When it comes to accounting software, we’ve long recommended Wave for its simplicity, speed, and excellent value. For many business owners with straightforward needs, Wave offers features that rival or exceed QuickBooks at a fraction of the cost.
Wave works particularly well if you primarily bill clients for services and your annual business revenue stays under $2 million. However, as your practice grows more complex—such as using business loans for expansion or acquiring other practices—QuickBooks’ advanced features may become more valuable. Contact us to discuss which option best fits your specific situation.
Recent Policy Changes Affect Mental Health Practices
In 2024, Wave significantly strengthened its terms of service with language that actively discourages mental health practices from using their platform. This change only affects healthcare-related businesses. General service providers and coaches weren’t impacted. They didn’t see this new language during Wave signup.
QuickBooks takes a more measured approach. Their US license agreement doesn’t specifically mention PHI (Protected Health Information) or HIPAA. Instead, they simply recommend that business owners avoid entering PHI into the system and refer users to the HHS HIPAA resources for guidance.
A Practical Solution: Separate PHI from Financial Data
The most sensible approach is to keep PHI out of systems where it isn’t necessary. Here’s a workflow that maintains HIPAA compliance while streamlining your financial management:
Step 1: Use HIPAA-Compliant Practice Management Handle all invoicing and initial payments through an Electronic Health Record (EHR) system like SimplePractice. These platforms will sign a Business Associate Agreement (BAA) with you, ensuring HIPAA compliance for client billing.
Step 2: Leverage Anonymous Payment Processing SimplePractice processes payments through their payout system, which uses payment processors like Stripe. Here’s how this creates a “PHI-free zone”:
- Stripe collects payments from client accounts into a temporary holding account
- Stripe then transfers aggregated funds to your business account in a separate, anonymized transaction
- Your bank statement shows generic entries like “Stripe Integrate TRANSFER ST-C6X5C…” instead of client names
Step 3: Clean Financial Data for Accounting Your accounting software (Wave, QuickBooks, etc.) only sees anonymous revenue transfers, which you can then match against business expenses for complete financial management.
Step 4: Simplified Tax Preparation Your tax preparer can work directly with the clean financial data from your accounting software, ensuring compliance without exposure to PHI.
Compliance Red Flags to Avoid
- Invoicing Issues: Avoid creating invoices directly in QuickBooks or Wave if they contain client information. This puts PHI into non-HIPAA-compliant systems.
- Payment Platform Issues: Avoid payment methods like Venmo that store client information for purposes beyond payment processing (such as marketing or additional invoicing features).
- Bank Statement Exposure: Remember: if client names appear on your bank statements, that information will flow into your accounting software. Choose payment platforms that properly anonymize transactions.
This approach creates a clear separation between your clinical work (which handles PHI) and your business operations (which work with anonymized financial data), keeping you compliant while maintaining efficient financial management.
