Practice finances struggle in December
How’s your veterinary practice holding up financially? If you’re struggling to recover from the recession, you’re not alone, according to Tom McFerson, CPA, ABV, partner with veterinary accounting firm Gatto McFerson in Santa Monica, Calif. Here are a few real-life examples that suggest holiday shopping may have taken precedence over veterinary care for many pet owners.
Who: A four-doctor practice in Florida
The damage: Practice owners expect revenue to be down about 15 percent compared to last year.
In their own words: “The Friday after Thanksgiving, our numbers went over a cliff. Appointment books are wide open. The phone barely rings. Very few clients are coming in for the routine stuff.”
Who: A three-doctor practice in California
The damage: Practice owners expect a revenue drop of about 12 percent compared to last year.
In their own words: “Our luxury dog and cat boarding will only be about 60 percent full this Christmas and New Year’s. Last year, we were close to capacity.”
Who: A large emergency center in the Pacific Northwest
The damage: The practice was down about 10 percent midway through December, compared to last year.
In their own words: “We’re seeing less volume. I don’t know if the pet owners are choosing not to come in, or if the referring veterinarians are seeing the animals first. The ones who do walk in the door are, more often than not, choosing the bandage-on-a-bullet approach.”
Who: A large, multi-specialty practice
The damage: After encouraging revenues in October and November, the practice was down about 11 percent in December compared to last year.
In their own words: “They’re the same problems most large practices have had all year, only magnified.”
Based on these findings, McFerson recommends that practice owners take a defensive approach over the next few months. Here are some suggestions, courtesy of Gatto McFerson.
> Conserve your cash. Try to build your reserves.
> Don’t spend unnecessary money, regardless of the “deal” being offered
> If you take accounts receivable, stop. If you can’t stop, collect aggressively.
> Keep an eye on staff salaries and benefits.
> Stretch your accounts payables, if possible.
> Have a safety net. Having access to outside funds, such as a credit line, is ideal.
> Pay close attention to your internal controls. Tough times can sometimes lead to desperate acts by normally trustworthy people.