How Can a Therapist Make Six Figures?

Therapists open private practices because they want to be their own boss just like anyone who starts a small business. They also want to focus on what they believe is important in their profession. Whether or not making a six figure income was part of the plan, it should be. In order to practice your profession as you wish and help your patients as you would like to, you need to run a profitable business so that you will be their next year and the year after for those patients. So, how can a therapist make six figures? They need to run their practice like a business at same time as practicing their profession.

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Can Therapists Make Six Figures?

Yes, they can. The income range in the USA for therapists runs from $50,000 to $300,000. The obvious factors that affect where you fall within that range include how many hours you work but also where in the country you practice and the overhead of running a practice in your region. At Mental Health Accounting we help professionals handle the business side of operations and can provide insights that would not occur to someone who mind is focused on the technical aspects of their profession. Here are some useful thoughts on how can a therapist make six figures.

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A Profitable Therapist Prioritizes Billable Work

The therapist is the reason that his or her office exists, why patients come for help, and the money-making engine that funds the operation. It may be tempting to try to handle payment tracking, coding, and financial aspects of your practice, but every hour spent doing these things takes you away from the work that generates income. The profitable therapist puts billable work first and outsources the business aspects to accounting professionals.

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Profitable Therapists Receive and Read Meaningful Financial Reports

For any small business to be successful, the boss needs to routinely look at how the business is doing and “do the math” to see where profit is coming from and where expenses are hurting the business. At Mental Health Accounting we commonly use or advise our clients to use QuickBooks and its custom reports. When we provide these reports to our therapist clients, they are able to track cash flow and get useful insights into how their business is going. And, they will be able to see where business changes need to be made to make things work more smoothly and profitably.

Every billable hour or work generates income. Set a figure for how much money you want to make a year and divide it by the number of weeks that you will be working. Divide that by the number of billable hours that you will work each week. That will give you want you need to earn per hour to meet your goal.

When you work with us at Mental Health Accounting we will help you understand how much “overhead” in terms of expenses and taxes need to be taken out of what you earn in order to meet your goal. Reading meaningful financial reports is something that therapists making six figures routinely do.

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File Claims and Collect Payments to Make Six Figures a Year

A fact of business is that you not only have to do work to get make money but you also have to bill for your services and make certain that you collect. This process starts with having organized records as well as prompt and efficient claim submission. If you are having problems collecting, you need to know where those problems are so that you do not keep giving away your time for free. This problem can arise from private payers or form insurance companies that do not pay on time.

It can also be that you are not coding your services accurately. This can result in delays and can result in your not being paid for the work that you actually did. When we help you look at a situation like this we will be able to advise whether or not paying for professional coding services might be a profitable idea.

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The Bottom Line

When your practice is new and you do not have many patients, it is tempting to try doing all of the business parts of the job as well as your professional work. While this may be necessary, an excellent idea is to get professional advice on how to handle those business chores before you make mistakes and lose money. Talk to us at Mental Health Accounting for advice on how to run your practice with the goal of making six figures.