Business Accounts, Bookkeeping & Paying Yourself as a Solo Therapist (and Mental Health Professional)
Gain insights on how to manage your business accounts, bookkeeping, & paying yourself as a solo therapist or mental health professional with a few simple steps.
As a therapist, psychologist, or psychiatrist running your own solo practice or working as a 1099 independent contractor, your top priority is helping your clients and patients. But there’s another crucial role you have, too—perhaps it’s a bit obvious, but:
You’re officially a business owner.
That means you’ve got responsibilities that go far beyond showing up for sessions. Specifically: we’re talking the money stuff.
Let’s walk through the basics of setting things up the right way (or cleaning things up if you’ve been winging it until now) so your business finances feel just as solid as your clinical work!
Business Accounts: Separate Your Business and Personal Money (No Exceptions!)
This is a big one… Do not skip on this!
Mixing your personal and business money is the fastest way to make tax season way more painful than it already is (trust me, I’ve seen it firsthand). It can get stressful, confusing, costly, and more than all—extremely time-consuming.
So what’s the fix?
Separate your business and personal finances right out of the gate—from day one!
This simple step will save you hours of frustration, help you stay organized, and keep the IRS off your back (always a win). As an added bonus, if you work with a CPA, they’ll also love you for it (they may even charge you a little less since everything’s already organized).
The ideal setup:
Business Checking Account
This is your practice’s financial home base. All of your client payments (income) come in here, and all business expenses get paid from here.
Look for a business checking account with:
- No minimum balance requirements
- No transaction limits/fees
- No monthly charges
Online banks like Bluevine is a solid choice. Larger, traditional banks like Chase or Bank of America work too, just be mindful of their fees.
Business Saving Account(s)
This isn’t required, but highly recommended. This is where you stash:
- Taxes
- Your business emergency fund
- Savings for future investments in your practice (new office couch, anyone?)
Having these buckets separated out makes it way easier not to “accidentally” spend your tax money on concert tickets or a spontaneous weekend getaway.
Look for savings accounts with no fees and a solid interest rate (3%+ is great as of now).
Business Credit Card
This one’s totally optional, but if you’re going to have business expenses anyway, why not earn rewards or cash back?
While some business expenses require checking/debit (like office rent or utilities), many expenses (like meals, travel, supplies) can be put on a credit card. You’ll be able to earn cash-back or travel points, which can essentially be free money or travel! Just make sure to pay the balance off monthly so the rewards stay truly free (and so you don’t get charged interest).
Choose a card that aligns with your typical business spending (one that gives you the most rewards/points for your most used business spending categories).
So what about personal spending?
Personal expenses = personal accounts. Business expenses = business accounts. Keep your financial lives separate!
Bookkeeping Basics
As a solo mental health practitioner or contractor, bookkeeping can (and should!) be simple. The good news is that solo practices generally don't have a substantial amount of expenses, so this can be very manageable.
So what exactly is bookkeeping?
It’s just the tracking of your business income and expenses—that’s it!
Fortunately, you don’t need manual spreadsheets or shoeboxes full of receipts anymore. Tools like Quickbooks, Wave, or Xero allow you to link your business accounts and credit cards so every transaction pulls in automatically. This alone takes most of the work off your hands!
All you need to do is categorize your transactions on a consistent basis. I recommend checking in weekly, bi-weekly, or monthly depending on how many expenses you typically have. This doesn’t have to be boring either—Put on some good music, drink a glass of wine or coffee, and spend 15-30 minutes organizing your books. I promise that after just a few times, it will become second nature to you! You can even set automatic “rules” in the software to make things even easier. Soon it’ll practically run on autopilot and you’ll just need to double-check it quickly on a monthly-basis.
Don’t wait until tax season to do this. Seriously!
These tools give you valuable insights into how your business is doing. For example, your Profit & Loss (P&L) clearly shows your business income, business expenses, and the most important number to know - your net income (aka your profit). This number is what you’re actually taxed on.
If this still feels like too much (or you just really don’t like doing it), you can always hire a bookkeeper to handle it for you—either on an hourly or flat-fee basis.
How to Pay Yourself
Let’s assume you’re a sole proprietor (meaning you never formally registered your business with your state), or you’re a single-member LLC/PLLC (common for mental health professionals).
In this case, when you pay yourself, it’s called an owner’s draw (or distribution). All it means is that you’re transferring money from your business account to your personal account. You don’t need to worry about running a payroll, gathering paystubs, or anything complicated. It’s that simple!
When and how much should you pay yourself?
I strongly recommend paying yourself on a regular schedule - weekly, biweekly, or monthly—and follow this basic structure:
- Keep around 2 months’ worth of business expenses in your business checking account.
- Set aside roughly 30% of your net income (income minus expenses—not gross!) for taxes (ideally in a separate savings account).
- Pay yourself from what’s left, while continuing to build your business emergency fund if needed.
S-Corp Side Note:
If your net income consistently exceeds $100k-$150k per year, electing what’s called a “S-Corp status” might seriously benefit you. As an S-Corp, you:
- Pay yourself a "reasonable salary,” which is done via a formal payroll (most use Gusto for this).
- Take extra profit as “distributions.”
It adds some complexity, so always speak with a tax professional or financial advisor before going this route (and so they can help you).
3 Habits That Will Keep You Organized (and Sane)
- Monthly check-ins (15 minutes):
Review your income, expenses, tax savings, and how much you paid yourself. - Annual rate review:
Your experience and business costs go up, your rates should reflect that. - Outsource what drains you:
Whether it’s bookkeeping, taxes, or financial planning—delegate when it makes sense. Your time is better spent serving clients (or relaxing between them).
Final Thoughts
The financial side of running your own practice doesn’t have to be overwhelming, but it does need to be done—and done well, at that!
At Marrone Wealth Management, we help therapists and mental health professionals like you manage all of these different aspects. No jargon. No guesswork. Just real support from someone who gets it.
You don’t have to figure this all out alone—let’s connect when you’re ready.
