Controlling your inventory & support staff costs (Proceedings)


Your inventory costs to gross should be 14-16%

I. Inventory costs

     A. Your inventory costs to gross should be 14-16%

     B. Let's look at some of the reasons why your inventory costs might be out of line

          1. Shelf life

          2. Duplicity of product

          3. Factor of mark-up

          4. Factor of total income

          5. Embezzlement

II. Do you have and effective inventory control system in place

     A. Can you control all your inventory with your computer software program?

     B. Items that go through the receipting process can be controlled by your computer system, items that don't go through your receipting process must be controlled by an alternate system

     C. Let's discuss both inventory control systems

          1. Manual - Red Flag Inventory Control System

          2. Computerized inventory control with your veterinary software program

               a. Establishing effective inventory control with your computer

                    • Review your type categories

                    • Set up a "manual" type category

                    • Review all inventory items in the computer for the following:

                         o Buy-to-sell ratio

                         o Mark-up

                         o Auto calculation

                         o Description

                         o Review other information

                    • Perform a physical inventory

                    • Enter new numbers into the computer

                    • Print re-order reports

                    • Use your inventory control system

                    • Do a physical inventory at least once a year

III. Controlling your support staff costs

     A. Your total support staff costs to gross should be 22-23%

          1. What is included in this number?

     B. Breakdown of support staff costs to gross

     C. Associate doctors should run around 14% of gross income, but be paid on a percentage of their individual production.

          1. ProSal

     D. What are the causative reasons why support staff costs to gross might be too high in a veterinary practice?

          1. Scheduling

          2. Overtime

          3. Poor utilization and training

          4. Factor of income

          5. Embezzlement

     E. What can you do to bring your inventory and support staff costs into line in your practice?

Inventory Reorder Tags


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