A practical guide on financial management for psychologists in Portugal. Invoicing, pricing, tax obligations, payment methods, and how to automate the financial side of clinical practice.

Financial Management for Psychology Practices

Financial management is one of the most neglected areas in psychologists' training. After years studying human behavior, many professionals find themselves running a business without preparation for the realities of taxation, invoicing, and revenue management. The result is often unnecessary stress, tax errors, and lost revenue due to disorganization. This guide covers the essential financial aspects for psychologists in Portugal, from pricing to invoicing automation.

The Financial Reality of Clinical Practice

Before getting into the practical details, it is important to acknowledge the context.

The Cost of Not Managing

Many psychologists lose significant revenue due to financial management failures:

Unbilled sessions: Forgetting or delaying invoice issuance.
Late payments: Lack of an efficient collection system.
Uncharged no-shows: Absence of a clear cancellation policy.
Lost tax deductions: Professional expenses not properly recorded.
Administrative time: Hours spent on tasks that could be automated.

The Money Taboo

The relationship psychologists have with money is complex. Training emphasizes the helping relationship, and discussing fees can feel uncomfortable. But financial sustainability is a necessary condition for quality practice in the long term.

Setting Session Prices

Pricing is one of the most important decisions for practice sustainability.

Factors to Consider

Fixed monthly costs:

Office rent (or share, if in a shared space).
Practice management software and technology platforms.
Professional liability insurance.
Portuguese Order of Psychologists (OPP) membership fees.
Accounting services.
Internet, electricity, and other consumables.

Variable costs:

Clinical supervision.
Continuing education.
Assessment materials (tests, licensed scales).

Mandatory contributions:

Social Security (self-employed): 21.4% on 70% of relevant income.
IRS (income tax): Variable depending on the tax bracket.
VAT: Exempt for clinical psychology services (Article 9 of the CIVA), but subject to VAT for training and consulting.

Practical Calculation

To calculate the minimum sustainable price:

Add up all fixed monthly costs.
Add estimated variable costs.
Define the desired net income.
Calculate mandatory contributions.
Divide by the realistic number of sessions per month (accounting for no-shows, holidays, and days without patients).

Example:

Fixed costs: 800 euros/month
Variable costs: 200 euros/month
Desired net income: 2,500 euros/month
Estimated contributions: 750 euros/month
Total needed: 4,250 euros/month
Realistic sessions: 80/month (4 per day, 20 days)
Minimum price per session: 53 euros

This is the minimum. Market pricing, your experience and specialization, and geographic area should also be considered.

Market Prices in Portugal (2026)

Prices vary significantly:

Private practice (general): 50-80 euros per 50-minute session.
Specialties (neuropsychology, EMDR, couples therapy): 70-120 euros.
Urban areas (Lisbon, Porto): Tend to be higher.
Interior regions and islands: More moderate prices, but with lower supply.

Price Differentiation

Consider offering different options:

Single session vs. package: Packages of 4-8 sessions with a slight discount encourage continuity.
First consultation: May have a different price (longer initial assessment).
Online vs. in-person therapy: Some professionals charge different rates; others keep the same (recommended).
Reduced fee slots: If desired, reserve one or two slots for patients with financial difficulties.

Invoicing: Obligations and Best Practices

Tax Obligations

Every psychologist in private practice must:

Be registered with the tax authority (Finanças) under the appropriate CAE code (86906 — Other human health activities, n.e.c.).
Issue an invoice-receipt (or recibo verde) for each session.
Report invoices to the Tax Authority (Autoridade Tributária).
Maintain accounting records for the legally required period (generally 10 years).

VAT Exemption

Clinical psychology services are exempt from VAT under Article 9, paragraph 1, of the CIVA (Portuguese VAT Code). This includes:

Psychotherapy sessions.
Clinical psychological assessment.
Follow-up consultations.

Not included (subject to 23% VAT):

Training and workshops.
Organizational consulting.
Lectures and speaking engagements.

Issuing Invoices

Certified software: Since 2013, it is mandatory to use invoicing software certified by the Tax Authority for professionals with annual income exceeding 12,500 euros.

Mandatory invoice elements:

Professional's name and NIF (tax ID).
Patient's name and NIF.
Description of the service.
Date of issue.
Amount and applicable VAT rate (or exemption reference).

Timing: The invoice must be issued by the 5th business day of the month following the service. Ideally, issue it on the day of the session.

Mena.ai's automatic invoicing manages this entire process: invoices are generated automatically after each session, with the correct tax details, and reported to the Tax Authority.

Payment Methods

Offering multiple payment options facilitates collection and reduces delays.

Common Options

Bank transfer: The most common in Portugal. No costs to the professional.
MB WAY: Fast and convenient. No subscription costs.
Debit/credit card: Requires a payment terminal (TPA). Commission costs (0.5-2%).
Multibanco (reference): Payment reference generation. Variable costs.
Direct debit: Ideal for packages or regular sessions.

Payment Policy

Define and communicate a clear policy:

When: Before the session, on the day, or within X days after? Advance payment reduces no-shows.
Late payments: What happens in case of non-payment?
Cancellations: Cancellation policy with minimum notice period (24-48 hours) and potential charge.
No-shows: Full or partial charge for no-shows without notice?

