Healthcare business owners tend to wear a number of different hats to keep their businesses going. Many have to learn to juggle patient satisfaction, employee performance, and overall clinic success. And while most PT providers focus heavily on the clinical side of things (i.e., providing top-notch patient care), they can’t continue helping patients if they don’t keep their finances in order. With that in mind, here are seven tips to help you overcome one of the biggest struggles you may face as a physical therapy business owner: handling the accounting for your business.

Here are our top seven accounting tips to keep your PT business running smoothly:

1. Go paperless.

One of the areas where PT business owners struggle is keeping track of receipts and copies of bills paid—as if maintaining and securing patient records weren’t enough to manage. Instead of trying to keep file folders of receipts in a filing cabinet that takes up too much space, you can download a receipt scanner app on your mobile device that will help you quickly scan paper receipts. After all, having a digital copy is vitally important to streamlining your accounting process, whether you’re doing it yourself or outsourcing the work.

Also, if you receive mailed paper copies of any bills, you can contact the vendor and request an electronic bill. E-bills are great, because you can simply download and save your bills each month. For tips on how to organize electronic files—as well as information on the length of time the IRS requires you to keep certain documents—check out this small business bookkeeping guide.

Retention, Please: Why Patient Dropout is Killing Rehab Therapy Practices— and How to Stop It - Regular BannerRetention, Please: Why Patient Dropout is Killing Rehab Therapy Practices— and How to Stop It - Small Banner

2. Use an accounting software to manage your books.

There are many benefits to using accounting software to manage your books.You can easily create professional-looking invoices to bill customers, pay your bills on time like clockwork, and keep tabs on the overall health of your business by reviewing key reports.

Accounting software will also make tax time a breeze, because instead of driving over to your CPA’s office with your shoebox of receipts, you can give him or her access to your accounting data and receipts. Check out this accounting software guide to find the program that best suits your practice’s needs.

3. Set up recurring billing for repeat customers.

Because most PT facilities have repeat customers who require appointments on a weekly, monthly, or quarterly basis, it makes sense to set up recurring billing in your accounting software. This means the system will automatically create an invoice for the proper amount at the proper interval. You can choose to review all recurring bills before they are sent to your patients or simply allow your accounting software to automatically email them the invoices. This ensures that there is no delay in the invoice going out, and you can even track the status of an invoice, determine whether an invoice has been viewed, and see when a patient has submitted his or her invoice payment online.

4. Consult with a tax professional.

I think it’s worth the investment to hire a tax professional with whom you can consult year-round—not just during tax season. It would be nearly impossible for you to stay on top of all the IRS rules and regulations regarding the tax deductions for which you may be eligible. Professional tax preparers, on the other hand, know the IRS tax regs like the back of their hands. The investment you make in hiring a professional will pay off, because he or she will make sure you take every deduction you qualify for—which could lead to a lower tax bill. This will also allow you to focus more of your attention on other aspects of your physical therapy facility—like ensuring you are always providing the best possible patient experience.

5. Pay bills online.

If you’re like most people, you are probably writing fewer checks these days. I recommend that you eliminate check-writing altogether and pay all of your bills online with your bank or use a 0% business credit card to pay your bills and earn miles at the same time. If you use an accounting software program, you can connect all of your bank, credit card, and debit card accounts to your accounting software so that the transactions automatically download for you! This eliminates a ton of data entry and allows you to review these transactions on a daily—or even weekly—basis instead of waiting until you receive your bank/credit card statement at the end of the month.

6. Update your books monthly.

It is very important for you to update your books throughout the year—preferably on a monthly basis—as opposed to waiting until April 15. Keeping updated books makes it easier to do your taxes. Other benefits of regularly updating your books include:

  • Quick, anytime access to key financial information to analyze income and expenses (e.g., profit and loss report).
  • Ability to catch fraudulent activity sooner, as you’re reviewing bank/credit card transactions more often. And the sooner you notify your financial institution that something is awry, the sooner it can freeze your account and minimize the negative impact on your credit report.
  • Streamlined process for obtaining a bank loan or line of credit if you’re ever strapped for cash, as you can show up to the bank with up-to-date financial statements such as  the balance sheet, profit and loss statement, and cash flow statement.

Bottom Line

Now that we’ve shared a number of great accounting tips with you, I bet you’re probably wondering, “Where do I start?” I’d recommend starting with the receipt scanner app and working toward going paperless. The right accounting software will make your life easier and save you countless hours working on your books, leaving more time to improve the overall health of your PT business.

Jeff White is an editor at Fit Small Business, specializing in small business finance. As a JD/MBA, he has spent the majority of his career either operating small businesses (in the retail and management consulting spaces) or helping them through M&A transactions. When he is not helping small businesses, he spends his time teaching his five kids how to become entrepreneurs.

