Starting a Therapy Practice – a Ten Point Plan
Ray Pembroke, Chartered Accountant, of Pembroke & Pembroke, Kilkenny, has some sage advice for those starting their own practice:
“So you have decided to set up as a Self Employed Therapist. In order that you can build a successful and viable Practice I would recommend that you follow this 10 Point Plan:-
- Engage the services of a Qualified Accountant who has been recommended to you by another Self Employed person to advise on the set up of your business, which in most cases will be as a Sole Trader.
- With the assistance of the Accountant prepare a Simple Business Plan and Cash Flow Projection for at least one year. If the Business Plan does not indicate a viable Business maybe you might reconsider whether you should proceed to become Self Employed.
- Having decided that you are going to be viable then proceed to install a good basic Bookkeeping package in your business that you understand and can operate. There are many packages out there and the one I find most user friendly is the “Big Red Book” software. www.bigredbook.com
- Check with your Accountant whether you need to register for VAT and arrange with the Accountant to get your Self Employed Registration with the Tax Office for Income Tax, VAT (if necessary) and PAYE/PRSI/USC if you are going to take on Staff. Get the assistance of your Accountant to show you how to operate and pay these Taxes. Register for ROS Online with Revenue.
- Decide on your Accounting Year End Date and maintain your records on a weekly basis and have your annual Accounts prepared as soon as possible after the year end date so you can assess as early as possible the performance of your business and your Income Tax/PRSI/USC liability.
- Decide on a Bank to operate your Business account with and agree an Overdraft Facility or Term Loan based on your Cash Flow Projection. You may have to provide security to the Bank, but, you will have to provide a lot of detailed information on your Background, Business Plan and Cash Flow before they will agree a Facility for you. Be prepared for a lengthy engagement with your Bank to get set up.
- Keep a daily Diary of all client appointments/visits and link it to your Cash Receipts Book. Revenue will look to see that the entries in the Diary reconcile to your Cash Book.
- Pay your expenses as much as possible by cheque or direct transfer to enable the easy completion of your Cheque Payments Book.
- The expenses you claim are all those that are reasonably incurred for the furtherance of your business. The most common expenses for this type of Practice are Rent, Rates, General Insurance, Professional Supervision, Professional Indemnity Insurance, Training Courses, Professional Subscriptions, Bank interest and Hire Purchase charges, Telephone, Light and Heat, Motor expenses (if you visit Clients), Consumable Materials, Accountants Fees, Stationery, Advertising, and if you employ Staff the Wages (i.e., Receptionist) and Employer PRSI.
- Pay your Taxes on time. VAT and PAYE/PRSI/USC have different dates for payment which your Accountant will advise you when to pay. Income Tax is paid on the 31st of October and this is also the filing date for your Personal Income Tax Return. Your first Income Tax Return will be filed in the Tax Year after the year in which you start your Business. Get your books and records to your Accountant as early as possible after your Year End with a view to getting an estimate of what you will have to pay on the 31st of October.
If you keep this template in your Diary and take steps to follow it you will be on the road to running a successful Practice and a hassle free one with Revenue.