Bookkeeping gives you a clear picture of your practice finances, where your money is coming from, and where it is going. When your bookkeeping is up-to-date, you will be able to understand areas to save and areas to invest more, as well as seasonal fluctuations in your practice, and have an overall clear picture of how much you can pay yourself (and your clinicians).
Having accurate finances saves you hours during tax season as well. When your books are reconciled and up-to-date, you avoid scrambling for hours and days to get caught up prior to the tax deadline or miss out on any tax write-offs or deductions. Most importantly, you will avoid subjecting yourself to any potential errors or late fees.
Why is bookkeeping important?
- Ensure accurate financial records. You need accurate bookkeeping to monitor the progress of your business and comply with IRS regulations for good recordkeeping.
- Accurate bookkeeping produces financial reports. Your financial income reports, such as profit and loss statements, are then used to file your taxes and ensure you claim all eligible deductions.
- Leads to actionable business decisions. Bookkeeping provides a clear picture of your business's income and expenses. It enables you to identify improvement areas, track progress toward goals, and make data-driven choices for your private practice. That could mean anything from taking that much-needed time off to thinking about growing your private practice.