Automating Collection

Automation is the best way to ensure payments are made on time:

Automatic payment reminder sent before the session.
Invoice issued at the time of payment.
Automatic reminders for overdue payments.
Monthly revenue reports.

Revenue and Expense Management

Monthly Organization

Set aside 30 minutes per month to review your finances:

Revenue: Total sessions completed and invoiced. Check pending payments.
Expenses: Record all professional expenses (keep invoices).
Balance: Revenue minus expenses. Are you on track?
Provisions: Set aside at least 25-30% for taxes and contributions.

Deductible Expenses

Psychologists under the simplified regime can deduct expenses that reduce taxable income:

Office rent.
Professional insurance.
Software and technology.
Continuing education and supervision.
Office supplies.
Professional membership fees (Order of Psychologists).
Professional travel expenses.

Important: Keep all invoices and ensure they are in your name with your NIF.

Tax Regime: Simplified vs. Organized Accounting

Simplified regime:

For annual income up to 200,000 euros.
Taxable income = 75% of gross income (coefficient 0.75 for liberal professionals).
Simpler, no certified accountant required (but recommended).

Organized accounting:

Mandatory above 200,000 euros or by choice.
Allows deduction of all expenses actually incurred.
Requires a certified accountant.
May be more advantageous if you have many professional expenses.

Cancellation and No-Show Policy

No-shows and last-minute cancellations are one of the biggest sources of revenue loss.

Financial Impact

A psychologist with 5 sessions per day who has 2 no-shows per week loses:

2 x 65 euros x 48 weeks = 6,240 euros per year.

This amount amply justifies implementing a clear policy.

Best Practices

Written policy: Include in the informed consent and therapeutic contract.
Minimum notice: 24-48 hours advance notice for cancellations.
Charges: 50-100% of the session fee for late cancellations or no-shows.
Exceptions: Clearly define what constitutes a legitimate exception.
Reminders: Sending automatic reminders significantly reduces no-shows.

Mena.ai's smart scheduling sends automatic reminders via SMS and email, reducing no-shows by up to 30%.

Insurance and Health Plan Agreements

Professional Liability Insurance

Although not mandatory, it is highly recommended.
Cost: 100-300 euros per year, depending on coverage.
Covers damages caused to patients by professional negligence.

Health Insurance Agreements

Working with health insurers can increase patient volume:

Advantages:

Access to a broader patient base.
Guaranteed payment (from the insurer).

Disadvantages:

Per-session rates generally lower than private fees.
Additional bureaucracy (pre-authorizations, reports).
Limitation on the number of covered sessions.

Most common insurers in Portugal: Multicare, Medis, AdvanceCare, Allianz, Fidelidade.

ADSE and Public Subsystems

ADSE (the civil servants' health subsystem) partially covers psychology consultations.
Reimbursement to the beneficiary (not direct payment to the professional).
An invoice with the correct details is needed for the beneficiary to submit.

Medium-Term Financial Planning

Emergency Fund

Maintain a fund equivalent to 3-6 months of fixed expenses. As a self-employed professional, you do not have guaranteed sick pay for the first 10 days.

Holiday Provision

You do not receive holiday pay. Set aside the equivalent of 1/12 of your income monthly to cover the less active months (August, December).

Investing in Your Practice

Allocate a percentage of your income for:

Continuing education (essential for maintaining competitiveness).
Technology updates.
Marketing and online presence.
Office improvements.

Retirement

As a self-employed worker, the Social Security pension will likely be insufficient. Consider:

PPR (Retirement Savings Plan) with tax benefits.
Investment fund.
Private pension plan.

Frequently Asked Questions

Do I need an accountant?

Under the simplified regime, it is not mandatory, but it is strongly recommended. A good accountant saves you time, prevents tax errors, and can identify savings opportunities that more than offset the cost (150-250 euros per month).

Are psychology services subject to VAT?

Clinical psychology services (therapy, clinical assessment, consultations) are exempt from VAT. Activities such as training, organizational consulting, or lectures are subject to 23% VAT.

Can I issue recibos verdes (green receipts) for sessions?

Yes, recibos verdes (one-off or self-employed regime) are the most common form of invoicing for psychologists in private practice. However, above 12,500 euros in annual income, certified invoicing software is mandatory.

How to deal with patients who do not pay?

Start with prevention: clear payment policy, advance payment or payment at the time of the session. For existing debts, send written reminders. As a last resort, you can use a collection agency or legal action, but evaluate whether the amount justifies the process.

Should I charge the same for online and in-person sessions?

There is no universal rule. Many professionals charge the same, arguing that the service provided is equivalent. Others charge a slightly lower rate for online sessions. The current trend is toward equal pricing.

How much should I set aside for taxes?

As a general rule, set aside 25-30% of gross income for IRS (income tax) and Social Security. Under the simplified regime, taxable income is 75% of gross income, to which the IRS tax brackets apply. Consult your accountant for a more precise calculation.

Conclusion

Financial management does not have to be a source of anxiety. With clear systems, well-defined policies, and the right tools, it is possible to keep your practice's finances organized with a minimal time investment.

Automation is the key: Mena.ai's integrated invoicing management handles invoice issuance, payment reminders, and financial reports, freeing you to focus on your clinical practice.

The financial health of your practice is the foundation for sustainable and fulfilling clinical work. Invest time in organizing it — the return is guaranteed.