Do you enjoy or dread managing your practice’s books? When should you work with a financial professional about your taxes? How can you use the Profit First principles to manage your money better?
In this podcast episode, Whitney Owens speaks with Julie Herres about using Profit First in your practice.
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Meet Julie Herres
In This Podcast
- Money tips for new solo practice owners
- Managing the money of a mid-sized practice
- The Profit First principles
- Julie’s advice to Christian counselors
Money tips for new solo practice owners
Even though it is standard to bootstrap expenses at the beginning of any new business venture, it is still recommended to work with a financial professional, especially at the beginning of tax season.
You don’t know what you don’t know. There’s a lot of complexity to taxes when you have a business, so at the very minimum, I recommend [working with a financial professional]. (Julie Herres)
In some cases, practice owners enjoy doing their bookkeeping as a hobby and also as a way to save money.
However, if you do not have the time or the energy to deal with the books, a specialist at Green Oak Accounting can take that over for you as well.
Payroll adds a new level of complications. There are a lot of little things that can go wrong … [and] things that you might need advice on, and to have a relationship with someone who knows your financial situation and who can talk through some of these situations with you … can be helpful for practice owners. (Julie Herres)
Managing the money of a mid-sized practice
In the 10 – 15 clinician range, practice owners tend to be intentional with their time and realistic about what they need help with.
With the increase in revenue, more things can go right and wrong. However, with an increase in income, there is a bigger scope for financial and goal planning to be done.
The Profit First principles
The main principle behind Profit First is that business owners pay themselves a percentage of income at the beginning of each month.
The second main principle is that business owners are encouraged to manage their cash flow better by using a variety of bank accounts, instead of one big one.
Some of the core principles of Profit First are that we are going to use … smaller bank accounts and [pay] them in a sequence [of] allocating for profit, then taxes, then [everything else the business needs], and we remove temptation in the sense that the tax money is not ours to spend. (Julie Herres)
The third principle of Profit First is that once the money has been allocated to its specialized bank account, it cannot be used for something else.
This also helps you to learn where your business is doing well, where you can do better, and where the problems can be solved.
Julie’s advice to Christian counselors
Having a profitable practice makes everything easier. You owe it to yourself and to your community to have a profitable practice.
Books mentioned in this episode:
Useful links mentioned in this episode:
- Visit GreenOak Accounting and connect with them on Instagram and LinkedIn
- Listen to the Therapy for Your Money podcast
- Check out this ratio tool and money allocation pie chart for your business
- Julie Herres on How to Save Money in Your Practice | FP 60
- Join the Faith in Practice Conference from April 21st to 24th
- Take Faith in Practice further with the Mastermind Course
- Join the Faith in Practice Facebook Group and subscribe to the email list
- Email Whitney: [email protected]
- Use promo code ‘JOE’ to get three free months to try out TherapyNotes, no strings attached, and remember, telehealth is included with every subscription, free.
- The Christian DISC® is a personality assessment that divides personality into four types and integrates insight from scripture and emotional intelligence. Use promo code FAITHINPRACTICE to receive a 50% discount.
Check out these additional resources:
- Shrink Think is Saving Therapists Time and Money, with Aaron Potratz and Nathan Hawkins | FP 130
- Next Level Practice
- Practice of the Practice Podcast Network
- Group Practice Boss
Meet Whitney Owens
Whitney is a licensed professional counselor and owns a growing group practice in Savannah, Georgia. Along with a wealth of experience managing a practice, she also has an extensive history working in a variety of clinical and religious settings, allowing her to specialize in consulting for faith-based practices and those wanting to connect with religious organizations.
Knowing the pains and difficulties surrounding building a private practice, she started this podcast to help clinicians start, grow, and scale a faith-based practice. She has learned how to start and grow a successful practice that adheres to her own faith and values. And as a private practice consultant, she has helped many clinicians do the same.
Thanks For Listening!
If you’re a faith-based counselor, who’s looking for more resources to use with your clients, The Christian DISC is a spiritually integrated personality assessment. The assessment provides four main personality types and integrates insight from scripture and emotional intelligence. The model behind the Christian DISC is ideal for individuals, couples, and groups, and is specifically designed for use in the faith-based counseling, coaching and ministry. If you would like to try out the assessment for yourself, go to christianpersonalitytest.com. Enter the promo code FAITHINPRACTICE, all caps, all one word, and you will get 50% off this assessment. So you can go to christianpersonalitytest.com and enter the promo code, FAITHINPRACTICE.
