Do you feel overwhelmed by too many moving parts, too many reports, too many things to track in your private practice? Do you keep missing payment due dates and/or feel sure that many payments owed to you disappear and you never even know? When tax time arrives, are you sure your accountant hates you because you hand over to them a huge, messy pile of receipts, statements, and other assorted piles of paper? Business routines can help you tame the paperwork beast, and here’s your checklist, culled from over a decade of running multiple small businesses, including a Marriage and Family therapy practice.

Routines and Checklists Save Lives and Can Save Your Business Too

Especially when we’re stressed and under time pressure, and when we deal with complicated tasks, we let things slip through the cracks.

In 1935, the B-17 bomber took a demonstration flight. The top pilot flying it forgot to remove wedges that protected its control surfaces while on the ground.

The plane crashed and the pilot died.

This led the US Army Air Corps to introduce its safety checklist for pilots and air crew, dramatically reducing the risk of fatal errors.

Following such pilot checklists became mandatory, helping lead to the incredible safety record of modern aviation – in the nine years between March 2009 and March 2018, almost 100 million US-operated airline flights transported billions of passengers without a single fatality.

Building on that amazing success, the World Health Organization unveiled in 2008 a surgery checklist designed to do the same for the 230 million major surgeries done annually worldwide, where millions of patients suffer infections and other preventable issues, and over a million die.

This follows a 2006 study by a Johns Hopkins anesthesiologist and critical care physician. He studied a specific type of surgery, inserting a central line, at 100 Michigan hospitals. He found that 30% of the time, surgical teams skipped at least one of five essential steps. Implementing a surgery checklist reduced the infection rate from 4% to zero, saving 1500 lives and almost $200 million.

On a much more mundane level, imagine being a high school student who forgot to bring his homework or even comb his hair. While not a life-or-death situation, it could lead the teen to wish he was dead to avoid the shame.

That was me 40 years ago.

When I was in high school, I created a morning checklist for myself. Each morning, I’d count out each completed mini-task: Brush teeth? Check! Shave? Check! Books and homework in bag? Check! etc. Dorky as it may sound, that way I knew I wouldn’t forget anything.

The same is true in business. If you put off taking care of things, or if you count on your memory to finish complex tasks, you will likely forget something, with potentially severe consequences – think eviction from your office if you keep forgetting to pay your rent on time. Even if you’re only a few days late, your landlord may decide dealing with you as a renter is too much of a hassle and refuse to renew your lease.

In addition, things pile up to the point that it seems more and more overwhelming to even try to get them done.

Keep the Lifeblood of Your Practice Flowing – Invoicing and Billing

You want to do two things in your practice – help clients and get paid. To simplify the latter for our businesses, we avoid the need for invoicing wherever we can.

My wife Risa’s clients pay at the end of each session, so no billing or invoicing is needed there.

My coaching clients submit their monthly payment before the first call of a month. If they forget, I ask them to send a PayPal payment before I call. To date, I’ve never had to reschedule a call.

My office renters need to pay their rent by the first of each month. Occasionally, some forget, in which case I use a renter checklist to keep track of who didn’t pay, and email a reminder. If they’re late more than once, I ask them to send me post-dated checks for several months.

My consulting business is the only one where monthly billing is required. To take care of this, I set up a spreadsheet where I record how many hours I work each month for each client, sending an invoice as soon as I work the last hour expected that month.

The Path to Financial Success – Recording Income and Expenses

As they say, it isn’t about what you make, it’s about what you keep. As business owners, we need to keep track of money coming in (income) and flowing out (expenses).

There are many software tools and apps you could use for this, but I’m most comfortable with Quicken Home, Business & Rental Property to track our income, business expenses, and personal expenses.

When I record a transaction, I categorize it on the spot. When I finish recording transactions, I download from all credit cards, checking and savings accounts, investment accounts, etc. and reconcile with what I recorded.

