Outsourced Bookkeeping for Therapists: Is It Right for You?

Should I even be doing my Bookkeeping?

The Honest Checklist: If you check two or more of these, you’re wasting time or money:

• You spend more than 2 hours a week tracking income/expenses
• You guess your quarterly taxes (or avoid them)
• You’re not using any bookkeeping software right now
• You avoid looking at your numbers because it stresses you out

You Google “how to do bookkeeping for therapists” more than once a month

If this is you, outsourcing is the answer.

Whether you’re a self-employed therapist, a sole proprietor, or running a small therapy company, this guide will help you understand what bookkeeping is, why it’s crucial for your practice, and how to approach it in a way that respects your unique compliance and privacy needs.

Let’s look at how outsourced bookkeeping works, what it includes, and whether it’s right for your therapy practice.

What Is Bookkeeping (and Why Does It Matter for Therapists)?

Bookkeeping is the process of organizing, classifying, and maintaining a business’s financial records​. In a therapy practice, bookkeeping means recording all your income (like session fees, insurance reimbursements, consulting or speaking fees) and expenses (rent, supplies, software subscriptions, etc.) so you have an accurate picture of your finances.

Essentially, bookkeeping provides the backbone for financial stability in your practice. It ensures you’re tracking every dollar coming in and going out, which is vital for compliance with laws and for making informed decisions.

For therapists, good bookkeeping isn’t just an administrative formality. It’s important for several reasons:

Tax Compliance

Accurate records ensure you report income and expenses correctly on your taxes and can substantiate deductions. Maintaining organized books year-round means therapist tax preparation becomes much easier when tax season arrives, with fewer last-minute scrambles.

Business Health

The transparency of a well-kept bookkeeping system lets you see if your practice is profitable and where your money is going​. As a practice owner, you need to know how much you’ve earned and spent at any given time​. This helps with budgeting and financial decisions, like whether you can afford to hire a receptionist or invest in a new training program.

Growth and Decision-Making

With accurate financial reports (like profit and loss statements), you can make informed decisions about expanding your services, setting fees, or cutting costs. You’ll feel more in control of your business when you have clear visibility into your finances​. Even solo practitioners benefit from organized books. In fact, “it’s often the smallest businesses that benefit most from having organized finances."

Stress Reduction

When your bookkeeping is under control, you avoid those nasty surprises when checking your bank balance or the panic of falling behind.

Related Resource: Hire a virtual assistant for therapists

Bookkeeping matters because it keeps your practice financially healthy and compliant.

Do Therapists Need a Bookkeeper?

Short answer: Yes.

Most therapists aren’t trained in financial management, and that’s okay. The complexity of mental health private practice finances, including insurance billing, client payments, CPD expenses, and HIPAA compliance, makes it smarter to bring in someone specializing in bookkeeping for therapists.

Whether you’re billing out-of-pocket clients or dealing with Medical reimbursements, a professional bookkeeper can keep your financial house in order.

Bookkeeping Tools for Therapists

Some of the best bookkeeping software for therapists include:

• QuickBooks Online (most popular)
• Xero (great for financial reporting)
• Zoho Books (user-friendly for small practices)
• FreshBooks (ideal for solo therapists)

Wishup’s bookkeepers have the expertise and knowledge and can work with the software you already use or help you transition to one that fits better.

Bookkeeping Checklist for Therapy Practices

No matter who handles your bookkeeping, certain tasks need to be done regularly to keep your practice’s finances in shape. Use this bookkeeping checklist as a guide:

Separate Business Finances

Open a dedicated business bank account (and credit card if needed) for your practice​. Never mix personal and business expenses. This will simplify everything else and is a must-do first step.

Track Income for Each Session or Service

Record every payment you receive. If you use an EHR or billing system, ensure those income records make it into your bookkeeping software. Include all sources: client session fees, insurance reimbursements, co-pays, no-show or late cancellation fees, any consulting or workshop income, etc.

It helps to note the date of service vs. date of payment when applicable (especially for insurance payments). This way, you can monitor accounts receivable (who owes you) and see your revenue patterns.

Save and Categorize Expenses Promptly

Keep digital or physical copies of all receipts and invoices for business purchases. For each expense, assign it to a category in your books (e.g., Office Rent, Utilities, Marketing, Therapy Supplies, Professional Development). Accounting software can automate some categorization, but you should review and correct any misclassified items at least monthly.

