Applying best practices helps you provide great healthcare to your patients. Your veterinary business’ finances can also benefit from leveraging the best practices – of accounting.
Running a veterinary clinic or hospital requires a lot of time and attention to detail. Whether working with customers and their valued furry family members or doing the work behind the scenes to keep the business functioning, you need to make choices that bring positive results to your bottom line. If you think you’d eventually like to grow or expand your clinic or hospital; you’ll want your business running at its best. Let’s look at some of the best practices that can enhance your accounting and financial management.
Evaluating Your Processes and Procedures
When you established your veterinary clinic or hospital, you documented rules around:
- Designated staff with access to your financial accounts and records.
- Instituted guidelines and recordkeeping that help keep you in compliance with laws and regulations.
- Established systems and software that allowed you to track and manage what is vs. what was budgeted/planned.
In other words, you established internal controls for your business. But having documented processes and procedures just to avoid risk is not a goal unto themselves. The real goal: optimize the operational efficiency and effectiveness of the business aspects of your practice while continuing to provide a high level of care.
Now may be a good time to assess your existing internal controls to identify opportunities for improvement. In other words, do your own version of an audit to determine where things can be tightened up. This can be especially useful if you are planning to grow or expand your business. You’ll want to have your documentation updated prior to meeting with potential partners or your lender. You’ll need to determine what will support your clinic/hospital today – and tomorrow:
- Are your current processes and procedures providing optimal results for your business today? With the insight you’ve gained from running the practice these x amount of years, what are the areas that you’ve identified as places that could be amended or improved?
- Will your current processes and procedures effectively support your growth plans? What may “break” or not be applicable if you expand your current clinic or hospital or add a new location? What would you need to change to address new challenges that come with expansion?
Look to your CPA or tax specialist for help in this process. They can provide insights gleaned from their training and years of experience working with other veterinary practices like yours.
Updating and Integrating Your Supporting Technology
You probably spent a lot of time – and money – establishing your veterinary practice management system. Most provide support for some or all of these functions:
- Appointment scheduling
- Staffing management
- Inventory tracking and management
- Client invoicing
- Automated communications for marketing and client management
- Electronic medical records (EMR)
Many also integrate with other software for lab records, pet insurance processing, and dedicated accounting systems. But software can outlive its usefulness or put you at risk if not maintained properly. You’ll want to assess your current system for both risks and benefits to your financial management goals:
- Is the software at its most recent release level, providing protection against malware, etc.? What would it take to bring it up to current standards if not? Is it possible to do that, or has the software vendor ceased to support the software (so it is no longer issuing updates)? If your software is no longer supported by the vendor or is planned to be “sunsetted”, you’ll want to prepare for a transition to something that is being maintained to better protect your data assets from malware and hacks.
- Does the software work the way you need it to work? In other words, are you having to bend your work processes just to fit the awkwardness of the software, or does it actually support how you need to do your work? If you and your team are spending time working around the system, that is expensive time that could be saved and used for activities that bring in revenue, such as seeing patients.
- Does your software’s accounting functionality meet the requirements of your business? Does it provide the reports you need for filing taxes or applying for additional funding with only a few clicks, or do you need to export and rework the data in a spreadsheet to put it into the right format? How much time are you wasting monthly/quarterly/annually to do that? Does it provide the security controls and an automated audit trail that allows you to align it with your internal controls? In addition to taking too much time, without the right features, your accounting system could put you at risk for non-compliance with regulations.
There are a variety of practice management systems that integrate with cloud-based accounting packages like Quickbooks. If your current software is not meeting your accounting needs but is otherwise a good fit for your clinic/hospital, this could be a great way to address the gap.
