Equine Q&A: My net profit is sinking

ADVERTISEMENT

Equine Q&A: My net profit is sinking

My revenue and profit as a solo ambulatory practitioner are falling off in this recession. I know I need to raise fees, but is there anything else I can do to give my net profit a boost?
source-image
Apr 30, 2010
By dvm360.com staff

You're right to think raising fees isn't always the answer. There are other ways to increase your net too, says Dr. Jim Guenther, MBA, CVPM, a Veterinary Economics Editorial Advisory Board member and consultant with Strategic Veterinary Solutions in Asheville, N.C.

Examine your expenses
First, take a close look at expenses. The three most important are salaries, rent, and drugs/medical supplies. As an ambulatory doctor, your rent and salaries should be under control. That leaves drugs and medical supplies.

A good current benchmark for drugs and supplies as a percentage of gross revenue is 20 percent to 22 percent. If your percentage is higher, revisit your inventory management and re-evaluate your system.

"Order less product, write more scripts, and make sure your markups are where they need to be," Dr. Guenther says. If you can lower this expense and maintain the same gross revenue, your profit improves. (See related links below for an article by Veterinary Economics Editorial Advisory Board member Gary Glassman, CPA, on harnessing your equine practice inventory.)

Mind your missed charges
No one likes to monitor records for missed charges—all the paperwork—but it's a crucial part of improving your bottom line. If you're doing work and not being paid for it, you're letting pure profit slip through your fingers.

For example, Dr. Guenther says, several years ago IDEXX found the average practice missed nearly 20 percent of lab services charges. "I'd bet if it's true for lab services, it's true for almost every area of your practice," he says.

To find out how much you're undercharging or failing to charge, audit some of your medical records daily. Compare client invoices, medical records, and travel sheets (if you use them). You'll see the revenue you're losing every day. Recapture those missing-in-action charges right now and improve the profitability of your practice.

Hot topics on dvm360

Dog of Dallas Ebola patient will not be euthanized, authorities say

Health officials have quarantined and will monitor dog and amid concerns surrounding deadly virus.

Video: How to perform a belt-loop gastropexy

Prevent GDV in your at-risk patients with this simple technique.

Stretch your skills to earn more in veterinary practice

Finding new tasks could be the key to generating more income for your practice—and boosting your pay.

Veterinary community stunned by Sophia Yin's unexpected death

Prominent veterinary behaviorist died of suicide Sept. 28.

Study shows sustained salary slump for veterinary support staff

Since 2009, technicians paid by the hour have experienced a bump in pay, but pay for other team members has stayed stagnant, according to data from the 2014 Firstline Career Path Study. Here’s a look at changes in team pay from 2009 to 2013.