Year End Reporting—A Checkup for Your Practice

December has arrived and the holiday season is upon us. My practice sometimes slows down during this time of year due to the holiday season. I like to use this time to review the way my business has performed throughout the year. There are two reports I use; one is a simple count of the number of clients I see each month that I’ve created in Excel. I like to maintain annual data so I can analyze trends and compare my numbers to the previous years. I print this report out so I can review it with my Profit and Loss report.

A Profit and Loss report (also called a Profit and Loss statement) is an accounting of the profit you have earned minus your business expenses. I use QuickBooks accounting software to generate my report. You don’t need to purchase accounting software to create a Profit and Loss Statement, you can develop your own report by downloading your credit card data and banking transactions into a spreadsheet and classifying them by expense type.

A Profit and Loss report contains the data you need to analyze your business expenses and adjust your spending. It’s a useful report to have on hand while you are preparing your taxes. Sample categories include: Income, Gross Income, Expenses, Total Expenses, and Net Income (The total of Income minus Expenses). This year I took a close look at my training expenses to be sure I’m attending high quality trainings without exceeding my budget.

After I’m done reviewing my Profit and Loss report I compare my monthly earnings to my hours worked, using my first report. I use this data to inform my goals for next year. For example-I assisted at several Brainspotting trainings this year which caused me to miss some client hours on Thursdays. I calculated my earnings for those months and then I reviewed the referrals I received through the trainings and found it was a profitable use of my time.

Once I’m done with my reports, I review my current business goals and set new goals for the upcoming year. You may have guessed by now that I am a data crunching geek. All these calculations can be done by hand if you prefer. If you need help getting started, I recommend you ask your accountant for some assistance, this will make things easier at tax time.

Happy holidays to you and your friends and family.

Maria Gray, LMFT, NMP, CGP, is a psychotherapist in private practice in Century City, where she specializes in trauma and addictions. Maria offers individual business consultation and private practice workshops for therapists who want to thrive. To learn more, go to www.mariagray.net.