Office Hours: Building Financial Systems For Your Therapy Practice with Andrea Rotondo

‍Michael Fulwiler [00:00:00]:

Andrea Rotondo, welcome to the show.

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Andrea Rotondo [00:00:02]:

Thank you for having me here, Michael.

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Michael Fulwiler [00:00:04]:

I'm so excited, very excited to have you for this session of office hours, we're going to dig into the topic of financial systems for therapy practice owners. So the place that I would like to start is digging into what is a financial system. So could you explain just in very basic language what a financial system is for a therapy practice?

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Andrea Rotondo [00:00:33]:

Yes, that's a great question, because financial systems feels like there's a really complex world of really complex businesses, and it doesn't really have to be the case, especially for therapy practices. And if you are just starting out, I don't want to overcomplicate things for you either. They don't have to be complicated. So basically, financial systems is just the combination of any and every tool or resource or even person that it's been included in your process of managing your money. Anything that comes in, anything that goes out and how all of that flows and the rhythm that it has, as well as how well those components match and combine with each other.

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Michael Fulwiler [00:01:21]:

I love that. I want to unpack that some more. Why is that important? Like, why should therapists even care about setting up a financial system for their practice?

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Andrea Rotondo [00:01:32]:

I would say that it is important because of the benefits that it has, as well as the risks of you not having them. So, for example, some of the benefits that it has is you as a business owner, with a therapist, with a private practice, it comes really hard to kind of even identify yourself as a business owner. So you're kind of already not involving yourself a lot in the business related tasks. And when it comes to managing that and running that aspect of your business, if you don't already have a system in place that kind of is already running, and you're aware of that, all of those pieces being combined and running, it's going to be much, much easier for you to be completely disconnected from that. And it kind of essentially removes the opportunity for you to be involved in that aspect of being a business owner, which, again, it kind of already feels a little bit foreign to you. So we want to provide that opportunity for you to get involved in there. Another benefit is that it is actually beneficial to you. It actually could bring you the sense of you're winning.

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Andrea Rotondo [00:02:49]:

You know, you're acing as you're in there, you're involved, you are aware, you are making decisions. You're not just sitting in the backseat and kind of like just watching everything play out. You are very much involved in a way that is actually beneficial to you and I. Not that it's the least important, but it's really one of those things that people don't really want to acknowledge is compliance with the IR's and any liability with taxes that you might have. It's those kind of like, yes, I know that I have to pay taxes, but knowing that the fact that you have to pay taxes doesn't necessarily move you to make an action towards that. So it's still part of those benefits. But I feel like the other ones that I just mentioned feel a little bit more beneficial and close to you as well as giving you a clear understanding of where you are financially. Right.

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Andrea Rotondo [00:03:44]:

And that kind of goes hand in hand with what I just mentioned, like you being involved in there and it being beneficial to you. That is also giving you actual data and actual numbers that you need to know where you stand financially and on the other side of it. And the risks. I would say the same thing with compliance. Not being in compliance is a huge risk that it could, it just doesn't disappear. Right. Just because you missed the deadline doesn't mean that, oh, I didn't make it. You still have to do it as late as it's going to be, you still have to do it one way or another.

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Andrea Rotondo [00:04:18]:

And the same thing would be with being disconnected, being disconnected from your therapy practice and the way that you're managing your finances. It's such a big risk because not only you're missing deadlines, you are having to do tax returns again or find somebody else that is going to do them. But then you're also kind of eliminating the opportunity for you to again connect with your numbers, make informed decisions if you want to grow your practice in the future, you meet numbers. And just overall, even for your own mental health, it's important that you have clear numbers and that you have information that is accurate in front of you to make those decisions. Rather than just going off of assumptions, which typically when it comes to finances, we tend to overestimate the amount of money that we make and then underestimate the money that we are spending. And it's just giving you a completely off picture of where you are. And then we have assumptions and, you know, just nightmares and we can go as deep as we want to when it comes to that, of not knowing. So I would say that is what was important because of the benefits that it has.

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Andrea Rotondo [00:05:33]:

And on the other side, the risks that you are, that you have for not having those in place.

