Accounting Tips for the Busy Veterinarian
Getting caught up in the numbers? These four accounting tips can prevent future financial losses for your veterinary practice.
Part of the expected responsibilities of a veterinary practice owner is to learn and understand all aspects of managing a business. To ensure success, it’s in a veterinary practice’s best interest to use in-depth, accurate techniques when it comes to business planning, bookkeeping, tax planning and accounting.
If you’re getting caught up in the numbers, follow these easy accounting tips to help your practice thrive.
: Ensure you are knowledgeable about key financial terms.
Do you understand the difference between cash flow and profit? While “profit” refers to the excess cash that remains after all of the practice’s expenses have been met, “cash flow” is the flow of money in and out of your veterinary practice.
Not having appropriate cash flow can result in a deficit in your operating expenses, and the business may not be able to recover from this state. It’s important that veterinary practice owners have a basic understanding of accounting and bookkeeping terms to avoid losses simply due to confusion about terminology.
: Make use of widely available accounting software.
Managing your financial records can be tricky, but there are several accounting software programs that can help. By choosing software that is accurate for the volume and size of your veterinary practice — for smaller practices, QuickBooks is the software of choice — it could significantly enhance your ability to reduce the risk of errors, increase efficiency and keep better track of your records.
: Introduce strategic measures for cost-cutting.
Keeping expenses as low as possible is vital to the success of any business. Although you cannot do away with buying costly veterinary equipment, you can significantly reduce costs by employing an astute bookkeeper.
If you are not familiar with bookkeeping, it might be beneficial to hire someone who excels in the field. Bookkeepers are trained to identify discrepancies — such as preventable calculation mistakes or embezzlement by employees — and can alert you to any questionable activity.
Monitoring for internal embezzlement should be a top priority, but you may not be able to identify the theft on your own. Just as you consult with other veterinarians for advice on certain patients, you must engage accounting professionals for advice on your practice’s finances. Look for CPAs that specialize in veterinary practices and have them monitor your practice’s finances on a monthly basis.
Naren Arulrajah is president and CEO of Ekwa Marketing, a complete internet marketing company that focuses on SEO, social media, marketing education and the online reputations of veterinarians/practice owners. With a team of 180+ full-time marketers, ekwa.com helps practice owners who know where they want to go, get there by dominating their market and growing their business significantly year after year. If you have questions about marketing your practice online, call 855-598-3320 to speak one-on-one with Naren.