Specialised accountants for psychologists
Posted by Northadvisory on August 10, 2021
Being a psychologist in 2021 is undoubtedly a challenging profession.
The impact of the global pandemic has changed the way our day to day lives function, and the demand for mental health services has dramatically increased.
But even before COVID, the industry felt increasing pressure… with Australia’s ageing population and complex social fabric, the demand for psychologists and other mental health professionals was already high.
Providing care for your clients is always the primary focus, but it’s important that a psychologist also manages the financial aspect of their services. Here at North Advisory, we are specialised accountants for psychologists. We understand your unique financial requirements and have years of experience working with health professionals.
Today we look at some of the financial pain points you might experience as a professional psychologist and offer some practical solutions.
Starting your own practice
Starting your own practice is an exciting time, but there are many crucial decisions to make through the process. Each can have a significant impact on your finances, and we recommend seeking professional accounting advice to make sure you understand all implications.
Some of the most important decisions you will make include:
- Which business structure should you use?
- Should you rent or buy your business property?
- What’s the most effective way to fund your fit out, including any specialist equipment?
- Should you consider buying into an established practice?
- What systems can you employ to manage bookings and your accounting?
An accountant will be able to assess the financial viability of your options and give you objective recommendations based on your current financial situation.
If your practice is growing, you might find that you become buried in administration. If you find yourself stretched between helping your clients and all the necessary business tasks, you might consider employing support staff.
When you are at this stage, there are again many aspects you need to consider.
It’s not just your prospective employee’s salary that you should be thinking about.
Do you require someone on a full-time basis, or could you employ them part-time or even casually? Every type of employment has specific entitlements, so this could impact your decision.
You will also need to be across payroll processing, including tax, superannuation, insurances and any other legal requirements relating to employment.
There could also be additional costs involved in the recruitment process as well as the time it takes to train your new team member. Plus, don’t forget about the equipment they will be working on… you might need to provide them with a computer or phone in order to perform their role effectively.
Managing cash flow
As with any business, your psychology practice will have a range of different ongoing costs. Once you’ve completed the initial fit out with furniture, equipment and relevant supplies, your operating expenses tend to become more regular. They can include rent and outgoings, utilities such as electricity and of course your salary and that of any employees.
Having regular expenses means that you need to manage your cash flow effectively. Poor cash flow arises when you don’t have enough funds available to cover your expenses.
A lack of financial planning can have negative implications, so this is where you can turn to your accountant for their expertise.
They can help you understand your cash flow statement so that you can see where your practice is spending money. Regularly reviewing your expenses allows you to identify your weaknesses and find where you can cut costs as well as track your payments to suppliers.
Tax minimisation and asset protection
To achieve the best financial outcome, it’s critical that you utilise tax effective strategies and that you access all the relevant deductions. But it is also essential that you protect your assets from litigation.
Your accountant can help you protect your wealth by making sure you have the best business structure in place, whether it’s a company, partnership or family trust.
Seek professional advice
Here at North Advisory, we understand your time is extremely valuable. You have clients to care for and you want to know that your accountant can provide the exact services you need. We pride ourselves on our ongoing close working relationships with all our clients, our fast turnaround times and proactive approach.