How To Be Better with Your Money In Private Practice with Andrew Riesen | POP 728

A photo of Andrew Riesen is captured. He is a mission-driven entrepreneur, financial accountant and the CEO of Heard, the financial back-office for therapists in private practice. Andrew is featured on the Practice of the Practice, a therapist podcast.

Which mistakes do most therapists in private practice make when it comes to money? Should you set money aside for taxes or not? Do you want easy access to an experienced accountant whenever a question comes up?

In this podcast episode, Joe Sanok speaks about how to be better with your money in private practice with Andrew Riesen.

Podcast Sponsor: Pillars of Practice

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Meet Andrew Riesen

A photo of Andrew Riesen is captured. He is a mission-driven entrepreneur, financial accountant and the CEO of Heard, the financial back-office for therapists in private practice. Andrew is featured on the Practice of the Practice, a therapist podcast.

Andrew Riesen is a mission-driven entrepreneur, financial accountant, and CEO of Heard, the financial back-office for therapists in private practice. Prior to Heard, Andrew worked at PricewaterhouseCoopers, where he worked as a financial accountant, helped build an internal software incubator, and co-founded an affordable sales tax solution for small to medium-sized businesses.

When not supporting mental health professionals in private practice, Andrew can be found exploring the nooks and crannies of the Pacific Northwest trail-running, cycling, or snowboarding, or at home with his nose in a book or journal.

Visit Heard and connect on Facebook, Instagram, Twitter, and LinkedIn.

Visit Andrew’s webpage and connect on LinkedIn.

In This Podcast

  • S Corp or not?
  • Why you should separate your finances
  • Yes, put money aside for taxes
  • Work directly with an accountant through Heard

S Corp or not?

Many new practice owners are encouraged to set up their practice as an S Corp soon after launching it. However, this may not be a good idea.

Often within your first year of practice, that is probably not the right place to set up your S Corporation for the first time. (Andrew Riesen)

Filing your business as an S Corp:

  • Has an administrative burden associated with it
  • Has an additional cost
  • There is already a lot to take on within your first year of private practice, and filing your new business as an S Corp so soon may impact your financial success.

I think it often ends up being more cumbersome and challenging than providers anticipate, and so our typical recommendation is to see how the first year shakes out, ensure that you’re setting enough money aside for taxes, and then deciding once you have a clearer picture as to what the practice will look like. (Andrew Riesen)

It is a good idea to separate your business as its entity from you. You can do this for your first year by:

  • Setting up a separate tax ID
  • Separating your business bank account
  • Having your business associated with a different tax ID

Why you should separate your finances

To properly manage and organize the finances within your practice, ensure that there is a separation between your business expenses and your expenses.

Follow the Profit First principle of paying yourself a little first, and automating expenses to be paid into their relevant bank accounts so that responsibility does not fall on your shoulders, and is not at risk of human error.

Yes, put money aside for taxes

Preparing and filing the taxes: this is where the financial separation becomes helpful because you can easily distinguish between business and personal expenses and file your tax accordingly.

Our stance specifically at Heard is quite clear … if you have a tax liability over a certain dollar amount – which is a pretty low threshold – you should be setting aside money and paying taxes within that first year. (Andrew Riesen)

Work directly with an accountant through Heard

By working with Heard, you get to work directly with an accountant to help you organize and manage the money in your private practice.

One of the benefits of working with us is that you have an accountant on the backend that’s there to support you, that’s meeting with you throughout the year, and that’s there to answer any questions that are coming up. (Andrew Riesen)

By working directly with someone knowledgeable and experienced, you can drive efficiency in your business finances, which at the end of the day saves you time, energy, and money.

Useful Links mentioned in this episode:

Check out these additional resources:

Meet Joe Sanok

A photo of Joe Sanok is displayed. Joe, private practice consultant, offers helpful advice for group practice owners to grow their private practice. His therapist podcast, Practice of the Practice, offers this advice.

Joe Sanok helps counselors to create thriving practices that are the envy of other counselors. He has helped counselors to grow their businesses by 50-500% and is proud of all the private practice owners that are growing their income, influence, and impact on the world. Click here to explore consulting with Joe.

Thanks For Listening!

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