VetBooks will manage your bookkeeping process and provide detailed, accurate and timely information for monitoring your practice metrics.
A profit and loss statement (P&L) is a business essential. It can reveal volumes about the financial health of your business and guide future investments and growth.
You don’t have to go it alone. Martin Traub-Werner, VetBooks founder and CEO, explains how VetBooks, a veterinary bookkeeping service, can help you manage your entire bookkeeping process and track and interpret these key financial figures about your business:
Q: Why is the P&L so important for a business?
A: There’s nothing like a detailed, clean, updated P&L to figure out what’s happening in a business. The P&L is naturally organized to tell the story of the business over a period of time—a month, a quarter, a year—you choose the timeframe. You can learn the sources of revenue, the gross profit for each source of revenue, the largest variable expenses, the largest fixed expenses, your overall profitability. It’s all right there. Once you have a clean and detailed P&L you can answer almost any financial question about the operations of your business. More importantly, you can make changes to your business and monitor the financial effects of those changes shortly after they’ve been implemented. In many ways business is a game: Maximize revenue, minimize expense, make good decisions and thoughtful investments. The P&L is one of the essential tools in measuring your success.
Q: Why is it important to regularly monitor veterinary practice finances?
A: Veterinary practices are considerably more complex than many other businesses because of the various services and products they provide. A veterinarian is a general practitioner, a pharmacist, a dermatologist, a pain doctor, a dentist, a surgeon and a radiologist, plus runs a hotel and spa if the practice offers boarding and grooming. Each of these services is its own profit center with its own variable and fixed expenses. Practices that are under tight financial control are able to measure the financial performance of each of their key lines of business and optimize the return on their efforts.
Q: What steps should a veterinary practice take to understand its P&L?
A: There’s an argument to be made that the more detailed and clean the P&L is, the easier and more valuable it will be to use. To that end, there are four things that you can do:
- Use the AAHA Chart of Accounts. It takes some time to implement, but all the thinking has been done around the best way to capture revenue and expenses for veterinary practices. It organizes the complexity of the practice into standardized buckets that allow you to understand the practice with detail, and even compare your practice to other practices.
- Stay current on bookkeeping. It can be time consuming if you’re doing your practice’s bookkeeping on your own, but the only way to know how you’re performing is to update your numbers on a monthly basis.
- Use the accrual method of accounting. Accrual accounting aligns revenue and expenses in the same time period, giving you the most accurate picture of what happened in the practice. It can smooth out extraordinary expenses and give you a more accurate picture of your profitability. Although this can be really hard to do, it really does yield much better data and information to make decisions about the practice.
- Train your financial muscles. Learn. Read. Ask questions of advisors and friends. Share. Getting comfortable understanding and working with financial data is 100% a learned behavior. Many veterinary professionals are data-driven diagnosticians. The practice’s financials are a diagnostic tool that you can build treatment plans around.
Q: What bookkeeping services are available from VetBooks?
A: VetBooks is a full-charge bookkeeping service. We replace sole-supplier bookkeepers that may not be vet-specific. For practice managers or owners (or often the spouses of owners) who are doing the books, we give those people their time back. We take care of it all, from revenue reconciliation to entering every expense in the appropriate account using the AAHA Chart of Accounts. We calculate and pay the practices’ state tax. We monitor accounts payable. The whole bookkeeping process is taken care of.
Q: How are VetBooks’ financial solutions unique?
A: There are three things that make us stand out. First, we work exclusively with independent veterinary practices. Independents only. Vet only. No exceptions. Second, we digitize every receipt, invoice and statement flowing through the practice. This leaves a detailed audit trail, ensures accuracy and gets rid of paper. Lastly, we deliver a fulsome and customizable set of reports to practices on a monthly basis. Practices should always be able to know where they stand at any given time. The books are done and done right, which leaves our clients with peace of mind and lets them sleep better at night.