Handling HR fees

Q: We use a human resource company to handle our payroll and medical insurance. Should I include their management fee in our staffing costs?

"The AAHA Chart of Accounts suggests dividing your expenses (other than those for goods and services) into four basic categories: doctor and staff, facility, equipment, and administrative costs," says Lorraine Monheiser List, CPA, MEd, a consultant with Summit Veterinary Advisors LLC, in Littleton, Colo. "So you should include the payroll management fee with your administrative costs, such as advertising, legal, accounting, and so on, rather than as a staff cost."

By doing this, she says, your staff costs will be more comparable to industry statistics that include practices that don't incur this management fee. "Be sure, however, that your payroll company breaks out wages, payroll taxes, and benefits separately so that you can track them instead of combining them into a generic category like payroll costs," says List. "Otherwise, it's difficult to monitor which staff-related costs are rising and at what rate."

Lorraine Monheiser List