How to Start a Therapy Practice: 5 Must-Have Accounting Basics to Get It Right

Starting your own therapy practice is an exciting step. You’ve done the work, built the skills, and now you’re ready to create something meaningful on your own terms. But as freeing as that sounds, it can also feel a little overwhelming, especially when it comes to bookkeeping, accounting, and setting up your finances the right way.

If you’re a therapist starting a private practice, here are five accounting must-haves to help you build a solid financial foundation so you can focus on what matters most: caring for your clients.

1. Choose the right business Structure

Before anything else, it’s important to decide how your practice will be structured. Are you planning to work as a solo therapist, or do you hope to bring on other clinicians in the future? The answer will help determine your business setup. 

For most solo therapy practice owners, forming an LLC (Limited Liability Company) is a smart starting point. This structure helps protect your personal assets and keeps your practice finances separate. As your therapy business grows, you may consider electing S-Corp status, which can provide additional tax benefits once your income reaches a certain threshold.

For a deeper look at what to consider when choosing the right business structure for your practice, read more here.

2. Open a business account

Once you’ve established your business structure, open a separate bank account for your therapy practice. This step might sound simple, but it’s one of the most important things you can do for your financial health.

Mixing personal and business finances is a common mistake that can make bookkeeping confusing and create issues at tax time. A dedicated business account keeps things organized, builds credibility, and makes it easier to track your income and expenses.

All you need to open one is your EIN (Employer Identification Number), which you can request directly from the IRS.

3. Set Up Your Accounting and Payment Systems

With your bank account ready, the next step is creating a smooth bookkeeping system for your therapy practice. Reliable accounting software for therapists, such as QuickBooks, can help you track income, record expenses, and generate reports that show exactly where your money is going.

If you’re not ready for software yet, a simple spreadsheet can work well, consistency is what matters most. When you’re ready to move into QuickBooks, we can help you get it set up and show you how to use it with confidence.

4. Create a clear pricing plan

I have seen many therapists underestimate how important this step is. Your pricing and pay structure shouldn’t be random; it should be intentional.

Start by researching therapy session market rates in your area and consider your overhead expenses. These are things like rent, software, and insurance. From there, determine what you need to earn to sustain your business and pay yourself fairly.

A clear plan helps you stay profitable and prevents burnout. It ensures your fees reflect both the value of your work and the reality of running a business.

5. Build a simple budget

Finally, create a monthly budget for your therapy practice. It doesn’t need to be complicated. A simple monthly plan can help you track where your money is going and make sure you’re not overspending.

Your budget is a way to stay grounded and intentional in how you run your business. Reviewing it regularly will help you identify trends, plan for growth, and feel more confident in your financial decisions.

Bringing It All Together

Building a therapy practice is a process that takes patience, care, and intention. When you take time to set up your bookkeeping and accounting systems from the start, you create a foundation of stability and confidence that allows your business to thrive long-term.

Each thoughtful financial step you take now allows you to spend more time on what truly matters: your clients, your mission, and the work that fulfills you most.

💚 Be well, and keep moving forward with confidence.

If you’d like more guidance on bookkeeping for therapists or setting up your private practice finances, visit Open Books to learn how we help therapists grow with clarity and calm.

🌿 Subscribe to the Open Books YouTube channel for simple, supportive accounting tips designed just for therapists.