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Michael Fulwiler [00:05:38]:

There's two things here that I think are really important. One is the peace of mind that you're describing. Right? Like when you have financial systems set up for your business, you have peace of mind about how much money you have, what your cash flow is, how much money you owe in taxes, right. It's not a mystery. And for a lot of therapy practice owners who don't have these systems set up, it feels really scary and stressful. And a lot of therapists come to Heard because they're in trouble. They're scared of getting in trouble with the IR's, right? Because they don't know their numbers, they don't have a sense of how their business is doing. And so I think that, and then also just the confidence of, I know how my business is doing, I know how much money I'm making, I know that I'm ready to maybe hire another therapist or maybe I'm ready to invest in marketing to grow my practice.

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Michael Fulwiler [00:06:39]:

Right. Like you can make more informed decisions. I'm curious from a perspective of the life cycle of a therapy business. So a therapist who is just starting out as a private practice owner, should they be setting up a financial system from the beginning, or can they kind of get started and then set it up along the way? What would your recommendation be for our listeners, especially folks who are maybe early on in their private practice, or maybe they haven't even started their private practice yet, and so they're starting to research and think about setting up their business. At what point do you feel like setting up financial systems is helpful?

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Andrea Rotondo [00:07:21]:

Yeah, I think that setting up financial systems, it's something that kind of already happened without even you being aware of it. You have something to receive payments. For example, your ehr, you have a bank account, you're already making payments. So in a way, a financial system is already there, is already existing. What I want you to do is even as a completely new therapy practice owner, you have not had any clients so far. I want you to now include yourself in the picture and you'll be the one to build it rather than just letting it happen organically and then kind of face the consequences of that later on. So one of the things that a financial system that is build consciously is that it should run smoothly or effortlessly and it should not be super time consuming. So when you're starting out, something as simple as choosing the right bank can go like it's going to be involved in your journey every single day.

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Andrea Rotondo [00:08:24]:

It's going to be involved in money journey in so many different areas. So even if something as basic as choosing the right bank will make a big difference. So, for example, do you typically, for some reason, banks are one of those things that you kind of feel like you have to stay, like, loyal to them. Like, I have been banking with the same bank for years and I just opened my bank account there because that's the only bank that I have, instead of thinking about all the different aspects again, of running a business and how that bank is going to be involved. So thinking about, do you even have access to an app? It's probably going to be very beneficial to have one. Can you make ACH transfers if you were to hire a contractor or if that is the case, how much that's going to be? If you're going to have an accounting software or bookkeeping software, we want that bank to connect with that software. Not all of them do. Especially older banks or smaller banks don't do a good job at staying connected, and you have to constantly connect them.

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Andrea Rotondo [00:09:29]:

And then it kind of feels defeating the whole sense of automation because you still have to be involved in the process. Another aspect of it is security. Obviously, we want that information to be secure, not only their own security systems, but also how you add a team member to it, whether it's, for example, a bookkeeper that you want to share your statements with. Does the bank provide you the ability to add your bookkeeper to that bank with read only access because you don't want to share your credentials with your bookkeeper? That's something that I see happen all the time. You want to be able to select the permissions that they have. You want to be able to track the activity that they did. How well can you share statements? For example, if you add somebody to that bank, can they obtain statements? Most likely or not? Most likely. The main role of adding your bookkeeper to your bank is going to be so that they pool statements from them.

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Andrea Rotondo [00:10:25]:

And that way you don't have to have that step. So by working with a bank that doesn't let you do that now, you just added endless tasks to your future of going to your bank, downloading it, sharing it with your bookkeeper, and it's something so simple, but it always gets overlooked. Nobody likes to do it. It takes just three minutes, but nobody wants to do that. It's annoying, it's boring. So if we can eliminate all of those things, you're already winning by choosing that bank ahead of time. In the beginning and in the beginning, in my opinion, is the best moment to do that because you don't have a lot of activity. If you're working with insurance, you don't have to, you know, tell, hey, deposit the money in this account is just one time.

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Andrea Rotondo [00:11:12]:

But if that's not you and you're already kind of like already receiving payments, today is still a good time to make that switch.