I do this at least weekly, taking about 15 minutes. That way I don’t need to carve out many hours to deal with a pile of receipts and deposited checks (sometimes that’s unavoidable, like when I return from a long trip; to use a highly technical term, when that happens it sucks).

Risa and her employees enter into the practice EHR system all payments received from clients. This lets her easily identify those rare cases where a payment wasn’t made in full at the end of a session.

Is Your Merchant Services Provider Serving You Well?

Ronald Reagan is quoted as having said of Soviet Russia’s participation in nuclear treaties that he would, “Trust, but verify.” I feel the same way about merchant card services providers.

Periodically, I review their daily emails and compare them to what shows up in the practice’s checking account.

I also look at the ratio between the monthly fees they charge the practice and how much clients paid with their cards, to verify that our fees haven’t gone up.

To date, I’ve yet to find a payment that didn’t show up, but I did find that they had gradually increased their fees from less than 3% to more than 4%. A quick phone call suggesting we’d go to a competitor was all it took to save us thousands of dollars.

Stay Out of Jail – Pay Your (Estimated Quarterly) Taxes

In the 1930s, law enforcement couldn’t convict gangster Al Capone for the numerous murders and other violent crimes for which he was responsible. Failing that, they sent him to jail for tax evasion.

Beyond helping you stay out of jail, paying taxes is doing our share of providing for national defense, building and maintaining highways and bridges, etc.

Each quarter, I update our accountant how much each of our businesses brought in, how much was spent, and project those to the end of the current tax year (see below how I project that). Then, I ask her how much estimated taxes I need to send the IRS and our state’s comptroller.

The Basis of Making a Difference and Making a Living – Client Enquiries and Conversion

The only way you can make a difference is to have clients come through your door.

Each month, I tally up how many enquiries came in to Risa’s practice, whether by phone, email, or text; and how many of those came in for a first appointment. The ratio between the latter and the former is our conversion ratio. The higher it is, the more effective was our receptionist, earning her a bonus.

If either enquiries or conversions drop, it’s time to figure out why and do something about it.

You Can’t Help Them if They don’t Come Back – Client Retention

Each quarter, I look at how many clients each therapist in the practice saw, how many of those clients came back after that first appointment, and what was the average number of sessions for each client who completed therapy.

This shows us if any therapist is having trouble retaining clients, in which case Risa can talk with her to figure out what’s going on and how to address any issues.

When therapists routinely lose half of their new clients, you’re wasting marketing dollars, and worse, you’re failing to help those clients. Were that to happen with one of Risa’s associates, she’d help them figure out why and how to fix it. If they can’t fix it, they’d need to be let go.

If You Don’t Measure and Track It, How Would You Even Know If It Needs Fixing?

Each month, I tally up our income by business, our expenses by category (for each business and our personal expenses), and our investments. I then compare these to my projections, looking for anything unexpected.

Costs could go up (e.g., our individual-market health insurance premiums kept increasing by double-digits each year), or a one-time expense like a big car repair shows up.

When this happens, I check for impacts on our long-term plans, and if and where needed, try to change the plan to compensate and keep us on track.

Extra-Credit Exercise for Crazies Like Me

Then there are “extra-credit” things only a numbers junkie like me would even consider doing, like projecting how many hours we’ll work per month for the next decade, how much income that would bring in, how much we’d have to pay in taxes, and what of all that would be spent or invested.

This isn’t intended to be accurate even to the nearest $10,000, just to give us a general sense of where we may end up absent a major change, and what we’ll need to do to get there.

The Results

There you have it. All the things I track, including those that show how over-the-top I get with it :). Call me crazy, but doing all this helped us increase our net worth 7x faster in eight years of self-employment than in 16 preceding years of salaries.

So, what business routines have you been following? Please share in the Comments section. If none, drop me an email or send me a message through my Contact page so we can set up a free, no-strings-attached 20’ coaching call to see if my business coaching services can help.