Do you make some of the common money-wasting mistakes? What are some quick and easy things you can start doing in order to save money for the end of the year? Are there important perks about hiring an accountant to assist you?
In this podcast episode, Whitney Owens speaks with Julie Herres about how to save money in your private practice.
Meet Julie Herres
Julie Herres is an accountant and the owner of GreenOak Accounting. The firm provides accounting, bookkeeping & tax services to private practice owners throughout the United States. Their mission is for every practice to be profitable!
Julie and her team have worked with hundreds of private practice owners, so they are uniquely positioned to be a trusted advisor to clients. Julie also hosts the Therapy For Your Money Podcast, where she talks about all things money & finance for private practice.
In This Podcast
- Common financial mistakes practice owners make
- Tips for practice owners to save money for the end of the year
- Why is it important to have an accountant?
Common financial mistakes practice owners make
1. Not saving for taxes
As soon as there’s profit in the practice, you will start paying taxes, so you can see it as a good thing. Julie’s rule of thumb is set aside 25% of your profits, what you bring home, for paying taxes.
2. Not having a separate business account
Some practice owners co-mingle their private and business accounts. With a separate business account, you can easily track income and expenses. This is the money you will need to be saving 25% on.
3. Practice owners do not pay themselves intentionally
They either do not know or do not know how much to pay themselves. They may also use business money at odd times and they end up spending a significant amount of business money on personal duties, however without that intentional pay, the amount that you have used on yourself gets lost.
4. Not having records of their finances
Julie recommends keeping business records. Track things throughout the year instead of doing everything at the end of the year. There is a lot of valuable data in small amounts.
5. Not knowing deadlines
Keeping track of what is due and when. Knowing the deadlines will save you money for not having to pay consequence-money.
Tips for practice owners to save money for the end of the year
The expenses are deducted when they happen, not in the future. Buy things that you need before you need them.
What I do want to caution is that I never want to accelerate an expense that is not needed. A deduction is not a credit. (Julie Herres)
Consider giving bonuses to employees before the end of the year
Make sure to run the bonuses in time for the current year period.
Invest in a retirement account
Think this through before the end of the year, speak with your accountant for ideas.
Consider hiring a consultant
There is an increase in hiring a consultant to assist you in expanding and investing in your business.
What we’ve noticed across our clients … is that we noticed that year over year there is about a 30% increase in income on our clients who have a coach or consultant or are working with someone and actively working on their business. (Julie Herres)
Make sure you have mileage records
If you travel for your business in any capacity, you can reimburse yourself for your millage through millage records. Keep them for your tax at the end of the year.
Take an office deduction if you meet the requirements
You can take a home office deduction to reimburse yourself for home office expenses. If you are entitled to it, take it and make sure your documentation is in order so that you can prove that your deduction is legitimate.
Top off your HSA accountant
Contributing to HSA makes it tax-free, it is definitely worth looking into.
Re-evaluate your legal entity
Check this with your accountant to see if you need to change anything for the end of the year.
Why is it important to have an accountant?
They are a trusted advisor who is going to help you with business decisions in your practice. Accountants can do the legal work so that you can focus on building your practice while they deal with the fine print. Having someone to run legal decisions through will save you time and money.
They can also assist you with keeping up with your tax deadlines. They can talk you through different scenarios and will be familiar with your business and therefore can help you make important numbers-based decisions.
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Meet Whitney Owens
Whitney is a licensed professional counselor and owns a growing group practice in Savannah, Georgia. Along with a wealth of experience managing a practice, she also has an extensive history working in a variety of clinical and religious settings, allowing her to specialize in consulting for faith-based practices and those wanting to connect with religious organizations.
Knowing the pains and difficulties surrounding building a private practice, she started this podcast to help clinicians start, grow, and scale a faith-based practice. She has learned how to start and grow a successful practice that adheres to her own faith and values. And as a private practice consultant, she has helped many clinicians do the same.
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