Welcome to the Faith in Practice podcast. I’m your host Whitney Owens recording live from Savannah, Georgia. I’m a licensed professional counselor, group practice owner, and private practice consultant. Each week through personal story or amazing interviews, I will help you learn how to start, grow and scale your practice from a faith-based perspective. I will show you how to have an awesome faith-based practice without being cheesy or fake. You too can have a successful practice, make lots of money, and be true to yourself.
Hello friends, thanks for hanging out with me today on the Faith in Practice podcast. Looking forward to sharing with you about my friend, Julie Herres, who is the owner of Green Oak Accounting. She’s going to share lots of tips about your money, being a business owner and how to have growth. But before we jump into the episode I’ve been thinking a lot as we’re in this season of letting go of ourselves, letting go of who we are and finding God. Our business really speaks to this part of us because really, it’s like our baby. We pour ourselves into it. We have a vision, we have a purpose we want to do God’s work in the world, but at the same time, we live in a fallen place and stuff happens all the time.
So, as we are in this season really of lent of setting ourselves aside, letting go. I just, myself am challenged and want to challenge you to think about how are you putting maybe too much of yourself into your business? Where are the things that you need to let go of so that you can care for yourself or so that you can find God more. We get so distracted or we have our own plan, a plan of this is what the business has to look like, or this is what my highlight has to look like. It’s in that place of serenity and letting go. That’s when we really get the vision, that’s when we really find God in what we’re doing.
So I wanted to just get that out there because. This is something that’s been on my heart on my mind the past few weeks as myself, I’ve been going through a lot of transitions with work or with my husband’s work and trying to just sort through where is God and where is God moving? Even when I was approaching lent, I was thinking through, okay, what is it that I want to do for lent? Or what is it I want to add into my life? Maybe I added a devotion at noon or I added a prayer time and I just really had this sense of like, what do I need to let go of to find more of God? I started thinking more about, oh, well I have to pick the kids up for school or I have to go to work, or I have to do these things, which is true, I’m an adult and I have to do those things. But it’s a mindset change. It’s what can I mentally let go of? How can I mentally surrender so that I can hear God’s voice more in my life?
So take that with you. Think through it. I am definitely thinking through it and haven’t figured it out yet and will continue to be on this journey with you. But I love this podcast because not only are we talking business, but we can bring in some of these spiritual components because we are spiritually whole people, a2nd this is who we are, and it really is going to influence our business and the way that we roll in our business. So I think it’s important that we go back and that we address those things.
But I want to also tell you a little bit about Julie and about her work. Like I said, she is the owner of Green Oak Accounting. She’s an accountant herself. Then Green Oak is a firm that specializes in working with therapists, psychologists, and counselors in private practice. They do bookkeeping, tax, CFO services for clients, as well as implement Profit First, if you’re looking for that with support from the team., They have worked with hundreds of practice owners throughout the US to help them reach their financial goals. I can only say that I hear fantastic things about Green Oak. I refer them plenty of clients who go and work with them and have a great experience.
So I do support the people that I believe in and the work that they’re doing, and definitely believe in the work that Green Oak’s doing. It’s super easy to get connected to them. You just go to their website and hit a button to set up a free consult and you just fill the little form out, takes just a second. So if it’s something you’ve been thinking about for a while, like really it takes 30 seconds. Just jump on their website and fill it out and get connected with them. Then they’re also going to be sponsoring the Faith in Practice Conference. I have not met Julie in person yet, but all of my friends that have speak so highly of her. I’m looking forward to hanging out with her and Sarah in person. Sarah also works for Green Oak I think that’s about it. So we’re going to get into the episode here. This is episode 131 Julie Herres on using Profit First in your practice. Today on the Faith in Practice podcast I have my friend Julie Herres here with me. How are you, Julie?
Hey, good to see you, Whitney.
Awesome. So I’ve had Julie on the show, I believe it was the end of 2020, if I’m remembering correctly. We talked about ways to save on your taxes. It was a wonderful episode, always good. Then today we’re going to talk more, probably we’ll mention taxes, but we’re also going to talk a little bit more about managing money within your private practice. Julie is the owner of Green Oak Accounting, which specifically works with therapists in helping with taxes, but also in the money management, forecasting and all those good things in private practice. So, Julie, why don’t you first share if no one’s met you before a little bit about yourself and how you got into creating Green Oak.