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Michael Fulwiler [00:11:19]:

Yeah. I'm really glad you're bringing this up. One of the most common questions that we get from therapists who are just starting out in private practice is do I need a separate bank account? Does it need to be a business bank account? And so just a point of clarification here for listeners is if you're taxed as a sole proprietor. So if you don't set up a formal business entity, it's okay, you can use just a separate bank account. It doesn't need to be a business bank account. Now if you do form a business entity like an LLC or professional corporation, you have the ability to open up a business bank account, which they can have better rewards and different fee structures. But just having a separate bank account is so important. Can you talk about from like a bookkeeping and record keeping perspective why it's so important to separate your business and personal finances? Like, can't you just use one bank account and then you can just, you know, manage it that way?

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Andrea Rotondo [00:12:23]:

Yes, just focusing on the bookkeeping side of things, because there's many layers to it, but just focusing on the bookkeeping side of things, whether it's you that is keeping track of your finances or if you have hired somebody like myself or like Heard of keeping it separate, meaning your business related transactions in one specific account, it's going to do the process of categorizing those things much easier than, for example, if you have your credit card and you have an Amazon expense that was for your kids birthday party, and another, you know, and that's going to be like 15 different expenses. And then you have three of those that were actually for your office. Now you have the work to go to Amazon. And for some reason, Amazon expenses are always, it just takes so much time to look at them. You have to either you do the work of splitting those out in your bank, in your bookkeeping, or having to tell your bookkeeper, hey, these twelve expenses are actually personal. These three are business. And this one was actually office supplies. This one was whatever, whatever.

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Andrea Rotondo [00:13:31]:

This one was whatever, whatever, in order to just click, categorize, categorize, categorize. There was actually a lot of homework involved before you were able to get to that conclusion. And that's funny because with bookkeeping, that's how it usually feels. Like the understanding is it's just somebody categorizing things, which technically that is correct. However, there is so much more involved prior to that and gaining information prior to that, so that the person doing those categorizations will do them properly. And in most cases, when it's things like Amazon or Target or any other story like that, we're going to need your input on that. So not only you're doing the process kind of like a favor to make it easier, but also yourself, because you're going to have much less questions to answer. And this is a month to month thing.

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Andrea Rotondo [00:14:26]:

This is not just like once a year, this is every single month. So the less questions that we have for you, the better is also for you.

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Michael Fulwiler [00:14:35]:

If you're listening and you do have one bank account and everything is combined, it's not illegal. It's going to create more work when you go to do your bookkeeping at the end of the month, or maybe you wait until the end of the year and then when you go to do your taxes, now you have to go back. I've heard stories from therapists who they wait until April and the weekend before they're going to meet with their tax preparer. They print out twelve months of bank statements and they're highlighting, which is a business expense, and they're trying to figure out, so the sooner that you can, to your point, have that bank account set up, the better. Could you talk about the other components of setting up a financial system? So bank account being one of them? We all have talked about bookkeeping a little bit. What are kind of like the components of a financial system for a therapy practice?

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Andrea Rotondo [00:15:26]:

Another aspect of your therapy practice that is going to be unique or very different than any other business is going to be that you have to stay HIPAA compliant. Right. You can't have, and this is new information for many therapy practice owners, is your accounting records should always be separate from your client records, from your billing. So your quick billing or any other accounting process that you have, it's really separate or a different thing than you billing your clients and keeping track of which client paid you and how much and who owes you, that will fall under, under the umbrella, for example, billing. So that's not really what we're talking about here. But because of that factor, then the way that you receive payments is extremely important because you don't want to break that HIPAA compliance. So that's why I think one of the most important components in your financial systems is your EHR or your, or the method that you accept payments. If you are again, receiving payments with credit card, which is the most common, you want to stay, in my opinion, in your EHR, something that is going to accept payments in a way, for example, that are transfers directly to your bank in order to cut costs without naming any names.

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Andrea Rotondo [00:16:52]:

I know you guys know what I'm talking about. They end up in your bookkeeping records, and most of them have names showing up in your bank description. So that's another thing to consider. Again, when you're building your financial systems, all of these names for my client, I am the one responsible to keep those safe. How can I do that? And thinking about all of those places where those names could end up from your hands to your accounting team. So when I receive my payment, how am I protecting that data? When that data goes to my bank account and then end up being in my bookkeeping records again, how am I protecting that data? So the component in this aspect would be your credit card processor. If you have an EHR, it has a credit card processor built in. It's HIPAA compliant.

