Ways to save money in your Veterinary practice
First off, let’s be clear: Taking steps to increase your practice’s revenue will put money in your pocket a lot faster than cutting costs will. For a veterinary hospital, spending lots of energy on cutting costs is a futile effort. Many expenses (such as rent) are fixed, and variable costs (such as medical supplies and payroll) can be reduced only so much.
With that said, you can save money by watching your expenses more closely. Adopt these 12 strategies to save some cash.
1 Minimize sales tax
Knowing when to charge sales tax and when to pay sales tax can be confusing. On occasion, you may have paid sales tax on an item you purchased, then turned around and charged sales tax when you sold it to the client. In other words, you paid sales tax on that item twice—once unnecessarily.
The end user of an item is ultimately responsible for sales tax. If you buy a medication to use in the hospital during a pet’s treatment, you’re responsible for the sales tax—you’re the end user. But if you buy a nonprescription flea product to sell to a client, the client is the end user and should pay the sales tax.
If you charge sales tax on anything (food, oral health products, and so on), make sure you aren’t also paying sales tax when you purchase those items. That’s 6 percent to 9 percent you can save right there.
2 Reduce staff overtime
You pay 50 percent more or even double for overtime hours, and that’s an expense that’s nice to avoid—especially if your staff is running up lots of overtime. Review your team members’ hours, schedules, and workflow to determine whether you’re consistently overstaffed during certain periods of the week, then make adjustments. By juggling schedules a bit, you may be able to reduce one employee’s overtime without adding to anyone else’s.
3 Analyze your ads
Figure out what you are spending on phone directory advertisements, and then track the financial results of those ads. If you’re paying for one half-page, three-color ad that costs $2,500 per month, what kind of new clientele is the ad bringing in? If the cost doesn’t justify the new business, downsize the ad. If you’re advertising in multiple yellow pages books, track which ads are effective and drop any that aren’t.
4 Review doctors’ production charges
Are you paying your associate on production? Review the revenue sources you’ve agreed to include in the compensation formula and make sure your team is crediting them properly.
If you don’t include items such as kennel charges, grooming fees, or over-the-counter products in production pay, check that your team is not mistakenly including them in the calculation. If you find that they are, review proper coding procedures with your front office staff.
5 Price-shop supplies
Many practitioners are extremely loyal to their vendors—sometimes to a fault. Sure, you can buy certain items only from a specific vendor. But other products are available from multiple vendors, and the prices vary significantly. Establish accounts with several vendors (four is usually sufficient), and don’t be afraid to order from the cheapest one at the moment.