Billing Best Practices: When Should I Bill Clients?

GoodTherapy | Billing Best Practices: When Should I Bill Clients?

Billing Best Practices: When Should I Bill Clients? 

For therapists, there are few better professional feelings than opening your own practice.  

Not only do you get to determine the communities you serve, the office you work out of, and your own schedule, but you also get a much bigger slice of the revenue your work brings in. 

Having your own business also enables you to figure out exactly how you want to structure your practice, including what kinds of clients to take on, which insurance providers to work with, and what areas of practice to emphasize. 

Yet at the same time, running your own practice also exposes you to a number of significant challenges. Chief among them? Billing. 

In an ideal world, clients would pay you predictably, and you would never have to track down late payments. Unfortunately, it rarely works out that way. Unless you make it a point to prioritize your billing process, you’re bound to run into billing issues sooner or later.  

To answer the question posed in the headline, there’s no rule that says you need to bill clients on any particular cadence. It is, however, important to bill clients consistently — whether that’s weekly, biweekly, monthly, or even quarterly is up to you.  

Before we take a look at some actionable tips you can use to improve your billing processes, let’s first turn our attention to some of the reasons why successful practices prioritize consistent billing experiences. 

Billing Therapy Clients: 5 Reasons Why Consistency Matters 

While the following list is by no means exhaustive, here are some of the more persuasive reasons why you should do everything you can to deliver a consistent billing experience to your clients.

1. You won’t catch your clients off-guard.

Ever get hit by an unexpected bill in the mail? It’s not the most thrilling experience in the world, to say the least. 

As a therapist, your job is to help clients move past traumas and become the best version of themselves. The last thing you want to do is be the source of stress or grief. 

By billing clients consistently, they will know when to expect bills and how much they’ll have to pay. In other words, no surprises — the way it should be.

2. You’ll avoid the appearance of fraud.

If you’re not in the habit of billing clients consistently, you might fall into the trap of billing them whenever you feel like it. For example, maybe you send a client a bill after two sessions, then after five sessions, then after three sessions. 

With no rhyme or reason to your billing practices, you might raise red flags for credit card companies — or even your clients themselves!  

In most other areas of our lives — whether it’s insurance payments, rent or mortgage expenses, or utility bills — we’re billed once a month, like clockwork. By sticking to a predictable billing cycle, you can avoid the appearance of fraudulent accounting behaviors.

3. You’ll never leave a big pile of invoices on your desk.

As every small business owner knows too well, invoicing can be quite the bittersweet activity. On one hand, you’re getting paid for your work, which is exciting. On the other, if you put the task off long enough, you’ll have to deal with a mountain of paperwork (or tons of emails if you bill electronically), which is probably not on your list of favorite things. 

By building a consistent, repeatable billing system, you can make the process as efficient as possible.

4. You won’t work for free.

The longer you put billing off, the higher the chances you’ll miss charging for  a session or two, and maybe even more.  

While you went into your line of work to help people, you knew this  would also be your job, and you didn’t sign up to work for free. Consistent billing processes significantly reduce the likelihood you’ll forget to bill a client for a session.

5. You’ll have a steady income stream.

Cash flow issues are one of the main reasons small businesses fail, and therapy practices are no exception. After all, you need money to pay your utilities, office expenses, taxes, and any wage expenses you might have. 

Unless you are sitting on a massive pile of cash, you need to bill your clients consistently to avoid cash flow gaps. Generally speaking, the faster you send out invoices, the sooner you’ll get paid.  

By billing at regular intervals, you benefit from a predictable cash flow. This makes it much easier to help your clients to the best of your abilities — instead of worrying about how you’re going to pay next month’s energy bill, for example. 

Now that you have a better idea about why billing clients consistently is the right thing to do, let’s take a look at some of the specific steps you can take to get your billing function in a better place.  

4 Steps to Take Now to Transform Your Practice’s Billing Processes 

Ready to take your practice’s billing process to the next level? Here are four simple steps to make that happen.

1. Change the way you think about billing.

First things first: You need to treat billing as the most critical part of your business, because it is. If your clients don’t pay you promptly, it’s going to be that much harder to fulfill the mission of your practice: helping clients live their best lives. 

If billing’s been an afterthought to date, it’s time to change your mindset and treat it with the importance it deserves.

2. Communicate transparently.

Before you take on a client, it is imperative that they know exactly how much you are charging, whether their insurance covers it, and how much they can expect to be billed for each session.  By outlining your billing processes as early as you can, you reduce the chances there will be any confusion when it comes time to settle the account. 

For the best results, be responsive to client concerns and answer any questions they might have. If you’re planning to raise your fees at any point, communicate those increases well ahead of time.

3. Invest in your billing function.

There’s no rule that says you have to run your billing department yourself just because you own your own practice.  

As your business begins to scale, consider making smart investments in billing to lessen your load. For example, you might decide to hire an accountant, invest in billing software, or even bring in new in-house staff to take care of billing. 

When you don’t have to manage billing yourself, you can bring a clearer mind to each session — and achieve better client outcomes because of it.

4. Set automatic reminders.

You might decide that you like handling billing on your own, and that’s perfectly okay. If you continue with this setup, be sure to set automatic reminders that will let you know that it’s time to send out invoices. 

By doing so, you won’t have to worry about forgetting to bill your clients on time, which improves the client experience while strengthening your cash situation. 

Ready to Upgrade Your Billing Function? 

As a therapist, you went into business to help clients live more rewarding lives — not to crunch numbers and stare at spreadsheets. 

If you’re struggling with billing, look into a practice management solution like Therapy Partner, which gives you all the tools you need to manage your schedule, document each session, and bill your clients with ease.  

For more information on how Therapy Partner can transform your approach to billing and ultimately help your practice get to the next level, check this out. 

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