Reconcile Bank and Credit Card Statements Monthly

Reconciliation means making sure that the transactions in your bookkeeping system match your actual bank account and credit card statements. Do this every month. If you skip it, you might miss errors or fraudulent charges, or your books may gradually drift off from reality.

Most software makes reconciliation fairly straightforward. You tick off matching items and investigate any discrepancies. When reconciled, you know your records are complete and accurate.

Review Financial Reports Monthly

At least once a month, run (or ask your bookkeeper for) a Profit & Loss statement (income statement) and review it. Look at your revenue, expenses, and profit for the month and year-to-date.

Also, review your cash flow. Did your bank balance grow or shrink? If your software tracks a balance sheet, glance at that too (it will show how much cash you have, total assets, liabilities like loans or credit card balances, etc.).

Regular review helps you catch any unusual items (like an expense that seems too high) and keeps you informed about your practice’s performance​. Don’t wait until year-end; by then, it’s too late to course-correct.

Set Aside Money for Taxes

If you’re self-employed, you should be paying quarterly estimated taxes. Use your bookkeeping data to estimate your profit each quarter and set aside the appropriate percentage for taxes (often 20-30% of profit, depending on your tax bracket and state).

Pay your quarterly taxes on time​ to avoid penalties. A good practice is to transfer your tax money into a separate savings sub-account each month so you’re not caught short when tax bills come due.

Back-Up and Secure Financial Data

Ensure your financial records are securely stored. If you use cloud software, this is largely handled, but make sure to use strong passwords and two-factor authentication to protect access. If you keep any files on your computer, back them up (using an encrypted drive or secure cloud storage).

This is part of being HIPAA-conscious, too. Keep data safe from breaches. Also, limit who has access: if you have an assistant, only give them the permissions necessary for their role.

Maintain Compliance Documents

Keep copies of any important documents like business licenses, IRS EIN confirmation, sales tax permits (if any), and, of course, any signed Business Associate Agreements with your bookkeeper or software services. Also, retain records of your continuing education and license renewals (some of these fees are tax-deductible, too). Having these in one place (a physical folder or a digital folder) will make life easier if you ever need to produce them.

Engage a Professional for Oversight

If you’re DIYing, consider having an accountant or bookkeeper periodically review your books (for example, quarterly or annually) to catch mistakes early. If you outsource, schedule a check-in to go over the reports and ask questions. The idea is to not operate in a vacuum. Get expert eyes on your finances so you’re confident everything is on track.

Prepare for Year-End and taxes

Throughout the year, keep your bookkeeping up to date so that when December 31 rolls around, you can generate annual reports swiftly. Create a tax folder for the year where you put copies of 1099 forms, receipts for any big purchases that might be depreciated, and records of any retirement contributions (if you contribute to an IRA or solo 401k, for example).

At year-end, do a final review of your profit and loss statement and make notes of anything unusual to discuss with your tax preparer. If you’ve done the steps above, tax preparation for therapists becomes much smoother, essentially just by handing over well-kept books to your CPA and letting them work their magic.

This checklist may seem long, but many tasks (like tracking income/expenses and reconciling) become second nature or are handled by software or your bookkeeper in the background. Use it as a reference to ensure all bases are covered. With these habits, you’ll stay organized, compliant, and financially sound.

The Benefits of Virtual Bookkeeping Services for Therapists

Imagine having a skilled bookkeeper who understands your therapy practice, manages your financial tasks every month, and ensures everything is compliant, all without needing an extra desk in your office. That’s what virtual bookkeeping services offer.

Here are some key benefits of outsourced bookkeeping for therapists and what to look for:

Comprehensive Financial Task Handling

A virtual bookkeeper for therapists can take over the day-to-day bookkeeping tasks that eat up your time. This includes recording all your bank and credit card transactions (categorizing each expense or payment), handling payroll if you have employees or 1099 contractors, reconciling your accounts monthly (making sure your bank statements match your bookkeeping records), and preparing essential financial reports.