So I’m Julie Harris. I’m the owner of Green Oak Accounting. I also host Therapy for Your Money podcast. So at Green Oak Accounting, we specifically work with the mental health industry and we provide bookkeeping, accounting, CFO services, as well as tax, some tax planning, all of the accounting suite services for mental health. Because we’re so specific in who we work with, we’re able to be trusted advisors in a way that most accounting firms just can’t because they don’t have the data. We know what works and what doesn’t work within the industry so we’re able to advise in just a deeper level because of how specialized we are.
Yes, I definitely think that’s what set Green Oak apart in my mind from other accountants in the area, because how private practice works. So let’s go through a little bit of the different phases where practice owners might be, who are listening so you can speak to each of those. If somebody is in their first few years, maybe they’re a solo practice owner what should they be thinking about in regards to money? Then how would like working with Green Oak be helpful for them?
For a solo practice owner time is of the essence. There’s a lot of things that often have to be bootstrapped just because like that’s the nature of starting a business. I always think at a minimum it’s a good idea to work with a professional for your tax preparation, even when you’re a solo practice owner, just because you don’t know what you don’t know. There’s a lot more complexity to taxes when you have a business. So at a very minimum, I recommend that, but in some cases you might enjoy or want to do your own bookkeeping and that’s perfectly okay. That’s one area that you can save money. There are plenty of practices, though, that are solo that say, I don’t want to handle this. This is not my area of expertise and I’m too busy. They just want to throw us the keys and we take care of it and that’s perfectly okay. But if it’s an area that solo practice owners enjoy, definitely okay for them to keep doing the books and just meet with our tax prepare as needed.
I love that you said that one of the common questions I get when it comes to bookkeeping is when do I hire out for this? I say little what you were mentioning, like if you love doing it, keep doing it. I mean, when I was a solo practice owner, I loved managing my books. I loved money. I probably could have been an accountant in a different life, but I love numbers. I think they’re fun. Of course then I became a group practice and it became too much, but so if people love doing it, they should just keep doing it. Obviously they should research and have an accountant that they speak to get help with that but if they don’t like it, that that’s perfectly fine. If you’ve got the money, go ahead and get an expert to do it. You just need, I mean really only a couple of clients to make up for that time. So let’s spend time doing the work that we love instead of the work that we don’t love.
Often someone else is able to do it often better, definitely faster than a practice owner when that’s not your area of expertise. So you might have to see one or two more clients to pay for it, but then you’re not spending four hours on the Saturday doing the bookkeeping. That tends to be the trade-off. I always say like when you’re getting busy enough that you don’t have space for more clients because you’re having to do all this other stuff, then it’s time to pick some things on your to-do list to give away. That might be a website, that might be some marketing activities, that might be bookkeeping. Whatever you enjoy the least, that’s the thing to take off your plate.
That’s a great way to present it. I like that. All right, let’s say somebody is hiring clinicians. Maybe they have a smaller group practice. What would be some things for them to consider with accounting and bookkeeping and how Green Oak could be helpful?
Yes, well, I think at the group practice level, it definitely makes sense to work with a professional even on the bookkeeping side because there’s not only bookkeeping. There’s usually going to be some payroll as well. If you have contractors, it might be a little less complicated, but payroll adds a new level of complication. There’s a lot of little things that can go wrong, notices, compensation planning, maybe benefits, profit sharing. There’s a lot of things that you might need advice on and to have a relationship with someone who knows your financial situation and who can help just talk through some of these situations with you. I find that that can be really, really helpful for practice owners.
Yes. Then how about some of the larger group practices? Let’s say somebody’s listening and they have 10, 15 clinicians in their practice. Obviously having a bookkeeper would be very important then, but sounds like Green Oak has some services even beyond that that would be helpful.
So at that point, usually in the 10 to 15 clinician range, the owner is typically very intentional about only doing things that just they can do, being intentional about, I’m only doing the things that move the needle the most and that bookkeeping is not one of them at that point. But then there’s usually just a lot more revenue coming in as well. So there’s more opportunity for things to go really well and wrong, so as far as casual planning, building and reserves, planning for the future, for growth for expansion, but there can also be more opportunities for tax planning as well when you are earning higher numbers of just higher profit and have more disposable cash available.
That’s so important. I think one of the things I love about Green Oak is the ability to do that forecasting for practice owners, because there is a lot. I mean, when you grow, you’re thinking about buildings and you’re thinking about promotions and do I need a clinical director and do I have money for that? What do I pay this person? So Green Oak can help with some of those decisions, is that right?
