In this episode, Gordon discusses the ethics of money management in clinical practice. Gordon’s favorite course in graduate school was legal and ethical issues in counseling. First, Gordon discusses documentation and some ethical considerations when taking payment for a session. One suggestion is to keep the client’s specific finances separate from the bigger picture business finances. Later, Gordon informs us on how to turn a profit and some tips on setting a sliding-scale fee. Stay tuned to hear Gordon’s thoughts on ethically keeping accurate records for tax information and what to do when a client does not show.
Implementing Ethics
Clients see the clinician with an expectation of paying; most people do not expect free services. The deciding factor for many clients is whether or not the clinician accepts insurance. Insurance panels are bound legally by a contract to provide services to people with this insurance at the rate that was agreed to. When receiving payments, the clinicians need to have systems in place to track the financial side of the business.
Documentation
If you are in private practice and someone pays you for your services; how do you document that payment? Larger practices probably are using an electronic health record system in place to file claims. In that system, there is also a financial component to it; a patient billing system. You can look and see what a patient owes for a session if the claims have been filed, what you can expect to receive, and what the patient might owe for copays. These systems will significantly alleviate any stress concerning the business side of private practice. If you are just getting to start your practice, you can do something simple with a spreadsheet.
Business Finances
You receive a payment from the client, it is documented, but then you need to know what to do with the money next. Obviously, you are going to want to put it in the bank. There should be a whole separate system for the business side of your finances. Using a system like QuickBooks or FreshBooks will help you keep your books and track your income. It is a good practice, when using these systems, that as money comes in, that you leave out the names of clients in those transactions. Instead just make a notation that came from a client, but no client name. It is a great way to track the income and expenses for your business. Ethically, keep track of your money with client records and have another system for your business finances.
Profiting and Fees
To have a profit, the amount of income you have need to exceed the number of expenses you have. Tracking your earnings over time is really important to the expansion of your business. Knowing your profit and loss statement each month will allow you to see where you stand financially.
You might want to consider using a sliding-scale fee for people who do not have insurance or who choose not to use their insurance for counseling services. This fee is based on the person’s income and is typically found at non-profit organizations. Do not set your prices too low. Gordon’s lowest fee used to be thirty dollars, this was too low to maintain Gordon’s practice. Ensure your scale range is viable for you and fair for your clients. One suggestion Gordon has is to set your lowest fee at what your average per-session rate is.
No-Show Expectations
If you have many no-shows, that is something you need to address. You have an ethical responsibility to discuss this with your clients. Many times, clients not showing up for sessions is a clinical issue. This was ingrained in Gordon from graduate school. As the clinician, you need to be able to ask what is wrong with them that they are avoiding sessions. Make sure in your intake paperwork that it is noted they will get charged if they no-show you for a session. Keep clients credit cards electronically, so you have access to their information in case of a no-show. Gordon does give them the option to not provide their credit card information; a surcharge will be added however if they need to take a payment. All of this gets discussed at an intake session and in their intake paperwork.
Resources Mentioned
Disclaimer: some of the resources mentioned are affiliate links. This simply means we receive a commission if you purchase the service or product mentioned, at no extra cost to you, if you use those links. Thanks for using the links!
Practice Solutions
Brighter Vision
Therapy Notes
Money Matters in Private Practice
QuickBooks
FreshBooks
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Meet Gordon Brewer, MEd, LMFT
Gordon is the person behind The Practice of Therapy Podcast & Blog. He is also President and Founder of Kingsport Counseling Associates, PLLC. He is a therapist, consultant, business mentor, trainer and writer. PLEASE Subscribe to The Practice of Therapy Podcast on iTunes, Stitcher and Google Play. Follow us on Twitter @therapistlearn and Pinterest “Like” us on Facebook.