You should expect a monthly profit & loss statement and balance sheet at a minimum so you can review your practice’s performance. They’ll also help with organizing for tax prep, ensuring your books are tax-ready at year-end​. By covering everything from transaction entries to producing reports, a good bookkeeper keeps your financial engine running smoothly.

Software expertise (QuickBooks, Xero, Zoho, etc.)

Virtual bookkeeping services for therapists work with modern software to streamline your bookkeeping. Most are experts in QuickBooks (the most widely used small-business accounting software)​ and Xero, and some can work with other platforms like Zoho Books, FreshBooks, or Wave.

If you already use a system, they’ll likely adapt to it; if not, they can help you set up the best bookkeeping software for your needs.

For example, setting up QuickBooks for therapists might involve creating a custom chart of accounts with categories specific to a therapy practice (like separating income from privately paid clients vs. insurance, tracking office rent, therapy supplies, etc.). Experienced virtual bookkeepers know how to do this QuickBooks setup for therapists efficiently.

The benefit to you is that you don’t have to become a software expert. Your bookkeeper will use these tools to keep your records organized and can even train you on pulling reports or using the software at a basic level if you’re interested.

No Onboarding Hassle and Flexible Terms

The best virtual bookkeeping services make it easy to get started and don’t lock you into burdensome contracts.

For example, Wishup’s service comes with no onboarding fee and can get you set up quickly, matching you with a bookkeeper within 60 minutes. We offer transparent pricing with no hidden costs. You pay a flat hourly rate, but you won’t be surprised with extra charges for asking questions or getting reports.

Also, you can reach out to your bookkeeper as often as needed (via email, chat, or calls) without hesitation.

Pre-Vetted, Qualified Professionals with Support

When outsourcing, you want assurance that the person handling your books knows what they’re doing. Reputable services pride themselves on hiring experienced, certified bookkeepers (for instance, they might be Certified Public Bookkeepers or have QuickBooks ProAdvisor certifications).

Wishup rigorously pre-vets and trains its bookkeeping virtual assistants from the start, only selecting the top 0.1% of candidates. Moreover, we have a backend QA (Quality Assurance) team that reviews the work. This means your books get an extra set of eyes to prevent errors, a safety net you wouldn’t have with a solo freelancer.

If your assigned bookkeeper is unavailable or you need a replacement, we provide a substitute quickly, so your bookkeeping never skips a beat. Essentially, you get a team’s support, not just one person. This professional oversight builds trust that your financial records are in good hands.

Monthly Reporting and Insights

It’s common for virtual bookkeepers to provide monthly reporting packages. These can include not just the raw financial statements but also a summary or commentary on key metrics.

For example, they might highlight that your revenue was 10% higher this quarter or that your expenses on office supplies spiked last month. This kind of insight transforms bookkeeping from a compliance chore into a strategic advantage for your business. You’ll be better equipped to make decisions with a knowledgeable partner explaining the numbers.

Overall, outsourcing to a virtual bookkeeping service can save you time, improve accuracy, ensure compliance, and give you greater insight into your practice’s finances without the burden of doing it all yourself.

We Do Bookkeeping for Therapists. So You Don’t Have To

Wishup is more than just a virtual bookkeeping service. We assign a dedicated, certified bookkeeper who understands your business model and your preferred tools (QuickBooks, Xero, Zoho, Freshworks).

Here’s what you get:

• Setup and clean-up of books
• Day-to-day transaction recording
• Accounts receivable and payable management
• Monthly reconciliation and reporting
• Expense tracking and categorization
• Payroll processing and support
• Dedicated account manager and customer success team
• Unlimited communication and expert advice
• No onboarding fee or hidden costs

Our team double-checks all data and provides daily end-of-day reports via our in-house employee management app.

You also get monthly meetings to review financial health and the next steps.

The bookkeeper works dedicatedly with you for the assigned hours.

Should You Outsource Bookkeeping Service for Your Therapy Practice?

If managing your books is causing stress or pulling you away from client care, it’s time to consider outsourced bookkeeping for therapists.

Wishup’s expert bookkeepers are trained in healthcare finance and committed to your practice’s success. We’ll handle the books while you handle your clients.

Your therapy practice deserves the same care you give your clients. Let Wishup help you build a financially healthy future.

Book a free consultation with us today and hire a bookkeeper for therapists in 60 minutes.