Your calendar finally has a few quiet spaces, and you’re catching your breath after months of back-to-back sessions. Now’s the perfect moment to pause and reflect before the holiday season kicks in.
Doing a little financial housekeeping before year-end helps you see where your money went and what could use more attention next year. Think of this end of year financial checklist as a way to wrap up your practice’s year and set yourself up for an easier start in January.
Revisit Client Billing And Income
Even if you stay on top of billing every month, the year-end review gives you a chance to make sure nothing got lost along the way.
Go through your practice management system or billing software to check for any unpaid or overdue invoices. Sometimes clients fall behind, or insurance payments get delayed. Small balances can quietly add up. It’s easier to catch them now and nudge your clients before the calendar resets.
If you work with insurance, double-check any claims that are still pending or marked as denied. A year-end sweep makes sure all the work you did actually gets compensated and gives you a clean slate heading into the new year.
Reconcile Your Bank And Credit Accounts
Even if you already use QuickBooks or another accounting app that automatically matches transactions, don’t skip your year-end reconciliation. The software is great at catching obvious matches, but it may not pick up subtler errors.
For example, you might find:
- A duplicate transaction that got imported twice
- A payment categorized incorrectly (say, continuing education marked as “supplies”)
- A bank fee or refund that slipped through without a category
- Or a missed transfer between accounts that looks like income on one side and an expense on the other
These small mismatches can throw off your profit numbers or tax deductions without you realizing it.
Review Accounts Payable and Accrued Expenses
Every practice has bills that carry over, like rent, utilities, insurance renewals, supervision, continuing education, and software. But before you close the year, it’s worth reviewing what’s still outstanding and what should be paid now. A forgotten invoice or delayed payment might not seem like a big deal, but it can distort your profit picture and even create cash flow surprises in January.
Reviewing your expenses helps you see which belong in this tax year. Paying certain bills before year-end could reduce your taxable income, while it might make sense to defer others.
You might also discover expenses that haven’t been recorded yet, like supervision hours, online course fees or client materials you purchased last month. Capturing them now gives you a truer snapshot of your real costs.
Run Key Financial Reports And Analyze Profit Margins
Once your books are clean, pull your key reports for the year: your profit and loss statement, balance sheet and cash flow summary.
Year-end reports reveal trends that are less visible on a month-on-month basis.
You can get answers to questions like:
- Did your income grow compared to last year?
- Did expenses rise faster than revenue?
- Were there months you felt constantly busy but earned less than expected?
If you’re not sure what your reports are telling you, you’re not alone. Many therapists find it easier to work with accountants who specialize in private practice and can provide spot-on advice when it comes to payroll, deductions, salary, or taxes.
Meet Your Tax Advisor For Year-End Planning
Take time to connect with your accountant or financial advisor before the year ends. This is when you can make small moves that have a big tax impact, like prepaying rent, purchasing equipment, or making a retirement contribution before December 31.
You can also review your total tax liability for the year and compare it to the quarterly estimated tax payments you’ve made to adjust your final payment and avoid any penalties.
If you’ve never set aside money for retirement, this is a great time to start. Setting up a SEP IRA, Solo 401(k) or other retirement plan to help you save on taxes and build long-term financial security.
Set Goals And Forecasts for Next Year
Think about what kind of year you want to have, not just financially, but personally. How many clients would feel sustainable? How much time do you want for admin, training, or rest?
Are you thinking of expanding your practice? Or have you been mulling over whether it’s time to raise your therapy session fees? The year-end window is the perfect time to think these things through.
From there, you can create a budget and set financial goals for your practice. If planning or forecasting feels overwhelming, you don’t have to do it alone. Our 1:1 financial coaching for therapists can help. We create a roadmap that connects your session fees, expenses, and desired income into a plan that works for you.
Get Clarity Before Diving Into The Next Year
The year-end review is about learning from what happened this year so you can make more intentional choices next year, whether that means adjusting your fees or finally getting help with your finances.
At Traktion, we help therapists look beyond the books into opportunities that could shape their practice’s future. From bookkeeping to CFO-level support, we help you build a business that supports your purpose and your peace of mind.
Schedule an introductory call with our team today, and we’ll get right back to you.