Profit and Loss for Physical Therapy Clinics: 4 Hidden Areas That Drain Revenue

As a private practice owner, it’s easy to get caught up in the daily grind; treating patients, managing staff, and keeping the lights on.

But the truth is, you’re not just running a practice, you’re running a business. And that means taking ownership of the profit and loss for your physical therapy clinic.

The difference between working in your business and working on your business shows up in your numbers.

If you’re not consistently reviewing where revenue is gained and where it’s lost, you’ll miss out on major opportunities for profitability.

Think of your clinic like a bucket filled with water...

Every leak in the bucket represents lost income. Money that should be yours.

Most clinics lose 10–15% of their potential profit through these leaks.

When you understand the profit and loss dynamics in your physical therapy clinic, you can stop those leaks before they grow.

Let’s walk through four of the most common (and preventable) areas where losses happen and, how to fix them.

1. The Front Desk: The First Line of Defense in Profit and Loss

Many clinic owners treat the front desk as a low-skill, low-pay position. That mindset alone can cost you thousands. The front desk do more than "just answer phones", they’re the operational heart of your clinic.

They’re responsible for:

• Collecting patient and insurance information

• Verifying coverage

• Entering data accurately into your EMR

• Scheduling appointments

• Collecting payments at time of service

• Making your patients feel welcome and comfortable

Mistakes in any of these areas affect the profit and loss for your physical therapy clinic every single day. One error in data entry or missed copay can lead to denied claims and lost revenue.

Solution:

• Train your front desk team with clear processes

• Set up tracking systems for calls, data entry, and collections

• Make sure they understand their impact on revenue

This is one of the easiest ways to stabilize profit and loss in your PT business.

2. Billing & Claims: Where Revenue Goes to Die (If You're Not Careful)

Billing may seem like a task you can outsource and forget, but doing so without oversight is risky.

The basics of submitting a PT claim are simple. But when 30% of claims are denied industry-wide, mistakes add up fast.

Delayed or rejected claims drastically impact the profit and loss of your physical therapy clinic—not only in revenue but in the time, labor, and stress it takes to refile.

Solution:

• Implement clean claim procedures

• Train both front desk and therapists on proper documentation and coding

• Monitor your Accounts Receivable weekly

• Hold your billing company accountable with regular reporting

By improving billing accuracy, you’ll shorten payment cycles and improve your profit and loss tracking month over month.

3. Money Management: The Silent Killer of Profit

Bad debt is a silent killer in private practice. It shows up as unpaid copays, delayed deductibles, late claims, and even the need to borrow to cover monthly expenses. If your AR is aging past 60 days, you’re watching your profit shrink.

The profit and loss for physical therapy clinics can be improved quickly by reducing bad debt and tightening financial discipline.

Solution:

• Require payment at time of service - no exceptions

• Track your AR closely: 80% should be within 60 days

• Improve staff training on payment policies

• Review and update financial policies regularly

Bad debt is preventable and reducing it adds instant profit back into your bottom line.

4. Therapist Productivity: Your Highest Cost, and Biggest Opportunity

Labor is likely your largest business expense - and therapist productivity has a huge impact on the profit and loss for your PT clinic. Even when therapists are “busy,” they might not be hitting profitability targets.

The golden standard is 85% productivity. Anything less is a loss waiting to happen.

Solution:

• Set and track productivity goals

• Manage schedules to maximize utilization

• Measure revenue per therapist, not just visit counts

• Align clinical output with financial expectations

Monitoring therapist performance directly ties to improving profit and loss outcomes in your clinic.

Final Thoughts: You Can Control Your Profit and Loss

You’re a physical therapist, but you’re also a business owner.

And as a business owner, it’s your responsibility to monitor the profit and loss for your physical therapy clinic just like you monitor clinical outcomes for patients.

Start by:

• Training your front desk team

• Fixing billing and claims systems

• Managing bad debt

• Holding your staff accountable to productivity metrics

The revenue you’re losing is recoverable. The profit and loss in your PT clinic is a reflection of how well your systems, training, and leadership are working together.

Start running your practice as your business, put processes and procedures in-place, train your staff on these procedures, monitor your metrics, manage your staff and this will lead you to be profitable and successful!

Ready to Stop The Profit Leaks in Your Business?

Let’s identify where money is slipping through the cracks and build a plan to help you track your numbers, increase efficiency, and grow your bottom line.

👉 Book a FREE strategy call now and take the first step toward running a clinic that works for you, not the other way around.

Click here to book your free call with Andrew Vertson.