Yes, absolutely. A forecast is basically always going to be wrong. We try to pull out our crystal ball and look into the future, but it’s still helpful to be able to make assumptions and say, if this happens, what do we think is going to happen and then plan that out because there are a lot of metrics and data that we do have. You can say, well, if this is our average revenue procession and we grow by 50 sessions per month, where does that bring us at the end of the year, for example? We have some of that data. So then we can say, okay, what if we add a clinical director, what does our monthly revenue need to be to sustain that position?
There’s a lot of different pieces that we can help look at. I know from experience for a lot of practice owners, that’s a little bit overwhelming to work through that exercise because they’re not typically very financially minded. So just to have, like put something together and say, okay, let’s talk through these assumptions. What does it look like? Is this realistic? That is something that business owners are really used to doing. They’re good at that.
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So one of the other add-ons that Green Oak offers is Profit First which was a book by Mike Michalowicz. Time just leaves me. Sometimes I feel like it was three years ago. I’m sure it’s way longer in that. It’s a book that’s influenced the way that I run my business and I know the way that you work with your clients. So could you share if, say someone’s listening, they don’t know what Profit First is at all, maybe share with us the concept, and then we can talk about how people can use it in their business.
So Profit First is an amazing book. I want to say 2014 is when it came out. So it’s been a minute now. But the whole premise is that as a business owner, you have to take your Profit First. If we look at Parkinson’s law, it says that we will use all the resources available to us, including time and money. I know I’ve been guilty of this. If I’ve got four hours to do something, it’ll take four hours. If I’ve only got one hour to do it, it’ll take one hour. But Mike uses the example of the tube of toothpaste often. When you’ve got a brand new tube of toothpaste, and it’s full, you’re just laying it on there but when you’re at the very end and there’s just a little bit left, man, you’re going to squeeze that thing, everything you can out of there before you have to pull out another tube of toothpaste.
So if we use that same principle in our business, we use small plates in the form of small bank account or many bank accounts in order to manage our cash flow. So if you also look at nutritional science, if you eat from a smaller plate, you’re going to eat less food. I’m not a nutritional expert, but that does tend to be true. We do the same with our bank accounts. If we see one big bank account and we see there’s plenty of money in there it’s like, okay, let’s go spend some money. What are we going to buy today? But if we see several smaller bank accounts that are earmarked for various items, then we trick our minds into spending less because we know what we have available for operating expenses, or we know what we have available for payroll. We work within those guidelines.
Some of the core principles of Profit First are that we are going to use smaller plates or smaller bank accounts. We’re going to serve in the sequence. So we’re going to allocate for profit. We’re going to allocate for tax. We’re going to allocate for all of the different things that the business needs and we remove temptation in the sense that that tax money’s really not ours to spend. So if we’re removing it, we’re moving it somewhere else. It’s earmarked tax. Some our clients’ ear market Uncle Sam’s money. You’re not going to touch it because it’s out of the way. It’s not a temptation.
Then we enforce a rhythm. That means we’re going to be doing the exercise and moving money from the various bank accounts on a regular basis; so either every month, every two weeks, every week, depending on the situation of the business. We’re doing that with a rhythm so we always know when the money is moving. That principle itself, it really, really helps us uncover issues in the business. It really brings it up to life where things are going well and where things are not going well in the way that all the money piling into one bank account cannot.
Definitely, I have loved it. Obviously I talk about the Enneagram all the time on the show. I’m Enneagram one, and I love rules. I like the boxes. I like for things to organize. So that’s what I love about Profit First is the money can go to the accounts. I don’t have to worry. I like that I can see the problems easily, and I can always know that I’ve got the money for what I need and that my money’s going to good places. The other thing I love that you’ve presented at conferences is the pie chart about having a group practice and where your money goes. I know we didn’t talk about saying this in advance. I don’t know if you have it there or remember exactly what it is, but I love those numbers that you present. I think having the different accounts also helps me in seeing all that.
Yes, so that, the pie track that you’re referring to is available on our website, on the podcast website. So if you go to therapyforyourmoney.com in our resources section, you can, that is a download that that listeners can get. But yes, because we’re moving money in various bank accounts, so to catch listeners up those bank accounts, the basic ones are going to be your income account. All the cash gets deposited there, that we’re going to have a profit account. That’s for you as the shareholder of the business. We’re going to have the tax account so the business can pay taxes on your behalf. Then typically we have at least payroll in the case of group practice and OPEX, which is operating expenses. So as you move money each week, for example, to each of those accounts then you’re seeing, is there enough money in this operating expenses account to pay for all the things that we need?