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Andrea Rotondo [00:17:45]:

The information that ends up landing in your bank, it's just a deposit and not names of anybody. So it's much easier to keep that information secure. Your bookkeeping team doesn't have eyes on any names. Your bookkeeping records doesn't have any names stored in them. And it was easy for everybody.

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Michael Fulwiler [00:18:05]:

Often, you know, when I talk to therapists, they say, well, I use simple practice for my EHR. I bill my clients. I can look at my billing in my EHR. Why do I need bookkeeping? What I explain is, well, that's just part of your, that's just your total income. You're able to see the money that you're billing and you're making. But what you're not able to see in your EHR are your expenses. And so that's also important to be tracking. You mentioned earlier that people tend to overestimate how much money they're making, especially folks who are new to being self employed as a therapy practice owner, it tends to be pretty high margin, right? You don't have a ton of expenses, especially if you are a telehealth practice.

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Michael Fulwiler [00:18:55]:

And you may think, wow, you know, I made $100,000 this year. This is amazing. But what you're not thinking about is the expenses that you've had in addition to the taxes that you're going to have to owe as well. And so making sure that you're tracking all of that is very helpful. Some general guidance that we tend to provide therapists at Heard as it relates to their stage of business and kind of the type of help that they need. And I'm curious your perspective on this. We haven't talked about this before, so this is your kind of live reaction. What we generally tell folks is if you're brand new to private practice, say you're making less than $10,000 a year, this is in total revenue.

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Michael Fulwiler [00:19:42]:

You're probably okay with a simple spreadsheet and then doing your own taxes with turbotax. It's pretty straightforward. Pretty simple. If you're below, say, $50,000 a year in total revenue, you can use more of like a DIY bookkeeping solution that's like more than a spreadsheet, something like Quickbooks. And then working with a tax preparer that's going to help you actually prepare and file your taxes so you're not completely doing it yourself. And then if you're $50,000 and above, so more full time private practice, that's when it makes sense to work with a bookkeeper, work with a service like Heard. Really kind of more of a full service solution. And I'm curious if you agree or disagree with that just based on the type of clients that you work with as a bookkeeper, I think you have.

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Andrea Rotondo [00:20:34]:

A really good separation. The only thing that I don't like to have, for example, spreadsheets in the beginning and then you move to this, and then you move to this, is that every single time that you move to a new platform, your records are starting from scratch. For some people, that's totally fine. They don't really care for others, they do want that history to be in one place. So I would say think about that in long term, if you want to have everything in the same place, probably start with where you want to be when it comes to working with this person or working with this software, apply that today. What I think about building your systems and building in, for example, choosing an accounting software is going with the one that is going to fit where you're going to be in the future according to your own goals. Not generally speaking, what works for everybody, but what works for your vision, for your goals, for your practice, and that software that is going to work for you five years, ten years from now. Choose that one today.

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Andrea Rotondo [00:21:42]:

If you work, for example, with something like Quickbooks, you can start with the least robust features or tier today. And as you continue to grow and if you end up having to move up in features, you can just upgrade it rather than now I'm going to move to this. You can it's completely possible to bring that data, like historical data to another software. But in most cases, it's going to cost a lot of money because it's a lot of time and resources and you definitely want to hire with somebody to do that instead of doing that on your own. So it is possible, but it's also very costly, which that's why a lot of people just don't. I would say if we're talking about like spreadsheets and things like that, I would much rather you work with a spreadsheet in the very beginning than using a platform like, let's say, QuickBooks, self employed, which is basically a spreadsheet. If you want to work with a software from the get go, work with something that one, you have the ability, like I was saying, to upgrade plans as you go. And number two, that it still has some features like reconciling accounts at the end of the month, ability to tweak the chart of accounts, ability to run reports.

