Accurate bookkeeping is an absolute necessity for every successful chiropractic practice. It’s not the most glamorous task, but maintaining accurate financial records is essential for understanding your practice's financial health, making informed business decisions, and staying compliant with tax regulations.

The big question is: Should you handle your bookkeeping yourself, or is it better to outsource to a professional? The answer depends on several factors, including your budget, time, and business goals. In this post, we’ll dive deeper into the pros and cons of DIY and outsourced bookkeeping and help you decide which option suits your chiropractic practice best.

Why Bookkeeping Matters for Chiropractors

Bookkeeping is more than just tracking income and expenses. It’s the foundation of a solid financial strategy that allows you to:

• Make data-driven decisions for growing your practice.
• Ensure compliance with tax laws and avoid costly penalties.
• Have a clear, accurate picture of your financial health.

Without proper bookkeeping, you’re essentially flying blind, relying on bank balances instead of comprehensive reports to gauge your practice’s performance.

DIY Bookkeeping

What Is It?
DIY bookkeeping means you’re responsible for tracking, categorizing, and organizing all your financial transactions. Ideally, you’ll be doing this in a cloud-based accounting software like QuickBooks Online which is what I recommend. (You can check out my affiliate link here for a discount).

Pros of DIY Bookkeeping:

1. Cost Savings:
   DIY bookkeeping can save you hundreds of dollars each month, especially in the early stages of your practice. You’ll only need to cover software costs, which are significantly lower than outsourcing fees.
2. Financial Awareness:
   Managing your own books forces you to look closely at your finances. You’ll develop a deeper understanding of your income, expenses, and cash flow.
3. Control:
   DIY bookkeeping gives you complete control over your financial records. You’ll know exactly where your money is going and can quickly identify errors or potential fraud.

Cons of DIY Bookkeeping:

1. Time-Consuming:
   Bookkeeping takes time—time you might prefer to spend with patients or growing your practice. Falling behind can create a snowball effect, leaving you scrambling to catch up.
2. Steep Learning Curve:
   Accounting basics can be tricky to master. Misclassifying transactions or failing to reconcile accounts properly can lead to costly mistakes as well as working with inaccurate numbers throughout the year.
3. Risk of Burnout:
   Balancing patient care, admin tasks, and bookkeeping can overwhelm even the most organized chiropractor.

Outsourced Bookkeeping

What Is It?
Outsourcing bookkeeping involves hiring a professional bookkeeper or bookkeeping service to handle your financial records. They ensure accuracy, generate monthly reports, and help you stay compliant with tax regulations.

Pros of Outsourced Bookkeeping:

1. Expertise:
   A professional bookkeeper—especially one who specializes in chiropractic practices—has the skills and knowledge to manage your finances accurately and efficiently. This can and will bring you peace of mind that your bookkeeping is being done the way it should and in a timely manner!
2. Time Savings:
   Outsourcing frees you to focus on what you do best: caring for your patients and growing your practice.
3. Scalability:
   As your practice grows, a professional bookkeeper can handle the increased complexity of your finances, including payroll, loans, and tax filings.

Cons of Outsourced Bookkeeping:

1. Cost:
   Hiring a bookkeeper typically costs between $350 and $500 per month, depending on your practice's complexity. In the beginning stages of business, this can hit your bottom line a little bit harder.
2. Less Immediate Control:
   Handing over sensitive financial information can feel risky, and you’ll need to trust someone else to manage your books accurately. There are options to create logins with banks, credit cards, etc. where you give your bookkeeper their own login and set permissions and parameters for what they can access.

The Hybrid Approach

If you’re torn between DIY and outsourcing, consider a hybrid approach. With this method, you’ll handle daily bookkeeping tasks (e.g., categorizing expenses, recording transactions) and hire a professional to review your books quarterly or annually. Quarterly is preferred over annually because you want to make sure you’re working with accurate numbers throughout the year.

Benefits of the Hybrid Approach:

• Cost-Effective: You’ll save money compared to full outsourcing while still benefiting from professional oversight.
• Professional Guidance: A bookkeeper or CPA can catch errors, provide insights, and ensure your books are accurate.
• Retain Control: You’ll stay involved in your finances while having access to expert support.

How to Decide

When choosing between DIY and outsourcing, consider the following:

1. Budget: Can you afford to outsource? DIY might be better for smaller practices, while outsourcing is often worth the cost for growing businesses.
2. Time: Do you have the bandwidth to manage your books weekly? If not, outsourcing might be your best option.
3. Complexity: Is your practice's financial structure simple or complex? The more accounts, loans, and transactions you have, the more likely you’ll need professional help.
4. Goals: Are you scaling your practice or staying small? Growing practices benefit from the expertise and efficiency of a bookkeeper.

Bookkeeping is a critical aspect of running a successful chiropractic practice. Whether you decide to DIY, outsource, or take a hybrid approach, the key is ensuring your books are accurate, timely, and compliant.

Have questions or need a referral for a trusted bookkeeper? Reach out to me at [email protected]—I’d love to help you get started!