Hopefully, but now you've looked at your year-end financial statements and assessed your practice's profitability. How well did you do? Were you as profitable as you planned? Was it a great year for you?

I hope it was. But if this year fell short of your expectations, what are you going to do about it? If you're not sure, check out these 10 ways to change, add, or update your approach.

1 Review markups on pharmacy items

Using the fee-setting formula

Team members were entering the purchase price, but the "switch" in the software that would enable the automatic markup was set at "no." This meant that inventory items hadn't been properly marked up since the practice team purchased the computer six years ago!

To avoid this type of problem, check your computer settings and make sure the computer institutes the markups you intended. To test it, enter a new, fictitious product into the computer at 100 percent markup and see what comes out on the other end. You should also check that minimum per pill charges and minimum prescription fees are programmed into your system. This area of your practice is too important for you to make assumptions. Make certain your pharmacy is working as a profit center.

2 Update dispensing fees

While you're looking into your computer system and reviewing inventory and pharmacy items, also review your dispensing fee. The dispensing fee offsets the cost of counting out, packaging, and labeling a product. If you mark up items without adding a dispensing fee, you're greatly reducing your profitability.

Every pharmacy—human and veterinary—charges a dispensing fee. Typically you'd add the fee into the total cost of the prescription, rather than presenting it as a separate line item on the client invoice. You may even wish to establish two dispensing fees—one to cover items that you count out, package, and label, and another smaller fee for cases when you just need to label the item.

Dispensing fees vary significantly, but I'd guess the average lies between $9 and $14. A labeling fee might range between $4 and $6. Just to be clear, you would not charge both a dispensing fee and a labeling fee; charge one or the other. I suggest you review these fees every six months and make adjustments as necessary. As overhead costs increase, so must your dispensing and labeling fees.

3 Offer third-party payment options

As veterinary medicine becomes more sophisticated and we can offer our clients and their pets better products and services, the cost of care naturally increases. So it becomes more important to offer clients various payment options. Most practices accept credit cards—which is great—and many practices also accept debit cards.

Another option is to sign up with a third-party payment service that is available to our profession. As you probably know, with these services clients fill out a credit form and submit it online or by fax. If the company approves the application, the client can immediately access the new line of credit and pay for your services.

The client then pays off his or her debt over time. This approach can give clients the financial flexibility they need in order to pay for their pet's care, and if the client doesn't qualify for credit, it's the company who says so, rather than you.