Understanding Financials for Veterinary Clinics - Part 1: Profit & Loss Statements

Apr 7, 2021

In this podcast, Dr. Michael Bugg and Dr. Jonathan Leicht discuss the importance of understanding financials for veterinary clinics. They provide an overview of Profit & Loss Statements (P&L) and EBITDA, focusing on how P&L statements help understand clinic operations, common revenue items, tracking of revenues and expenses, payroll and cost of goods/expenses, and general and administrative expenses.

Ask episode

Chapters

Transcript

Episode notes

Introduction

00:00 • 2min

Real Estate Deals and Vacation Trip

01:42 • 2min

Introduction to Profit and Loss Statements for Veterinary Clinics

03:39 • 9min

Balancing Payroll Costs in Veterinary Clinics

12:39 • 10min

Importance of IBITDA and Clinic Spending

22:29 • 2min

FULL DISCLOSURE AND DISCLAIMER:

The following episode is based on our experiences in practice to date. We are not tax experts or accountants. Please seek proper professional advice on the subject of taxes and accounting for your business.

When it comes to understanding financials for veterinary clinics, it pays to ask the greatest guiding question of all:

"If we bring in a dollar of revenue, what are we left with at the end that is going into the owner's pocket?"

The financial statements provide you with the answer to this question, while along the way providing insights into how money is earned, how it is spent, how it is invested, and how it flows within your veterinary business.

Over the next two episodes, Dr. Michael Bugg and Dr. Jonathan Leicht provide a high-level overview of Profit & Loss Statements (otherwise known as P & L) and EBITDA (otherwise known as Earnings Before Interest, Taxes, Depreciation, and Amortization).

In this episode, Dr. Leicht breaks down the P & L statement, providing knowledge and insights from his experiences on:

How the P & L statement helps you understand what's going on in your clinic
What the common revenue items in a veterinary practice are
General time periods in which P & L statements are reported and tracked
Trending revenues and expenses over time
The two major categories of expenses to focus in on: payroll and cost of goods / cost of sales
Breakdown of common cost of goods / cost of sales
General and administrative expenses
The average industry percentage of revenue that each expense represents
Using the numbers to help balance the needs and desires of employees

Was this episode of the show helpful for you? We'd love to know - please feel free to drop a comment or send us an e-mail to theveterinaryprojectpodcast@gmail.com to let us know your thoughts.

If you liked the show and want to stay in the know, please subscribe to the podcast on the listening platform of your choosing.

Want to join our community of like-minded Veterinary Professionals? Send us an email at theveterinaryprojectpodcast@gmail.com and we'll get you connected to our private Veterinary Project Facebook group.

Any questions, comments, feedback, or requests for guests can also be sent to theveterinaryprojectpodcast@gmail.com. Thank you for listening and we look forward to seeing you next Wednesday for another episode of The Veterinary Project Podcast!

- Jonathan Leicht, DVM and Michael Bugg, DVM