Description
Financial Management For Your Mental Health Practice: Key Concepts Made Simple
By Jeff Zimmerman, Ph.D. and Diane Libby, CPA.
Published by TPI Press
Perhaps no issue is more important to the sustained success of a mental health practice than understanding the financial aspects of running a business. Yet this topic receives such little attention in training Without full awareness of where revenues are coming from, and where they are allocated in the practice, how can a small business owner know how they are doing financially? Could you be doing better? Where should you invest more resources? Where could you cut expenses? How can you review financial statements in order to plan for sustained growth in your practice?
One need not be a CPA to develop and maintain a successful practice; but understanding basic accounting concepts is one of the necessary ingredients. In this book Dr. Zimmerman combines his years of experience running a large mental health practice and consulting to mental health practices, with Ms. Libby’s years of experience working as a CPA for mental health practices, to develop a helpful and important primer that is essential reading for anyone wanting a financially successful practice.
Read the introduction here (click arrow to expand) Introduction Get ready to start on a journey. This is a journey you may believe that you just cannot take. Or, it may be one that you have attempted but then given up on. The journey is learning some basic accounting and financial business principles and practices as it relates to the operation of a mental health practice. No, you don’t have to be good in math or have an MBA as a prerequisite to begin this journey. We (a psychologist who has spent over 30 years in private practice and an accountant who consults with mental health practices) are going to teach you the basics in a manner that is straight to the point and pertinent to running an independent mental health practice. Whether you are in solo practice or have a large inter-disciplinary practice (or are somewhere in between), we have written this book to help you think about your practice as a business and better understand some of the basic accounting and financial principles necessary to be fiscally aware. It is going to be easier than you expect. Learning these principles can help you: (a) make better business decisions; (b) deal with bank and loan officers, and (c) understand the reports generated by your office software and your accountant. We have purposely kept this book short. It is only seven chapters. Each chapter will discuss a key element related to the journey (a stop along the way) and conclude with how all the points in the chapter can fit together. We will begin in Chapter 1 focusing on why this all seems so difficult. In Chapter 2 we discuss some basic principles of Accounting and Finance. We will show you in Chapter 3 many key measures related to your practice and show you how you can use them to understand and when necessary shift what is happening in the business of your practice. In Chapter 4 we show you how to use some of these measures and combine them with general, as well as some specific, strategies for managing your practice. Chapter 5 outlines various strategies for compensating employees and how to determine what ranges of compensation are reasonable for your particular practice. Chapter 6 focuses on planning for retirement. Chapter 7 addresses a number of common business decisions that practice owners face and how to line up your mentors and advisors.
Table of contents (click arrow to expand) Chapter 1: I Never Took an Accounting class Why is it so difficult? How it all fits together Chapter 2: Accounting and Finances Method of accounting General ledger/chart of accounts Profit and loss statement Budgeting Accounts payable Accounts receivable Debts: Loans and lines of credit Setting up your practice management system and your accounting system How it all fits together Chapter 3: Practice Metrics Income and expenses Billings and collections Accounts receivable Case origination How it all fits together Chapter 4: Principles of Practice Management Weekly oversight meetings Monthly oversight meetings Quarterly oversight meetings Additional strategies for internal controls Other strategies How it all fits together Chapter 5: Compensation Employee compensation Owner’s compensation How it all fits together Chapter 6: Saving for Retirement Retirement plans with no employees Retirement plans for practices with employees How it all fits together Chapter 7: Making it Work General principles Common business decisions Lining up your mentors and advisors How it all fits together Request a review copy. Download the request form and email it as an attachment to jeffzimmermanphdATthepracticeinstitute.com. About the authors
Jeffrey Zimmerman, Ph.D., ABPP is a licensed psychologist (Connecticut and New York) in independent practice for over 30 years. He returned to solo practice in 2007 after serving as a founding and managing partner of a group practice for 22 years. Dr. Zimmerman is a founding partner of The Practice Institute, LLC , and co-author of The Ethics of Private Practice: A Guide for Mental Health Clinicians. He is a Fellow of the American Psychological Association and past-President of the Connecticut Psychological Association. He has received numerous awards, including Distinguished Contribution to the Practice of Psychology from the Connecticut Psychological Association
Diane V. Libby is a licensed CPA in Connecticut with 33 years of experience in public accounting. Diane joined Adams Samartino & Co. CPAs as a partner in 1996, coming from the regional firm Blum Shapiro and Co, where she became a tax partner in 1990. She earned her Bachelor of Science degree in Accountancy from Bentley College in 1982 and a Master’s Degree in Taxation from the University of Hartford in 1987. Diane is a member of the Connecticut Society of Certified Public Accountants. Additionally she serves on the Board of Governor’s for Charlotte Hungerford Hospital.Are you considering this book for a class you are teaching?
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A slim eighty-two pages, this book is applicable for practitioners in all settings, including solo and group practices. Mental health practitioners who are considering entering the world of independent practice and making decisions about whether to go solo, start, or join a group practice will also benefit…In Zimmerman and Libby’s book, each of the seven chapters is compactly organized, starting with an overview of basic and important components of financial management, including an aptly titled chapter: Accounting 101. Principles and implementation of the business end of practice are concisely explicated. Compensation and critical evaluation of productivity both for the group practice owner as well as the solo practitioner is also explained in detail, giving the practitioner a framework for how to think about the above. Concepts related to independent contractors versus employees are clearly defined. Saving for retirement and the variety of retirement plans available for the self-employed and group practice owner are, also, very clearly described. The final chapter helps integrate the previous chapters and also addresses the importance of mentors, rental space and leases, decision making around hiring an independent contractor, marketing and other common business decision-making factors to consider. The downside of this book? It was too short… But if you think of this book as a delicious appetizer, you will be primed to go on to a main course, such as The Handbook of Private Practice, by Walfish, Barnett, and Zimmerman, which is due to be published by Oxford Press in the future.
By Valerie L. Shebroe, Ph.D., Psychologist, East Lansing, MI