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Andrea Rotondo [00:23:01]:

I would say those are the three most important things to look at. So that again, if you are going to choose for a free type of or low cost software, that you're still choosing one that is going to serve you in the future rather than not. But I would say what I like about spreadsheets in the very beginning, specifically for therapy practice owners, is that it kind of gets you involved in the process, it kind of brings you in, because again, this is in most cases very new to you. So it gives you that practice. It pushes you to become uncomfortable and learn new things. However, in my experience, what I think of that is that therapy practice owners tend to feel like they have to stay stuck there because now they know how to do it. So they stay in that bootstrapping stage much longer. And in most cases, they have kind of already outgrown those spreadsheets.

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Andrea Rotondo [00:24:00]:

But because they feel familiar in a very uncomfortable area of their business now, it's much harder to let go of that. So that's another reason why I like to go for the software from the get go and just get as much involved as you can in there rather than the spreadsheet. Again, if it goes aligned with your goals, which that's something that it should be always the first conversation, do I want to keep this, you know, just like a side thing forever? Then that's not so bad. But my goal is to grow this. My goal is to have, you know, this, do this full time or a group practice, then I would just go with those more. I don't want to say better, but like a software rather than a spreadsheet from the beginning.

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Michael Fulwiler [00:24:48]:

I love that perspective. So what I shared was based on income and I use general guidelines very loosely. Right. Talking about is more forward thinking. So, you know, if you have a full time w two job and you see four to five clients on the side, probably doesn't make sense, right? To hire a bookkeeper for your four to five clients more practice. Like you can track that in a spreadsheet. But if your intention is to grow and expand and scale, then setting yourself up from the beginning to be able to do that is only going to benefit you in the long run. I also think a part of it too is how do you want to be spending your time? Some therapists enjoy looking at the numbers and being involved, and some people don't want to be involved and would rather outsource it or get help with it.

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Michael Fulwiler [00:25:46]:

I also feel like it probably depends too on how involved you want to be or not. Would you agree with that?

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Andrea Rotondo [00:25:52]:

I agree to an extent, and this is why I say that I feel like a lot of people that don't like, you know, the math and the numbers are hoping to work with somebody that they can literally say, you handle it. You just tell me what you need from me. And I think that that could be kind of dangerous, you know, when it comes to your finances, because I still want you to be involved. You're not the one tracking things, you're not categorizing things, but now that gives you the ability to look at the numbers from a different perspective. So I know that that's not exactly what you're saying, but in the mentality of the business owner, of the therapy practice owner, it's very easy to not make that distinction and say, now that I have hired somebody to help me, I don't have to do anything. That's completely false. Now you have the ability to then be even more involved, just at a higher level, like a CEO level. And again, going back to what we said initially, a lot of therapy practice owners don't even see themselves as business owners.

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Andrea Rotondo [00:26:54]:

So if you're already going to this new relationship, thinking that this is just somebody that's going to do everything that I don't like, you're already removing that opportunity for you to be involved. And in my opinion, of course, I'm super biased. I think that working with your accounting team is one of your most important relationships, that you should actually have conversation, not that I know that they're important, and I know that what they're doing is important, but actually having some sort of communication, whether it's from you to them or from them to you ultimately, so that you can take that seat of the leader of your practice and use that information to your benefit.

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Michael Fulwiler [00:27:36]:

I'm glad that you're setting this expectation because a lot of therapists who come to Heard have that expectation of I join her, it's off of my plate. I don't have to deal with it. And often, actually, it is important for the therapist to be involved, to be reviewing transactions and confirming that it is a business expense, not a personal expense. Or if their bank doesn't allow for read only access, that they're going in and uploading their statements every month and on a quarterly basis, they're reporting any income from any withholdings or w two income that is not in their books. And so I see your accounting team and your bookkeeper really as a partner. And I think that's really important that you're building this partnership with this team that's helping to support you as a business owner. And this framing of the therapy practice owner as the CEO I think is really great because as a CEO you're still meeting with your CFO and you're meeting with your accounting team and you're understanding how your business is doing on a regular basis. CEO's probably are looking at their numbers on a daily basis as a therapy practice owner, thinking of yourself as the CEO of your practice, even if you're not the one that's doing the bookkeeping and the accounting, that you're still involved, right? At a higher level.

