Veterinary Practice Behind-the-Scenes: Balancing Business and Care

“I wish I knew as much about finances, payroll, and taxes as I do about treating animals and running my clinic.” – Every veterinarian ever.

Being a veterinarian is a passion-driven profession, but for many practice owners, it’s also a daily juggling act. They spend their time caring for animals, providing top-notch treatments, and leading their clinics, but many feel overwhelmed when it comes to managing the business side of things. Unfortunately, the financial aspects of running a veterinary practice—such as payroll, bookkeeping, taxes, and budgeting—often feel like a completely separate challenge.

It’s a common sentiment among veterinary practice owners:

Most spend 2-3 hours a week struggling with bookkeeping and payroll.

These owners frequently face an ongoing battle to ensure their clinic is financially sound, and they often can’t confidently assess the financial health of their practice. As a result, it’s easy to feel like there is never enough time or energy to focus on both animal care and the business side of the clinic.

Table of Contents

1. The Balancing Act: Animal Care vs. Financial Management
2. Interesting Facts About Veterinary Practice Finances
3. Solutions for Veterinary Practice Owners
4. Veterinary Finances Should Not Be An Afterthought
5. What is a Team of 3 for Veterinary Accounting 

The Balancing Act: Animal Care vs. Financial Management

Veterinary professionals are experts in their field, but the skills required to run a successful business—especially when it comes to finances—are vastly different. Despite their proficiency in diagnosing and treating animals, many practice owners find themselves unsure of how to tackle critical financial tasks. 

Here’s a breakdown of some of the common struggles:

• Payroll Management - Payroll can be complicated, especially when it involves multiple types of employees, including veterinarians, technicians, receptionists, and support staff. Ensuring everyone is paid accurately and on time while factoring in taxes, benefits, and deductions can be a full-time job in itself.
• Bookkeeping - Keeping accurate financial records is essential, but it can be time-consuming. From tracking income and expenses to categorizing every transaction, the process of managing finances often falls to the practice owner, who may lack the expertise or desire to deal with it.
• Tax Compliance - From sales tax to employee withholdings, understanding the nuances of tax obligations is essential for avoiding penalties. Many veterinary practice owners feel overwhelmed by tax season, especially when they don’t have a clear sense of their financial position year-round.
• Budgeting and Financial Forecasting - It’s difficult to assess whether a veterinary clinic is financially healthy without a clear budget or financial forecast. This lack of clarity can prevent practice owners from making informed decisions about hiring, investing in new equipment, or expanding services.

Interesting Facts About Veterinary Practice Finances

1. Veterinary Clinics Spend More on Payroll Than Most Small Businesses:
   According to industry reports, payroll often constitutes around 40% to 50% of a veterinary clinic’s total expenses, which is higher than many other small businesses.
2. The Average Veterinarian Works 50-60 Hours a Week:
   This includes both clinical and administrative work. When you factor in the additional time spent on business-related tasks like payroll, bookkeeping, and taxes, it’s clear why practice owners often feel like they are stretched thin.
3. Increased Competition Among Clinics:
   With an ever-growing number of veterinary clinics opening across the country, practice owners must maintain a strong financial foundation to stay competitive. That means staying on top of financial reports, forecasting, and efficient use of resources.

Solutions for Veterinary Practice Owners

So, what can practice owners do to simplify their financial management?

• Outsource Financial Tasks - Hiring an accountant or bookkeeper can help alleviate the burden of financial management. Professional services can assist with everything from payroll to tax filing, leaving practice owners more time to focus on patient care.
• Invest in Financial Software - Using specialized financial management tools designed for veterinary practices can streamline bookkeeping, track income and expenses, and help generate financial reports with ease. These tools often include payroll integration and help with tax compliance.
• Seek Financial Education - Many veterinary professionals benefit from learning the basics of business finance through workshops, webinars, or even mentorship from other practice owners. Having a better understanding of financial terms and processes can provide more confidence when reviewing reports or making decisions.

Veterinary Finances Should Not Be An Afterthought

Running a veterinary clinic isn’t just about caring for animals; it’s also about running a successful business. For many veterinary practice owners, managing finances can feel like a whole new world. While animal care is their passion, the financial challenges are often an afterthought—until they become overwhelming. By recognizing the importance of financial management and seeking out the right tools and support, veterinary professionals can achieve a better work-life balance and ensure their clinic remains profitable for years to come.

What Is a Team of 3 for Veterinary Accounting?

Accounting teams are made up of professionals who manage day-to-day and strategic financial services within a business. But instead of trying to hire a professional bookkeeper, tax CPA, and CFO and not having enough steady work to keep a whole team of financial experts busy, your company can contractually hire these veterinary expert professionals on a part-time basis.

Enter Fractional Accounting Teams of 3. Let's take a look at what makes up a fractional accounting Team of 3 and what they do:

1. Fractional CFO: Your fractional CFO will proactively advise you on financial goals and decisions. Along with providing models and insights, the fractional CFO can advise you and the business owner on changes to the tech stack, automation options, and more. 

2. Fractional Controller: Fractional controllers manage data. They'll help your in-house staff stay compliant with financial regulations and find potential tax savings for your organization. Turn to a controller for help with financial statements and data-based analytics.

3. Fractional Client Service Manager: Financial teams and client services need to have clear lines of communication. Your fractional CSM will support your teams as the main point of contact for payroll, bookkeeping, and more. They can educate your team, manage payroll, and create processes for customer transactions.

The services a fractional accounting team can provide include:

• Financial Strategy
• Statement Preparation
• Accounting System and Procedure Oversight
• General Accounting and Back-Office Support
• Tax Planning and Projections

For veterinary practices, having a Team of 3 in place is a smart strategic move. This approach provides not only the long-term strategic capabilities of financial executives, but also experts who can establish processes for accounting, billing, and managing taxes which are vital for running a business.

Veterinary practices, regardless of size, no longer have to try and make do without financial expertise. At Dillon Business Advisors, we provide fractional services for small and growing clinics that serve as the cornerstone for your financial operations. 

Our Teams of 3 will help your veterinary practice grow by providing proactive expertise, financial knowledge, and the support your business needs to grow.

Contact us today for a financial business analysis.