Q: Our practice is doing OK financially, but I'd like to eliminate needless spending. What are some of the most common financial oversights in veterinary practices?
If you want to eliminate excessive spending, start by developing a budget for your practice, says Dr. Amanda Donnelly, MBA, owner of ALD Veterinary Consulting in Rockledge, Fla. Budgets keep you focused on controlling expenses and make you think about what you can really afford before you agree to spend money. By establishing a budget you can plan ahead and decide if your practice can afford expenditures such as new equipment or a staff raise. Also, you can better control the small expenses that add up: CE, travel, meals, and bonuses.
One of your biggest expense categories is drugs and supplies, so implement an effective inventory control system, Dr. Donnelly continues. Don't stock more inventory than you need, and try to turn over your entire inventory—not just the most commonly used items—every month. Establish minimum quantity on-hand amounts and reorder points for each inventory item so you don't run out of supplies but you don't keep too much product on the shelf. If you notice that some products stay on the shelf for several months, then you have an opportunity to reduce inventory and spending. Your other big expense is payroll, so pay attention to staff hours and eliminate any overtime or unnecessary staffing costs.
A final way to cut expenses is to see if you can lower the merchant fees you pay by negotiating a better rate with your current vendors or calling other companies to see if you can secure a cheaper rate. In addition, search for better deals on routine expenses—lawn service, snow removal, telephone and Internet providers, printing, and janitorial service. If you up add up these small savings, you're sure to save big in the end.