processes and allow the psychologist to focus more on their clients and less on the financial side of running a business.

Not necessarily. While some aspects of finances in a psychology clinic, like insurance reimbursements and patient payments, can be complex, a competent and experienced bookkeeper should be able to handle these tasks. However, it may be beneficial to find a bookkeeper who has experience working with healthcare providers as they might be familiar with industry-specific financial challenges. At Bench Accounting, we have a diverse team of savvy bookkeepers who have experience across various industries and can certainly help manage the financial aspects of your psychology clinic.

Nope! All bookkeeping is completed in-house.

Your bookkeeper will be your main point of contact, but at times you might hear from another member of your team. This is usually when your bookkeeper goes on vacation, is sick, or otherwise unavailable.

We handle the bookkeeping for you but sometimes we’ll need your input, especially at year-end. On average, expect to spend 15 minutes each month answering questions for your bookkeeper, or uploading supporting docs.