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

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.

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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