• DVM360_Conference_Charlotte,NC_banner
  • ACVCACVC
  • DVM 360
  • Fetch DVM 360Fetch DVM 360
DVM 360
dvm360 | Veterinary News, Veterinarian Insights, Medicine, Pet Care
dvm360 | Veterinary News, Veterinarian Insights, Medicine, Pet Care
By Role
AssociatesOwnersPractice ManagerStudentsTechnicians
Subscriptions
dvm360 Newsletterdvm360 Magazine
News
All News
Association
Breaking News
Conference Coverage
Education
Equine
FDA
Law & Ethics
Market Trends
Medical
Politics
Products
Recalls
Regulatory
Digital Media
dvm360 LIVE!™
Expert Interviews
The Vet Blast Podcast
Medical World News
Pet Connections
The Dilemma Live
Vet Perspectives™
Weekly Newscast
dvm360 Insights™
Publications
All Publications
dvm360
Firstline
Supplements
Top Recommended Veterinary Products
Vetted
Clinical
All Clinical
Anesthesia
Animal Welfare
Behavior
Cardiology
CBD in Pets
Dentistry
Dermatology
Diabetes
Emergency & Critical Care
Endocrinology
Equine Medicine
Exotic Animal Medicine
Feline Medicine
Gastroenterology
Imaging
Infectious Diseases
Integrative Medicine
Nutrition
Oncology
Ophthalmology
Orthopedics
Pain Management
Parasitology
Pharmacy
Surgery
Toxicology
Urology & Nephrology
Virtual Care
Business
All Business
Business & Personal Finance
Hospital Design
Personnel Management
Practice Finances
Practice Operations
Wellbeing & Lifestyle
Continuing Education
Conferences
Conference Listing
Conference Proceedings
Resources
CBD in Pets
CE Requirements by State
Contests
Veterinary Heroes
Partners
Spotlight Series
Team Meeting in a Box
Toolkit
Top Recommended Veterinary Products
Vet to Vet
  • Contact Us
  • Fetch DVM360 Conference
  • Terms and Conditions
  • Privacy
  • Do Not Sell My Information
  • About Us

© 2023 MJH Life Sciences and dvm360 | Veterinary News, Veterinarian Insights, Medicine, Pet Care. All rights reserved.

Advertisement
By Role
  • Associates
  • Owners
  • Practice Manager
  • Students
  • Technicians
Subscriptions
  • dvm360 Newsletter
  • dvm360 Magazine
  • Contact Us
  • Fetch DVM360 Conference
  • Terms and Conditions
  • Privacy
  • Do Not Sell My Information
  • About Us
  • MJHLS Brand Logo

© 2023 MJH Life Sciences™ and dvm360 | Veterinary News, Veterinarian Insights, Medicine, Pet Care. All rights reserved.

How do I assess my practice's profitability? (sponsored by Intervet/Schering-Plough Animal Health)

September 1, 2009

Use an online worksheet, evaluate accounts receivable, and more.

An online worksheet can help

Sometimes it can feel like financial statements are written in Greek. So the first thing to do is ask your advisors—a financially minded colleague, a consultant, an accountant, a bookkeeper—what those numbers mean.

Once you understand the numbers, there's a free resource online to help you determine your profitability. Download the "No-Lo Practice Worksheet" from VetPartners (vetpartners.org). It can help you figure your approximate practice profitability and whether it's especially low.

The next question is, what level of profitability should you expect? There are very few benchmarks available today to answer this question, but generally, 15 percent to 20 percent is a safe and achievable goal for equine practices.

Jim Guenther, DVM, MBA, MHA, CVPM

Advertisement

Strategic Veterinary Consulting

Asheville, N.C.

Try good, better, or best

Here's the easiest way to get a general idea of your profitability: Add up your bills for a given year and subtract them from the money you collected. If you never want a partner, never want to sell your practice, and never plan to be divorced, this method has its merits. It's inexpensive.

Photo: Getty Images

The next best strategy is to hire an accountant. This person will categorize your expenses and develop balance sheets and other forms that loan officers love. I find the profit-and-loss statement easier to navigate with an accountant's help. As the years go on, this person can help you develop a tracking system to spot problem areas and create budgets.

The most precise method of determining profitability is evaluating your practice for sale. This is where you find out what it really costs you to put gas in your personal car, make your horse trailer payment, and forget to charge for castrations. This process is costly but invaluable if you take the time to understand—and act on—the information it yields.

Gregory Smith, DVM

East County Large Animal Practice

El Cajon, Calif.

Get to know your accounts receivable

Because accounts receivable likely play a big part in your practice, you need to be extremely familiar with the accounts receivable module of your practice management software. Make sure you know the clients who owe you money before you go out to work on a horse. Pay attention to your credit card balances and know whom you owe money.

Prepare your financial statements on the accrual basis (count your revenue when you produce it) so you can match your production revenue against the expenses that you incur. Talk to your accountant to learn the difference between accrual financial statements for managing your practice and cash-basis financials for preparing a tax return. He or she can show you how a cash flow statement can help you understand how to reconcile the profit on your income statement to the balance in your checkbook.

Elise Lacher, CPA

Strategic Veterinary Consulting

Seminole, Fla.

Related Content:

AssociatesRoles
Merck Animal Hospital renews scholarship with The Foundation for the Horse
Merck Animal Hospital renews scholarship with The Foundation for the Horse
How to discuss finances with clients
How to discuss finances with clients
Viticus group seeks applications for veterinary boot camp scholarship
Viticus group seeks applications for veterinary boot camp scholarship

Advertisement

Latest News

To refer or to not refer

Advice panel for women interested in the veterinary field

AVMA president set to testify before Congress

New Hawaii-based pet CBD brand launches

View More Latest News
Advertisement