How well does your staff understand your business? Not the medical aspects of veterinary practice, but the realities of cost and competitiveness. Staff members who understand the basics of veterinary practice finance can better contribute to practice success.
What we say and what we do
Your employees will have different levels of knowledge about their own financial matters and about business finance. Almost two-thirds of veterinary practice owners want their staff to understand pricing, overhead costs and inventory costs, and almost half (44%) wish their staff members better understood the ins and outs of cost reduction in the practice.1
Yet only 18% of these same veterinary practice owners report providing any type of financial training for their staff members, whether associate veterinarians or those in other roles.1
Doesn’t make much sense, does it? Practice owners can do better, and in fact, it’s in their best interests to do so.
Why should your staff understand your practice’s finances?
Training your whole staff about the basics of how the practice makes money can help them support decisions you make for the overall health of the business. It’s one more way to help you all work together for the same goals.
Reducing costs
Understanding where the money comes from and where it goes, and what certain services or products cost, can help reduce inventory shrinkage and ‘harmless’ little giveaways, like free fecal exams. Team members with this knowledge can better understand why it’s so important to watch out for expired or damaged products or forgotten line items on an invoice.
Identifying improvements
Practice members who physically dispense product or order may be quicker to notice sale and order patterns that keep your money tied up in unneeded inventory. They may surprise you with the number of opportunities they can spot! Similarly, staff members on the front lines of client care can share how your clients respond to your practice’s offerings, and help you find new services to offer or unwanted ones to eliminate.
Improved culture and retention
Financial transparency shows trust and respect for your staff. We trust our CVTs and veterinary assistants to restrain fractious patients, keeping us safe in our daily work. We should be able to trust them with a certain degree of knowledge about the financial state of the business. Showing trust and respect for everyone on the team also contributes to a culture that encourages them to stay with your practice.2,3 In a time when veterinary medicine is facing a retention crisis, this is essential.4
How to teach your staff about finances
Unless you are a financial expert, you probably don’t want to provide this training yourself. Fortunately, there are many options for veterinary practice owners to choose from.
General financial courses
General financial courses provide an introduction to key business concepts, like revenue, profit, and margins, and how they all fit together. The courses are available from reputable online from platforms or in-person from sources like your local community college. They are generally practical, inexpensive, and flexible. However, they are not specific to veterinary practice.
Veterinary specific training
Educating staff about the business of veterinary practice is the next step up. Many veterinary conferences now offer practice management tracks with lectures on practice finance. The AVMA offers online financial training that is specific to the world of veterinary practice. Certified Veterinary Practice Managers can access specific training on financial aspects of veterinary practice through the Veterinary Hospital Managers Association.
This form of education usually comes at a fee, but it does provide knowledge that is specific to the business side of veterinary medicine. Relevant, real-life examples can make it easier for staff members with little financial background to understand these important concepts.
The ultimate inside track
The most transparent way of educating your staff members is by sharing information about your own practice. Take advantage of the knowledge within your team. Is your practice manager a whiz at the business side of practice? Does your accountant really understand your business? Ask them to provide some staff training using specific examples from your practice.
You decide how much to share; topics like accounts receivables, new patient data, compliance levels, inventory flow and cost of goods sold (COGS) have all been recommended examples that staff members can easily understand.5,6 Individual compensation should be kept private.
Sharing specific information about your practice’s financial drives is the ultimate in transparency. It can help staff understand why you might think about stopping or expanding specific services, and how their work fits into the bigger picture. It’s also wonderful for inspiring a transparent culture and open communication.
Take the first step
Staff members who see how their individual work contributes to the practice’s profit and loss can also better understand the overall health of the business, and how it impacts your ability to pay their salary.
Whether you bring a speaker to a staff meeting, make learning about finance part of a team member’s development plan, or support a staff member in becoming a practice manager, basic financial education for all staff members is readily available. While opening the books, even just a little, might be scary at first, financially savvy staff members will be better able to contribute to your practice’s success.
References
- VMG Veterinary Economic Update. June 2024. Data on file.
- Fletcher, K. N., Bergman, M. E., Austin, J. W., Marks, S. L., Fingland, R. B., Dallap-Schaer, B., et al. Survey indicates addressing workplace environment, work-life balance, and flexibility are key to attracting and retaining veterinarians in academia. American Journal of Veterinary Research, 2024, 85(9).
- Kogan, L. R., Booth, M., & Rishniw, M. Factors that impact recruitment and retention of veterinarians in emergency practice. Journal of the American Veterinary Medical Association, 2022, 260(15), 1986-1992
- Salois, Matthew. ‘The Economics of Small Animal Veterinary Practice.’ Veterinary Clinics: Small Animal Practice 2024; 54.2: 207-221.
- Veterinary Survival Show podcast. Financial Transparency in a Veterinary Practice. Published 8 January 2021.Accessed 2 December 2024. https://mcgaunnschwadron.com/financial-transparency-in-a-veterinary-practice/.
- Shiver, Emily. ‘The Importance of team transparency’. Veterinary Practice News website. Published 13 Dec 2022. Accessed 26 November 2024. https://www.veterinarypracticenews.com/the-importance-of-team-transparency/.