People are trying to build private practice every now and then. One needs to realize that private practice is actually business and not a hobby. Being a business, a lot of things are put into combination for it to flourish. Effective marketing, proper mindset and the right attitude is a required combination. In setting a private practice finances is a key factor. Financial literacy is one of the most essential factors to a successful practice. What one needs is a healthy relationship with money and know how to manage it. There a lot of things that relate to finances like adjusting beliefs and thoughts around money.
There is something referred to as the three piece pie accounting section in accounting. What is meant by this is that the income that one gets should be divided into three sections which should go into different bank accounts. There is the tax pie and this requires that the income deposited here should not be touched until it comes to the time to pay taxes. In a business one needs to pay bills and therefore the second section of the pie is for paying bills. In a private practice one will definitely need to pay bills which include water and electricity bills, services such as cleaning bills and of course salaries. The personal account is the third section of the pie. After paying taxes one can find that they have some of the money left and this money can be taken to the second section of the pie which is paying bills. If there are some finances left after the bills have been paid they can be taken to the personal account. The three piece pie section ensures that one does not lag behind in paying taxes or other bills and therefore it is very important. Mingling of personal and professional funds is also restricted by it.
One should know the time for investment and the time for saving in money matters. One should always have a balance between saving and spending because they can find themselves spending even what they are supposed to save. Some people at times tend to over-save and this means that they cling on the money so much to an extent of forgetting some of their needs and limiting their chances of growth. Some people always fear that they might not have enough. Healthy financial management will ensure that there is enough to spend and save in private practice. Good management of the finances is ensured by the three piece pie accounting section. Overspending or over-saving can be as a result of unhealthy money mindset.