ACCOUNTING AND CRM SOFTWARE FOR YOUR PSYCHOLOGY BUSINESS

The major types of software you will need for your psychology business are Accounting software and Customer Relationship Management (CRM) software(which often includes management of Electronic Health Records.) 

Accounting software

Bookkeeping, that is keeping track of money going in and out, is a critical component of running a successful business. 

Keeping accurate financial records allows you to make informed business decisions and to plan ahead.

Sole Trader with no staff

If you are a sole trader with no employees then the Excel spreadsheet I’ve designed for psychologists will be sufficient to keep track of your business income and expenses. (you can find this on our website or email us if you require one) It’s nothing fancy, just simple and straightforward to use. When filled in correctly, it will have enough information for you or your bookkeeper to prepare your BAS statement each quarter and for your accountant to do your yearly tax return.

A Business with employees

If you start to expand your business and employ a staff member, things become more complicated, and our simple spreadsheet won’t be suitable.   

If you have any employees at all the Australian Tax Office (ATO) requires the use of an accredited accounting software programme to process the payroll. This software has what is known as a Single Touch Payroll System which automatically transfers information about your employee’s salaries and wages, superannuation contributions and Pay as you go (PAYG) tax to the ATO every time payroll is prepared.

Accounting Programmes

The two main accounting programmes psychologists in business choose are XERO and MYOB.

Both meet the requirements of the ATO and both are cloud-based, meaning all you need is an internet connection and your password to access your business record-keeping from your device. You can also invite your accountant or bookkeeper to view your accounts in real-time and there are automatic software updates and backups, so your data is always up-to-date and secure.

Over time, from an objective standpoint, we’ve found the accounting programme XERO to be the superior software in general and I recommend it for psychologist clients. It can also integrate with many of the CRM software programmes.

Customer Relationship Management Software

Customer Relationship Management Software (CRM) is software technology for managing all your business' relationships and interactions with clients. 

As a psychologist it can help you handle bookings, appointment reminders and issue invoices and receipts. Some CRM also store client records and notes.

The practice you’re working with may already have a CRM set up which you can use.

If you need to choose a CRM, you’ll find that the popular programmes for psychologists inlcude Zanda (formerly Power Diary), Halaxy, Cliniko and Core. 

Many CRM programmes are able to keep track of expenses, however from experience we’ve found Accounting software and Customer Relationship Management Software work best separately.

We recommend our clients use the accounting programme as the primary bookkeeping software to keep track of expenses, payroll processing and preparation of GST/Business Activity Statements. 

There are several reasons for this. Firstly, a CRM was not specifically built to be used for accounting, and as a result the expenses function is usually clunky and difficult to use.  In addition, the expenses function usually does not provide enough checks and balances to be able to get the information necessary for your quarterly GST return and Business Activity Statement.  Most importantly, if you have employees, CRM programmes do not have the Single Touch Payroll function I mentioned above and are therefore not accredited with the ATO to do Payroll. 

For revenue, we recommend our clients CRM software to issue invoices to clients because all the client details needed for the invoice (such as name, address, practitioner details, appointment date, and services provided) will be readily available in the CRM. Recreating this information in your accounting programme is unnecessary duplication.

We also recommend our clients use CRM software to record receipts from clients since all invoicing will be in the CRM.

The client will pay the money into your bank account and your accounting programme will pick up this payment, because the accounting programme will be integrated with your bank account and the payment can be recorded as revenue.

For your business, revenue or income is only recognised when it hits your bank account. At the end of each quarter, you (or your bookkeeper) will do a reconciliation between the income/cash receipts on your CRM and the cash receipts in your bank and accounting programme and make sure the numbers match.

Your CRM will be able to track your invoices, so it simple to quickly identify any outstanding invoices from clients.  

It is possible to link a CRM system with an accounting programme and on the surface, integrating the two sounds like a good idea. However, through hard-won experience I’ve found this actually causes unnecessary complications, especially since any errors made in the CRM will replicated in the accounting software.

As you can see, both types of software - CRM and accounting - play separate, essential roles in your business.

Choosing the Right CRM for Your Psychology Practice

I’ve made a table, listing the important considerations when choosing aCRM. 

I recommend taking your time and doing your research. This will help you understand your options clearly and you’ll feel confident in your decision.  

Compare the features from the table to find the best CRM for your business,  and if possible, take a free trial to see how well it suits you and your business.CLICK HERE for the table