Practitioners who review their finances monthly earn about $42,570 more per year than those who don't. This stark finding
from the 2005 AVMA-Pfizer Business Practices Study, conducted by Brakke Consulting Inc., illustrates the importance of keeping
a close eye on your practice finances. Here's a look at three key figures you need to know:
1. How much hits the bottom line The study shows only 22 percent of respondents look at their profit-and-loss statements on a monthly basis. "I'm surprised
this number is so low," says Dr. Karen Felsted, CPA, MS, CVPM, a consultant with Brakke Consulting Inc. in Dallas. "Most people
understand the profit-and-loss statement; it states revenue in, expenses out, and what's left over. I think maybe people don't
look at their profit-and-loss statements because they don't know what to do with the information."
You want to compare your profit-and-loss statement to your previous years' statements and to published benchmarks, says Dr.
Felsted, a Veterinary Economics Editorial Advisory Board member. Are you spending more or less in key areas?
2. How much clients owe you More than three quarters—77 percent—of respondents review their accounts receivable aging reports each month. And Dr. Felsted
says it's a good thing that so many doctors check this statistic. Yet just looking at the numbers isn't enough. You need to
do something with the information to make a difference, she says. "And there's still the fact that nearly a quarter of veterinarians aren't focused on their monthly accounts receivable report,"
she says. "That's something everyone should review regularly to increase practice and personal income. You're just asking
to give away money if you don't follow up on this information."
Figure out who owes you money—and how much—Dr. Felsted says. Then determine which clients you could work with to reconcile
their accounts. Send the ones that don't seem promising to collections.
Figure 1 : In the know on production
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3. How much you produce Two-thirds of responding owners to the AVMA-Pfizer study review the production of the doctors in their practices on a monthly
basis. (See Figure 1.) "It's a cliché, but you can't manage what you don't measure," says Dr. Felsted. "Let's say you're an
owner and you don't know how much an associate produces. You have no idea whether you're paying your employees fairly given
their contributions."
"This ignorance also makes it hard for owners to determine whether they're addressing gender-pay issues," says Dr. Felsted.
"So often we say that differences in production drive differences in pay between men and women. But if we're not measuring
production, how can we know?"
Dr. Felsted says all doctors, associates and owners, need to know their production to ensure their financial security. Yet
the AVMA-Pfizer study shows many doctors—44 percent of male associates and 56 percent of female associates—don't know their
production. How can you ensure you're paid fairly or work to increase your pay if you don't know your production?
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