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Andrea Rotondo [00:29:06]:

Yeah, absolutely agree. And I feel like a lot of people tend to feel that this is kind of like I'm not there yet. Like I'm not making, you know, I'm only making this dollar amount. I'm not there yet. However, this is something that the numbers themselves don't really matter. Like the numbers themselves don't dictate if you should be doing this. This is for anybody that has a business. And of course, the actual categories and the tracking, they are going to evolve and grow as your practice goes.

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Andrea Rotondo [00:29:36]:

But your involvement should be from the beginning. In fact, the beginning. And the slower or smaller, quote unquote business. Your business is in a way is better because now you have the ability to practice. You're learning new skills and it's much easier to learn those money skills when your revenue and your expenses are smaller and you have less things to look at. And as your business grows and your revenue grows, you're adjusting those skills that you already learned, or you're adding new skills, but you already have that foundation. Rather than saying, when I make a million dollars, that's when I'm going to have these conversations. You're going to miss all of this opportunity and all of this history to learn that it's going to feel much harder.

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Andrea Rotondo [00:30:26]:

It's not impossible, and I'm super confident that any practice owner can do that. However, if you can start earlier and make it easier and less time consuming, why not take advantage of that opportunity?

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Michael Fulwiler [00:30:38]:

Definitely. I'd love to dig into bookkeeping specifically. So you are a bookkeeper who specializes in working with therapy practice owners when it comes to bookkeeping. In this conversation, we've talked about categorization. We've talked about reconciliation. These are accounting words that when people hear, their eyes just glaze over. Could you just explain what bookkeeping is, and could you define some of those terms?

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Andrea Rotondo [00:31:10]:

Yes. Bookkeeping is basically tracking your money for your, your practice. So making sure that all of those transactions in your bank statements or in your credit card statements, they have a home right now. They're just all scattered, and our job is to put them in the right category. Now, when we talk about reconciling, it means that at the end of every month, we're making sure that what we recorded on whatever software we're using or whatever spreadsheet, or me and Quickbooks, at the end of every month, we're actually checking that what we have matches your bank statement. And this step is really, really important because we could make mistakes, or even the tech makes mistakes. Sometimes there's transactions, for example, if your bank is connected with the accounting software, and we're pulling those transactions automatically, sometimes there's duplicates, and sometimes there's missing transactions, and it could be a $0.01 type of thing, and it could be $25,000 in one transaction or more. So we want to make sure that we're capturing every single transaction coming in.

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Andrea Rotondo [00:32:25]:

And that is the process of reconciling, basically, just making sure that what we have is matches your bank statement balances. That is another, like, word that you'll always hear from us, is the balances and balances matching. So, basically, the, the whole process of bookkeeping, it really varies according to you, who you hire. You could go from really basic process of just categorizing transactions and reconciling them every month. And that's it to, okay, now that we finished a categorization and reconciliation, which, in my opinion, that's like the bare minimum, then we move on. To out of compliance, which this area is compliance. We move on to a more of like the CEO type of thing that we were talking about. Now, here are your, here are your financial reports, or we can also jump into one on one meetings.

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Andrea Rotondo [00:33:18]:

Let's talk about your reports. You can ask me questions, or I have questions for you. All of that. It's still under the umbrella of bookkeeping in a way, but it's also moving to accounting. So even though each word like bookkeeping, accounting, they have their actual definitions in the dictionary, when you work with somebody, you're still going to find some variance between the person or the company hiring services according to what they are offering. So it's important that you are aware what you're looking for, so that when you go and talk to somebody and you want to hire them, you are aware of what to ask for or what you are going to get in return when they ask, when they tell you, these are my services and don't feel afraid of asking what this means or what is that? Definitely you're not going to be the first person to ask, and we're always happy to answer your questions.

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Michael Fulwiler [00:34:19]:

For folks who are listening, who haven't worked with a bookkeeper before. How much does bookkeeping cost? I imagine there's a range of services, but could you talk a little bit about the investment in bookkeeping and what that looks like?

