Measuring financial performance
Financial reports can be executed on a clinic level or individually per employee. The goal here is to ensure that financial targets and productivity standards are being met, and to identify where support can be embedded. Running these specific reports can:
Measure overall business performance and profitability. This is often performed through assessing gross and net revenue, total sales and profit margins.
Ascertain if key performance and financial metrics are achieved. Typical KPIs in this category may include measuring average transaction value (ATV); average consultation time; invoice numbers; and revenue per veterinary surgeon.
Before collecting this data, it is necessary to have a benchmark. You may find it helpful to use standard industry benchmarks or to set your own in line with your short and long-term business goals. You may decide to perform a wide audit to begin with, before settling on specific areas to focus on.
KPI reports can be beneficial for employee development as data isn’t subject to bias. However, it is important to establish context alongside any result, as this will ultimately identify any area in need of development or change. For example, if one vet is consistently showing a lower ATV than other vets in the practice, it may be down to something simple, such as the individual not invoicing correctly, or not performing as many procedures because the rota is a little unbalanced. Therefore, the data collected should be seen as a supportive tool to initiate discussion, rather than a complete process on its own.
Performance reports can also allow us to share best practices by identifying which employees are more experienced at specific procedures, simply by measuring the number of procedures performed.
Has a vet performed 80 per cent more echocardiograms or cruciate surgery repairs than the rest of the team? Great! Then let’s arrange an in-house training session so that the rest of the veterinary team can benefit from this knowledge and skillset.
Emerging threats to animal health can also be detected through analysing patient records.
Disease trends and new patterns are not always immediately apparent, but collecting this health data can help to recognise local disease outbreaks; prompting public awareness campaigns and ensuring that effective treatment is available.
Let’s take a look at three case studies on how measuring financial performace has helped veterinary practices:
A six-vet practice runs KPI reports through their PMS every month. The data has identified that two senior veterinary surgeons bring in a consistently high ATV, whereas a new veterinary team member is struggling to meet their target.
The practice manager arranged a supportive one-to-one discussion with the new employee, who acknowledged that they needed to build confidence in their diagnostic work-ups. They were also unaware of how the PMS could set up client reminders for booking a second appointment, meaning that they were missing out on this revenue and follow-up patient care.
A structured mentoring scheme was therefore introduced, with the senior veterinary surgeons acting as mentors for new members of the team. In just one month, the new veterinary surgeon saw their ATV increase by 13 per cent.
Senior management at a four-branch practice group regularly sent daily sales reports to the respective practice managers. Historically, only the data for the relevant practice was issued, but it was later decided to circulate sales reports for all the branches so that performance could be compared. There was a clear focus to keep this new comparison positive so that best practice could be shared openly across the group. New, fun incentives were also introduced: the clinic with the highest monthly sales was treated to a takeaway lunch of their choice, and if an individual practice increased their sales by a set percentage, they could decide how they’d like their success to be celebrated. This could range from a new piece of clinical equipment, updated staffroom furniture or a team night out. By getting the whole practice team involved, each employee took ownership in their contribution towards the practice’s success and enjoyed a sense of accomplishment once their target was met.
We can therefore conclude that tracking performance KPIs has multiple benefits, both on a wider scale and for individual employees. The data collected also provides opportunity to improve patient care, ensure best practice and treatment consistency.
A smart practice management system can make this process easy, and subsequent discussions can be supported with the data that the report collects.
The important point to remember is that action must take place once the reports have been run through your PMS. Without action, the data becomes meaningless.
With a bit of practise, performance-based data analysis can become second nature; providing informed action plans that will break down business goals into achievable steps for the whole practice team.
