operational efficiencies
DESCRIPTION
I gave a presentation on operational efficiencies to the Louisiana Veterinary Medical Association Equine members focusing on vet compensation, AR and inventory processes. These are 3 areas where any veterinary practice can make huge inroads to help reduce expenses.TRANSCRIPT
Operational Efficiencies for Equine Vets
Mike Pownall, DVMMcKee-Pownall Equine Services
www.mpequine.comwww.slideshare.net/mpownall
Expenses
• People• Product• Getting Paid
Processes • Need excellent software• HVMS
• Need systems• Need leadership• Need to measure• Benchmarking
Paying Vets
• Pay on what is collected• Pay on net
Pay on Collected
Base + Percentage
Pay on Net
Example = DRWhat are the costs involved?• Machinery – spread over 5-7 yrs• Service agreements• Repair• People• Archiving
Pay on Net
Example = DRWhat are the costs involved?Charge - $46Costs - $10Pay commission on $36
Pay on Net
Example = Bute PowderWhat are the costs involved?Charge - $15Costs - $8Holding cost – 20% or $1.6015-9.60= 10.40 to pay commission
Are Your Vets Efficient
Accounts Receivables
Accounts Receivables
• Easy to do….. If you have the resolve.•We are not bankers.• Easy to implement
Accounts Receivables4 Tiers
• Great accounts• On the fence – COD• New clients – COD• Pond Scum
Accounts Receivables
Ave Day AR
Gross ReceivablesNet Sales/365
Accounts Receivables
Ave Day AR
75,000500,000/365
54.75
30 or less
Accounts Receivables
Accounts Receivables
Inventory• 2nd largest expense in a practice
Inventory
• Closed pharmacy• Requisitions• Electronic ordering• Min/Max• Uniformity• Bulk purchasing?
Inventory• Regular counts• AA = > 5% sales weekly• A = 5-15 % sales
quarterly/monthly• B = 20-40% sales 6 months• Everything else = yearly
InventoryInventory Turns
COGSAve Inventory
Ave Inventory = Beg Inv + End Inv 2
InventoryInventory Turns
300,000 = 7.540,000
Ave Inventory = 30,000+ 50,000 2
Want 12 or more
Inventory & ARTypical
• Pay for meds in 30 days• Get paid in 50+ days• Takes us over 30 days to sell
inventory• Taking a hit 2 times.
Inventory & ARGoal
• Pay for goods in 30 days• Get paid in < 30 days• Sell inventory in <30 days
Summary• Marketing• Brand• Social Media• Operational
Efficiencies
Thank You