APL Accounting News March 2019
New equipment write off amount for small businesses
For once something in your favour! All small businesses (turnover less than $10 million) can now write off new equipment costing up to $25,000 (up from $20,000). This is until 30 June 2020. Remember this means that the full amount is a deductible expense (reducing profit and therefore your tax) rather than the depreciation amount of the item (which is only a small amount each year).
Who owns the data in my practice management system
You would be surprised to know that there are no laws in place to deal with the issue of data ownership! Intuitively one would think that if you have a list of customers, their contact details, some clinical notes and a whole lot of billing history, that the ownership of that information would rest with the business that deals with the customers.
Unfortunately this may not always be the case, and software providers sometimes feel that they have the right to either ‘lock’ practices out of their data OR even use the data for their own marketing purposes – yes their own purposes.
If you don’t believe us read this article published by Vin News, you may have thought we were overthinking things last year when we kept on at you about your data, well in fact it seems in many cases it’s not your data
The question is, what should you do about it?
Personally, we feel that the veterinary industry has to get on top of this problem quickly. I would approach my software company (or new software company) and see whether their terms and conditions contain clauses that:
1. disallow them from using your data to directly approach customers (pet owners) for any reason whatsoever without your consent each time.
2. disallow them from selling your data or giving your data to any other parties where a conflict of interest may arise eg. provide your pet food sales data to a pet store to identify areas where there are high pet food sales through vets. If any market research is to be performed, you need to give your consent.
3. allow you unrestricted access to all your financial, customer, patient and reminder data – so that they cannot ‘lock you out’ of using this data the way you want to, to improve your business.
Move away from providers that are not proactive about your data – there has never been a better time to change software with so many new and modern systems available.
Don’t let your data get turned in to ‘doggy-doo’
There has been a huge amount of movement in the last few months with practices changing software.
Like it or not, in the modern business environment, you have to embrace progress, and at APL we are all about helping you do this and encourage practices to move to newer systems.
We would however like to issue a very strong warning about how your data gets transferred from your old practice management system to your new one!
We have had some clients in the last few months that have been caught out by very poor data migrations so we think that you need to be aware of the process and impact that this can have on your business.
Generally, your new software provider will do a ‘test’ data conversion and get you to review and approve it – it is YOUR responsibility to do this properly.
In practices where this has gone wrong, the business owners have simply not given the converted data an adequate review because they probably did not know what to look for. Simply looking at your customer list and a few consults is NOT enough!
Here is what needs to be assessed and what goes wrong if it is done incorrectly:
1. All your customers, their contact details and patients need to be there – and they usually are because this is the most simple part of a data conversion.
2. All your clinical notes need to be present with the correct dates – this is obviously important because you need this to apply consistent care to patients. Again, this is normally transferred correctly.
3. People that owe you money (debtors) – many data transfers spend a lot of time getting this correct, to the point that they are prepared to ignore other more important issues in the data transfer. Business owners also put a lot of emphasis on this, but the truth is, for a normal small animal practice, the number of debtors is reasonably low and in many cases it is easy enough to manually transfer debtors into the new system as this can be done in a couple of hours.
Unfortunately, this is as far as most practices check their data, but its not enough.
4. All your invoices have to be present with the correct date. This is not only a legal requirement, it is also essential because without this you will be unable to monitor historic trends for your business. Imagine not knowing for 2 years after changing software whether your practice is invoicing more or less than last year, or whether your customers are spending more or less.
5. All your invoice items (the various products and services on each invoice) have to be present and tagged with the correct staff member and date. Without this you will lose the ability for 2 years to accurately monitor staff members performance eg. is Dr Dolittle’s average invoice value more or less this year vs last year. How many consults has Dr Dolittle been doing over the last 12 months vs Dr Who.
6. The total of all your invoice items over the year should roughly be the same as the total sales in your accounting software – this is a legal requirement should the tax office decide to audit your invoices.
7. Are all your vaccination reminders and triggers for these reminders present (sending and setting)? As soon as you start using the new system, you will need to be SENDING out reminders to patients who have had certain services such as vaccinations about 1 year ago – have these been transferred to the new system. Also, as soon as you invoice a vaccination in the new system does it SET a reminder sometime in the future correctly? A poorly run reminder system costs a practice $60,000 per vet per year – make sure that this is correct.
A few other things that you should expect:
A lot of business owners complain that “the data transfer did not transfer all my documents and templates”. The reality here is that older systems handle this sort of data very differently to newer ones and in many cases it is impossible to transfer this data across automatically – it has to be done manually. So prepare yourself for this as it varies between the software companies whether they do it or they expect you to do it.
What about things like digital xrays and laboratory reports? Again the way this is stored in different systems is highly variable and in some cases very difficult to transfer automatically. Sometimes the only solution is to keep these on the old system as a reference and look them up in the old system if needed. If this is important to you remember to ask the new software provider whether they can do it.
So where have we seen things go wrong?
Most of the data transfers we see will corrupt every single invoice and invoice item in terms of dollar value and date – this is the most common issue.
Second of all, most data transfers will not get all the reminders and all the triggers to set future reminders correct. Consider now if both of these scenarios are present – all historic vaccination dates are incorrect and you have no future reminders set – you can no longer even look back at a patient history to see when they had a vaccination and correct this manually. Say goodbye to $60,000 for each vet you have!
Finally, these incorrect data transfers leave the practice flying in the dark. Your most important KPI – how many active clients you have, relies on a 2 YEAR average of invoices and invoice dates. This means your most important KPI will be inaccurate for 2 years! The same applies for average client spend per year.
Other metrics such as average invoice value, revenue for each vet, how many consultations/vaccinations/ repeat consults you did in summer last year vs this year will also be incorrect.
So what should you do if you intend changing to a more modern system?
Simply, you need to assess your test data migration properly based on the above points. If you sign off on a bad data transfer, it’s your own fault, don’t blame the software company.
If you get stuck, contact APL Accountants and we will help you and advise you.
You made something special happen in January and February!
January and February were all about being observant and looking carefully at those Xrays. And our enthusiastic APL clients took 1600 radiographs in January and about 1300 in February – 2900 in total were the number of patients radiographed.
And with each patient being radiographed, something special happened ti a child in Africa – they got a dose of vitamins, including vitamin A, which will help their eyesight. They may never have to look at a radiograph, but at least now they can continue to read and learn.
Thanks to our partners B1G1.com for making this type of global impact possible by using their apps.
Here are the results for radiography volume in the profession over a year – beats us why it fluctuates so much!
Dog Tales – too many bits and bytes
Really?! The whole newsletter had a technology focus!
We dogs don’t really care much about tech. It’s not our fault, our noses are wet so when we type with them, the keyboard goes snotty and breaks after just one day’s use. So to us, anything about computers and tech is meaningless ‘bits and bytes’. But we do understand the concept of ‘ownership’, each of us owns a number of human slaves for example. So the concept of data ownership is something we can relate to and feel fiercly protective about.
Don’t let the PIRATES out there steal what is rightfully yours!
If they try, let us know and we might byte their bits – that’s the sort of tech we can relate to!
Daisy below showing that she is serious about byting some bits
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 informations applicability to their particular circumstances. In particular, please note that the APL dogs who often prepare this newsletter do not have opposable thumbs so have to type with their noses.