  • Retention, Please: Why Patient Dropout is Killing Rehab Therapy Practices— and How to Stop It Image

    downloadApr 24, 2018

    Retention, Please: Why Patient Dropout is Killing Rehab Therapy Practices— and How to Stop It

    Patient health is the top priority for most rehab therapists—specifically, getting patients back to a level of health that allows them to do what they love. But, when patients say “sayonara” before they reach their therapy goals, they lose the opportunity to live their fullest lives. To make matters worse, the average rehab therapy practice will lose $150,000 annually due to patient dropout alone. Talk about a one-two punch to the gut. Here at WebPT, we believe …

  • What to Expect at Ascend 2018 Image

    articleApr 3, 2018 | 3 min. read

    What to Expect at Ascend 2018

    This year, WebPT is celebrating our tenth year in business—and what better way to cap off a decade of innovation than to host the rehab industry’s premier business innovation summit in our own backyard? And who better to join us than rehab therapy’s top leaders, healers, and trailblazers? Clearly, we’re super excited for Ascend 2018 —coming to Phoenix, Arizona on September 28-29—and we hope you are, too. Last year’s event in Washington, DC was a massive hit. …

  • Ascend 2018: Our Biggest Speaker Lineup Yet Image

    articleJun 20, 2018 | 3 min. read

    Ascend 2018: Our Biggest Speaker Lineup Yet

    This year marks WebPT’s 10th anniversary of education, dedication, and innovation in the rehab therapy space—and what better way to celebrate than to put together our biggest Ascend agenda and speaker lineup yet? Rehab therapy’s best and brightest will come together this fall at Ascend—but this conference isn’t just about gleaning tons of actionable business wisdom from our superstar speakers. You’ll also have plenty of opportunities to take the floor yourself as you participate in meaningful discussions …

  • 4 Keys to Keeping a Steady Cash Flow Image

    articleMay 18, 2016 | 5 min. read

    4 Keys to Keeping a Steady Cash Flow

    As a private practice clinic owner, you’re probably familiar with the cold sweat-inducing struggle to keep a steady cash flow. Claims management muck-ups, inefficient processes, staff issues, and lack of insight into your clinic’s financial health can leave you feeling like you’re riding a revenue rollercoaster. So, whether you’re trying to maximize reimbursements , combat employee theft , or optimize patient payments , these four keys to maintaining a steady cash flow will help you even out …

  • Founder Letter: 3 Ways Your Practice is Losing Money Image

    articleMay 5, 2016 | 7 min. read

    Founder Letter: 3 Ways Your Practice is Losing Money

    Much like the patients you treat, your practice can appear healthy on the outside despite significant internal issues. And when those issues are money-related, the consequences can be deadly. If your practice already is in the red, you know you’ve got some pretty serious cash flow problems. But even if you’re in the black every month, you may still be washing dollars down the drain. While there are myriad ways your practice might inadvertently be losing revenue, …

  • The State of Rehab Therapy Image

    downloadJul 14, 2017

    The State of Rehab Therapy

    To see results from our most recent industry survey, check out the 2018 State of Rehab Therapy Report. Health care is not a static industry. It’s always changing, evolving, and progressing. No healthcare provider is immune to the effects of that change, but some—including physical, occupational, and speech therapists—have felt a greater impact than others. In an effort to assess the scope of that impact—and thus, better anticipate the future needs of the rehab therapy community—WebPT conducted …

  • Common Questions from our State of Rehab Therapy Webinar Image

    articleJul 17, 2017 | 16 min. read

    Common Questions from our State of Rehab Therapy Webinar

    WebPT recently conducted an industry survey of thousands of rehab therapy professionals across a wide variety of settings, specialties, and geographic regions. Our goal: To capture an accurate snapshot of the demographics, trends, frustrations, and motivations that shape our businesses, our future outlook, and our potential for success in this environment of change. In last week’s webinar , WebPT President and Co-Founder Dr. Heidi Jannenga, PT, DPT, ATC/L, and WebPT CEO Nancy Ham shared the results of …

  • The Dos and Don’ts of Working With Insurance Companies Image

    articleJul 7, 2017 | 6 min. read

    The Dos and Don’ts of Working With Insurance Companies

    In 2016, Forbes reported that doctors spend more than 66% of their time on paperwork. And a good deal of that paper-pushing is insurance-related. There’s no denying that working with insurance companies is a challenging—yet required—part of running a rehab therapy clinic. One of the biggest hurdles in this professional relationship is negotiating contracts. Most medical professionals have at least heard a story of a nightmare negotiation that led to nothing but frustration. Ultimately, insurance companies usually …

  • The State of Rehab Therapy in 2018 Image

    webinarJun 1, 2018

    The State of Rehab Therapy in 2018

    Falling reimbursements. Skyrocketing insurance premiums and copays. Crippling student loan debt. As a PT, OT, or SLP, sometimes it feels like it’s you against the world. After all, the challenges you face on a daily basis are many and complex. But, you’re not alone. In fact, we recently surveyed nearly 7,000 rehab therapy professionals on everything from payment rates and clinic budgets to education costs and salary, and we found some pretty strong—and surprising—trends. [video://]   Curious …

Achieve greatness in practice with the ultimate EMR for PTs, OTs, and SLPs.