The invisible cost of your team and the money you forget about

On this week's episode of The Vet Blast Podcast presented by dvm360, our host Adam Christman, DVM, MBA, welcomed Rhys Giannarelli to the show to talk about the importance of understanding what the true cost of having a team at a veterinary practice looks like. Throughout the episode, they discuss not just salaries, but also benefits such as retirement contributions, payroll taxes, sick days, and more, plus why it is crucial to budget for these costs, which can be up to 30% of payroll.

Below is a partial transcript, edited lightly for clarity.

Adam Christman, DVM, MBA: Let's talk a little bit more about that with budgeting too, because this budgeting system seems to work across the board. So what is it about this system that makes such a big difference for business owners from day to day operations, lets say?

Rhys Giannarelli: It uncovers the invisible costs. It's something that's you know, as I said, we always forget about... We just didn't know about it. But once we've outlined a template or roadmap or a blueprint of what each thing can cost a practice per employer, nothing gets slipped through the cracks. It's basically a checklist. You say, this is how much this person gets paid, is how much that person gets paid. This is what they get allocated for each thing, and we'll talk about doctors in a second. But it gives you a yearly or a monthly snapshot with no more guessing, and the numbers, just well, no more guessing, hoping that the numbers work out. You know exactly what each person is going to cost and no surprise at the end of the year, because, again, you've budgeted for this. It's okay to, well I wouldn't say it's okay, it's fine to understand or just report what you have paid somebody in that moment, in that month, in that biweekly payroll, but you still need to be able to budget for the future. And that's something that I preach a lot about. Owners and managers can confidently assign pay rises and hiring or have equipment replacements and obviously budget for taxes. This is something that we just don't do, which we should or [pay] for. Anything else is there? Actually, there is no limit when it comes to budgeting itself. It's just a matter of identifying what those margins are.