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Andrea Rotondo [00:34:36]:

Yes. Again, that's definitely going to vary on your practice, the legal entity that you have, the tax entity that you have, part of the pricing is also going to depend on your volume of transactions. So how many transactions you have, how many bank accounts. Sometimes that matters. Not everybody takes that into consideration. If you have employees or if you have contractors, that tends to affect the price as well. Obviously, the actual scope of work outside of the reconciliation and reconciliation, if there's anything involved with taxes or filing taxes for you or filling out any other tax returns for you, there are services that your bookkeeper could also provide like AP or AR, like receivables, although that will fall under billing. But some bookkeepers also work with billing accounts payable, so paying bills on your behalf.

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Andrea Rotondo [00:35:32]:

There's this whole range of services, and I have seen that more and more services for bookkeeping are moving towards like flat fee for every month, and we include all of this and it's going to be the same fee every month. So I would say when you work with somebody like that, it's so hard to tell you because if I tell you a number, you're going to kind of like go based off of that. And then it turns out that it's going to be really difficult, different from that. But I would say at least a couple hundred dollars a month, if not more, for the minimum of a monthly fee.

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Michael Fulwiler [00:36:08]:

Yeah, I think that that is, is important just as a benchmark. Right. And I think going back to how much time you're spending, right. So if you as a therapist are spending one to 2 hours a month and your session fee is $150 a session, it's potentially $150 to $300 of your own time. Right. That you're spending to do your own bookkeeping. And when you think about it that way, like the opportunity cost of doing it myself versus working with a professional, well, at that point, it starts to sound like not that expensive and with all the benefits that you've described as well. So I think thinking about investing in your business into that peace of mind we've talked about, into having that confidence in your numbers by working with someone who is a professional, but also the fact that it's saving you time as well, that you can spend, you know, to see one or two more clients a month, for example, or even if you're not using that time to reinvest in your business, now you have that time back to spend doing whatever you want.

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Andrea Rotondo [00:37:22]:

Yeah. And I think to add it to that is when you're doing it yourself, there's a lot that you don't know. So not only you're spending time actually doing what you're doing, but also learning and watching a whole bunch of different YouTube tutorials and signing up for webinars and signing up for, you know, this and that, workshops and whatnot. And there's a lot of courses, and I don't have anything against any of these, they're all great. But there's going to be a point where you have to make a choice. Like, I am no longer in the very early stages where I am doing everything, where, you know, this is, that's very common in the life of an entrepreneur. In the beginning, you do everything yourself. You're learning a whole bunch.

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Andrea Rotondo [00:38:03]:

You don't know a lot, but we don't stay in that kind of like, troubleshooting stage forever. There's going to be a point where you have to move on from that. And by removing yourself from that troubleshooting place, not only we have the cost opportunity, like you're saying, but now you're also removing that learning and watching tutorials and watching videos and moving on from that is also now you kind of know that things are right because sometimes, in most cases, when you're doing it your own, there's always something that is off. And like, I have to ask my accountant when I file my taxes because I don't know about this or I don't really know where to put this, or that kind of is hanging there. So you kind of usually have something that is lingering and it could potentially affect your taxes in a way that, you know, you messed up in your numbers. You have to do this all over again. So now you move on to knowing that, okay, now at least that I'm, the numbers are correct, which that's the goal, right? With this, you don't want to hire somebody that you kind of feel like, oh, this is always wrong. You want to work with somebody that you know the numbers are correct.

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Andrea Rotondo [00:39:12]:

So there's different layers to all the.

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Michael Fulwiler [00:39:15]:

Benefits for folks who are listening and they don't have an accounting system set up in their practice. They're not doing any bookkeeping. We're recording this conversation in June. What advice would you have for them? Is it too late to catch up? Because I'm sure they may be feeling a little bit, maybe overwhelmed.

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Andrea Rotondo [00:39:39]:

Yeah, definitely. We talked a whole bunch of stuff. What I want you to take from this is that it's not too late at all. I would want you to take the word assess. Assess where you are right now. Assess your financial systems. Look at your bank. Is it working for you? Look at your current method for bookkeeping.