Is there enough money for rent, to pay the credit card bill, to pay the janitorial vendors? Like all of the different things that are coming up. Is there enough money in there to pay for those? If there’s not something is going on. We can have to go back to the allocations and look at how the money is being split again. It’s very normal at various points of growth for the numbers to change and have to just go to the beginning and recalculate. But you can really see what’s going on in the business. Same thing happens often with payroll where a payroll account always had enough money and then all of a sudden it doesn’t anymore. We can say, okay, what’s going on? Are we too heavy in one in admin? Do we add a clinical director too soon? How can we move things around to make this work again?
Yes, that’s great. All right. Let’s say somebody’s listening and they’re thinking, gosh, I would love for Green Oak to get involved in my finances. I need some help here. What can they do to connect with you?
Very easy. If you go to greenoakaccounting.com, there is a scheduled consultation button. You can always schedule a free consultation. It’s no pressure situation to find out about our services and if it might be a good fit for you and your practice.
Yes. I’ve done that even myself. One of the great things is you’ve got somebody that can hear where you’re coming from and say, okay, here, you have lots of packages available. I love that because practice owners are at different places. So you have someone who can really specify, okay, this package would be good for you for this reason, or this would be another solution for you. I love that there’s a lot of options there for people at any phase in practice growth.
Thank you. And Profit First support is something that we add to all of our packages. So it can be really helpful if you’ve read Profit First and you like the book and you want to implement it. Sometimes it’s a little daunting. It feels like standing at the bottom of a mountain, but that’s something that we do often. So we can add that support in where we help with getting all the allocation set up on the front end, but also that biweekly support too, with here are the numbers, here’s the calculations, here are the transfer amounts. We’re really taking all of the work out of implementation.
Yes, definitely. Now Julie, Green Oak is one of the sponsors at the Faith in Practice Conference. We are recording here on February 23rd, so we have passed the two month mark. I’m thrilled thinking about it. So if you could tell me a little bit about the sponsorship or maybe a little bit about what you’re going to be sharing at the conference in your talk?
Yes, I’m so excited to be participating. I will be going into way, way, way more detail about Profit First, all the benefits to your practice and then some implementation tips as well. So we’ll go into a lot more detail. If you’ve thought about the book or read some of the book and just want to get a lot more information that’s going to be the place to be.
Great. Then you’re going to be bringing Sarah along with you, correct?
I will. Yes, exactly.
So Sarah is the, you’re going to be able to say this, just explain, I’m about to explain it and botch it. Can you tell me what is her role again? What’s the title? Tell people a little bit about what she does.
So Sarah Riley is our business development person on the team. If you’re scheduling a consultation, you are meeting with Sarah and she is the loveliest, bubbliest person ever. She loves, loves, loves to chat, and she is a very good listener. She’ll listen in on, she wants to know where your practice is, what’s going on in the business and what challenges you’re facing. Then she’s really well placed to make a great recommendation on what type of services would be best for you? So we love having her and so you’ll also get to meet her at Faith in Practice if anyone is attending.
Would she be available if people were interested in talking to her about packages and maybe even signing up? Would she be available to talk to them about that?
That’s awesome. Wonderful. Well, I’m looking forward to it and I know that listeners have heard a lot about it, but if you’re here in this episode for the first time then know that the Faith in Practice Conference is on Jekyll Island, April 21st through the 24th. We have, I don’t know, 20 plus speakers. It’s going to be a fantastic event specifically for faith-based practice owners. So Julie, I’m looking forward to seeing you there. Then as we look into wrapping up our episode today, I want to ask you the question I ask everyone on the show, what does every Christian counselor need to know?
I would say that having a profitable practice makes everything easier; hiring, paying yourself, taking care of your family, your community, but also giving. So you owe it to yourself and to your community to have a profitable practice.
That’s so true. Unfortunately, I think in a lot of Christian circles, people feel like they shouldn’t make money or they feel guilty for making money. Just the way you presented it there it’s like, actually, no, if we make money, we can serve the community better. We can care for our families better and we can give more to charitable organizations. So there’s so much that’s important in that, and it’s okay to be profitable so that you can do those things in your community.
There’s nothing selfish about being able to take care of your team and making sure that they get paid next pay period. There’s nothing selfish about that.
My team says the same thing. Well, thank you so much for taking the time to be here. Then everyone can meet Julie in person at the Faith in Practice Conference in April.
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