 Hospital Management Editor Mark Opperman is a certified veterinary practice manager and owner of VMC Inc., a veterinary consulting firm based in Evergreen Colo. Through his firm, he has consulted with more than 800 veterinary hospitals throughout North America, providing assistance in associate hiring, partnership formation, exit strategies, employee issues, profitability, efficiency, and more. He has lectured worldwide at meetings such as Fetch dvm360 conference (formerly CVC), the North American Veterinary Conference, the World Small Animal Veterinary Conference, the Denmark Annual Congress, and the London Veterinary Forum. Opperman founded the Veterinary Hospital Managers Association and served as president until 1993. Through his VMC School of Veterinary Practice Management, he has trained more than 250 practice managers.

Q. We currently subtract the cost of inventory from our doctors' production. Do you recommend this? Also, should we subtract payroll taxes? 

 "If you pay the doctors a percentage of production and you're marking up your inventory correctly, why would you subtract the cost of inventory?" says 

 Hospital Management Editor Mark Opperman, CVPM, owner of VMC Inc., a veterinary consulting firm in Evergreen, Colo. "The cost of inventory is already figured into their percentage-based compensation." 

Opperman says payroll taxes depend on the percentage you're paying the associates. "Remember, the total cost of employing an associate shouldn't exceed 25 percent of his or her production. So if you're paying at the high end of this percentage, you might subtract out the taxes. If you're closer to 21 percent or 22 percent, you wouldn't—depending on the cost of other benefits." He suggests using a total compensation statement (available at 

) to figure out the total costs of employment for your associate.  

Practice Finances

We currently subtract the cost of inventory from our doctors' production. Do you recommend this? Also, should we subtract payroll taxes?

Production deductions

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