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Andrea Rotondo [00:39:59]:

Whatever it is, is it working for you? Look at how you're accepting your payments from your clients. Is that working for you? And try to make sense of them, not just as isolated components. Components, but how well they blend with each other and how well they make the whole process flow again in a time efficient manner for you as the owner, and then start making changes as you need to. I definitely don't want you to take one whole weekend to make all of this happen. That's just going to keep you even farther away from all of this. I would want you to make that assessment and then perhaps one change every day. Maybe that's too fast. Maybe once a week, maybe one a month.

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Andrea Rotondo [00:40:48]:

Whatever goes well with you and your goals. Always remembering we do have tax deadlines and they're the same every year. Those should not come as a surprise. But here, be in tune with, with yourself as well, you know, especially with something so overwhelming and so that it really keeps a lot of people away from going into business as finances, just being in tune with yourself. If this feels too much and you feel like, it might be the last thing that you want to do with your business and just put a pin on it and then come back another day. So I would say that assess where you currently are, make those changes little by little with the goal that by the end of the year, if not, preferably sooner. Right. But if not by the end of the year, you have a somewhat clear picture of what your financial systems are.

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Andrea Rotondo [00:41:44]:

And also you have those records for your taxes. Ideally by the end of this year, you already have everything in place. It's not going to take you a whole weekend to do this on your own. You don't have to do anything manual. It's already going to be done. So take this year kind of like as your practice, and then starting next year, you're already going to have that experience under your belt and that's going to give you more confidence. And also you're going to be able to determine or identify those opportunities, but also where you're lacking in your financial systems and then try to plan for those changes to come next year. So that this year your focus is the very basics, your bank, credit cards, payment processors, and your bookkeeping in place.

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Michael Fulwiler [00:42:29]:

I love that. What we talked about earlier was that the best time to set up a financial system for your therapy practice is when you're just getting started. Right. If you didn't set up a financial system in the beginning, that's okay. Like the next best time is now.

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Andrea Rotondo [00:42:46]:

Yeah.

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Michael Fulwiler [00:42:46]:

And that's just going to set you up for success moving forward. Right. It's not too late to set up a system for your business. I think a lot of people that I talk to, they just feel overwhelmed and they avoid it and they don't want to deal with it. And then that just pushes it down the road. And so I think the more that you can try to get ahead of it, set yourself up for success moving forward, the better. And bookkeepers and bookkeeping, we can always get you caught up. We can get you up to date.

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Michael Fulwiler [00:43:19]:

So even multiple years if needed, if you haven't been doing bookkeeping, bookkeepers can get you up to date. So it's not too late to start your, your bookkeeping as well?

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Andrea Rotondo [00:43:28]:

Yes, for sure. And remember that with financial systems, this is always going to be moving. This is always going to be adjusting because life changes, your business will change. So there's always going to be an opportunity for you to assess. You know, the assessment is not necessarily something that is going to only happen in the beginning. I would encourage you to do that once you feel like you're caught up and you're there and you file your taxes and you're in a good place, or even if that's you today, you feel like you're in a good place, then maybe plan for to make those assessments like once a year or once every six months, to always identify so that you can actually be in a place that you feel like you're caught up. You feel like you're on track. And of course there's going to be detours and things will happen, but then you just fix them and then you come back instead of feeling like you're always behind.

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Andrea Rotondo [00:44:20]:

And for therapy practice owners, I feel like that's very common for everyone to feel like they're behind, like they're not there yet, like they're not on track when it comes to their finances. So as long as we build those financial systems and we are periodically checking in on them, you can stay on track.

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Michael Fulwiler [00:44:40]:

Andre, we're getting to the end of our time here. For listeners who are interested in connecting with you and, you know, learning more about the services that you offer. Where can they find you?

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Andrea Rotondo [00:44:50]:

You can find me on LinkedIn. I'm always there. I would love to connect with you there as well, as my website is liquidsensebookkeeping.com, so. Liquidcent sbookkeeping.com.

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Michael Fulwiler [00:45:04]:

Great. Definitely recommend connecting with Andrea on LinkedIn. She's great. We're connected there. Thank you so much. This has been a really helpful conversation. Thank you for breaking these topics down that are complicated and confusing into, you know, a. A more tactical and easy to understand way.

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Andrea Rotondo [00:45:21]:

Thank you so much for having me today.