APL Accounting News July 2014
APL Accountants – Let’s push the profession to the next level
There is no denying that receiving business advice often comes with a bit of suspicion attached to it! Unfortunately a lot of advice given to business owners, although done with the right intention can lack credibility or the information may lack accuracy.
At APL we pride ourselves in offering a standard benchmarking process for you, so that then you know we are comparing apples with apples. We are also privileged to visit all your clinics and see what you are doing well compared to everyone else and this allows us to better understand how the profession is progressing and what strategies are important in driving the profession forwards both ethically and profitably.
But now for the first time ever probably on a global scale, we want to bring veterinary business owners together in the same room with their business reports fully prepared and normalised/benchmarked. This will mean 3 things:
Firstly, you will know your weaknesses right there and then and be able to see advice on these from someone who has credibility in the area
Secondly you will know your strengths and be able to offer advice to others knowing that what you have to contribute is credible.
Thirdly, you will be getting information from individuals who are willing to share firsthand – they will know every step required to make a process in veterinary business work.
Advice simply can’t get any better than this. Coupled with the fact that we will be running the days as a hands on fully planned workshop to get you all to prepare an annual strategic plan – something that will certainly make your business more profitable and a whole lot more fun for the new financial year.
All you have to do is book your accommodation – we have booked conference rooms and will supply lunch and morning and afternoon snacks. Venues and dates are:
- 29 August 2014 Pullman Hyde Park Sydney
- 1 November 2014 Broadbeach Gold Coast
Be There! or risk missing out on on one of the best strategic planning days ever.
How different is the profession in the USA?
A few weeks ago we were fortunate enough to visit a number of veterinary clinics in the USA in the regions around New York and Los Angeles. Thanks to Peter Weinstein who was kind enough to give up a day of his time in Los Angeles, we were able to chat to a number of business owners and have a look at a broad range of clinics. As always, we are always on the prowl to identify trends and changes in the industry.
So is it very different? Well, yes and no. The basic day to day activities of most veterinary surgeons remain very similar, and so do the challenges – profitability, human resources, high levels of competition, long work hours. However, just like in the local environment, there are clinics who perform really well and others that struggle more, once again indicating that it is possible to run a veterinary business profitably, but that it does not happen by accident.
To highlight some of the more interesting differences:
The minimum wage in LA is a lot lower than in Australia – $9 per hour! Couple that with 2 weeks paid leave and no sick leave, it becomes clearer as to why practices in the USA have more support staff and often consult with technicians in the room to help – something that, although done in some practices in Australia, does come at a higher cost. Probably as a result of this, less focus has been given to automation, and a lot of practices still use paper records for clinical notes (despite having a computerised PIMS) and then get a support staff member to type them in afterwards. If it’s any consolation however, the cliics still run with staff wages and benefits in excess of 45% of turnover which is the same as local clinics.
Valet parking! You gotta be joking! I though it was a crazy concept that so many LA clinics offered this, but then I realised that traffic and parking is so bad in LA that it would preclude clients visiting. With valet parking, instead of spending half an hour looking for parking, the client drives up to the clinic and gets out of the car with their pet, leaving the car to the attendant who then drives off and finds a place for the car.
No sales tax on services and prescribed medications. Well this obviously makes a difference to the price the consumer pays and makes veterinary services appear more affordable to the average person, but I guess after they have paid the valet a hefty tip, it all balances out.
Online pharmacies
– this one interested us a bit as this is a trend that is likely to come to Australia in the near future, and it is up to you as the profession to try to mould it into something favourable. Currently in the USA, veterinary wholesalers are setting up online pharmacies. The client then goes to the vet clinic and the vet prescribes a treatment (may or may not administer the initial dose of medication depending what it is) and sends a prescription to the wholesaler. The wholesaler then sends repeat prescriptions to the client.
What is important in this whole process is that the veterinary clinic dictates their margin (the sale price of the product), the wholesaler keeps track of the transactions and the margin is then passed on to the vet. So in theory its no different to selling the product out of the clinic. This to us would be the ideal scenario if we could force the market in this direction. What was not clear however was if there were any additional administration charges and of course how much the postage fees were as we presumed these were added on and charged to the client.
Certainly from a convenience perspective, this model is pretty attractive, allowing vets to keep stock levels lower and clients to get medications delivered. A word of warning however – give consideration to what will happen to your client list, as after 1-2 years, the pharmacy will have access to almost your entire active client list (names, addresses, telephone numbers). Before embarking on this model, I would like to see the pharmacy sign a very tight agreement about disclosuse and use of this information.
Bottom of the pack – Can’t wait for the USA trends!
Zack is a dog who is a couch potato and has an unusual life experience. His owners who were once exciting vets have now become boring accountants. They used to bring him into the exciting vet practice every day, now they bring him into a boring accounting office every day. This gives him a unique dog’s eye view on both professions.
I was realy dissapointed that I did not get to go to California. The quality of pet ownership there is obviously far superior than what I am accustomed to and I think it’s time that the team here at APL Accountants start to treat me in the luxurious manner I deserve. Why do I think this? Well, my thoughts are based on the hearsay after Mom and Dad’s trip to LA and New York.
It has been said that in New York, it is not uncommon for dogs to be carried through department stores and luxury restaurants in handbags. Yes, these committed and loving owners are prepared to carry their beloved pet all day long so that their dainty little paws don’t get dirty and their delicate little legs do not get exhausted. Of course I have to appreciate that I am somewhat heftier than the average white fluffy, and my expecation to be carried everywhere could possibly cause rotator cuff injury to my less committed owners, but the soultion would then lie in the Los Angeles trend.
So what is the fashion in LA? Well, on the West Coast, pet owners are a bit more conscious of their rotator cuffs and have come up with a compromise – the ‘pet pram’. This would still have the desired effect on my delicate paws and legs without endangering my owners upper limb. In California, almost every single hotel is pet friendly, even offering pet bedding and pet room service! People holidaying with their pets would commonly be seen taking their pet for ‘morning excercise’ in the pet pram.
Compare the above to my current lifestyle where I am forced every morning to go jogging on my own four legs – something I am sure would amount to animal cuelty in LA! I can’t wait for the LA trend to hit Queensland.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.