Traditionally, the accounting methods of individual veterinary practices are as diverse as the practices themselves. But times are changing — and for the better.
Thanks to a new partnership that includes the American Animal Hospital Association (AAHA), Veterinary Management Groups (VMG), American Veterinary Medical Association (AVMA), VetPartners, and the Veterinary Hospital Managers Association, veterinary practices now have access to a free, powerful practice finance tool.
In an effort to improve benchmarking throughout the profession, the AAHA/VMG Chart of Accounts has recently been revised and expanded and is now available and for free to all veterinary medicine professionals in the country. This practice finance tool, over 17 years in development, is set up to assist companion animal veterinary practices of all sizes.
“We are thrilled to provide the AAHA/VMG Chart of Accounts for free as a benefit to the veterinary profession,” said AAHA CEO Michael Cavanaugh, DVM. “By using an apples-to-apples comparison of productivity, costs, and profitability, veterinarians can better assess the financial health of individual hospitals and the industry as a whole.”
Well ahead of the veterinary medical field, the medical and dental professions long ago recognized that a lack of standardization in their practitioners’ charts of accounts and diagnostic and procedure codes can severely impede success.
In fact, according to the AVMA’s Veterinary Economic Strategy Committee, “standardization of the veterinary chart of accounts is crucial in gathering data essential to strengthening practice profitability, individual financial wellbeing and enhancing the veterinary workforce as a whole.”
With the goal of bringing the veterinary profession together to facilitate the collaboration necessary to improve business knowledge, acumen, and financial success, the AVMA initiated the Economic Advisory Research Council (EARC). Through the development of partnerships and collaboration, the EARC is working toward organizing and efficiently using the veterinary profession’s scarce resources. As its first task, the EARC initiated a standardized chart of accounts.
AVMA President Thomas F. Meyer, DVM, said the organization “is committed to working in partnership with colleagues to develop programs that will help every veterinarian meet their professional and personal goals, whether they are just graduating from veterinary school or looking toward retirement.”
As a high-value financial-management resource, the AAHA/VMG Chart of Accounts is the cornerstone of the broader economic initiative. It is the first of many new resources to come from this collaboration.
AAHA officials want the AAHA/VMG Chart of Accounts to become the industry standard for classifying revenue, expense, and balance sheet accounts in small animal practices—allowing practitioners to better organize their own practice finances in line with generally accepted accounting principles. AAHA also recommends that all accounting firms working with veterinary practices adopt the standardized codes.