Operational Efficiencies

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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.

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Operational Efficiencies

  1. 1. Operational Efficiencies for Equine Vets<br />Mike Pownall, DVM<br />McKee-Pownall Equine Services<br />www.mpequine.com<br />www.slideshare.net/mpownall<br />
  2. 2. Expenses<br />People<br />Product<br />Getting Paid<br />
  3. 3. Processes <br />Need excellent software<br /><ul><li>HVMS</li></ul>Need systems<br />Need leadership<br />Need to measure<br /><ul><li>Benchmarking</li></li></ul><li>Paying Vets<br />Pay on what is collected<br />Pay on net<br />
  4. 4. Pay on Collected<br />Base + Percentage<br />
  5. 5. Pay on Net<br />Example = DR<br />What are the costs involved?<br />Machinery – spread over 5-7 yrs<br />Service agreements<br />Repair<br />People<br />Archiving<br />
  6. 6. Pay on Net<br />Example = DR<br />What are the costs involved?<br />Charge - $46<br />Costs - $10<br />Pay commission on $36<br />
  7. 7. Pay on Net<br />Example = Bute Powder<br />What are the costs involved?<br />Charge - $15<br />Costs - $8<br />Holding cost – 20% or $1.60<br />15-9.60= 10.40 to pay commission<br />
  8. 8. Are Your Vets Efficient<br />
  9. 9. Accounts Receivables<br />
  10. 10. Accounts Receivables<br />Easy to do….. If you have the resolve.<br />We are not bankers.<br />Easy to implement<br />
  11. 11. Accounts Receivables<br />4 Tiers<br />Great accounts<br />On the fence – COD<br />New clients – COD<br />Pond Scum<br />
  12. 12. Accounts Receivables<br />Ave Day AR<br />Gross Receivables<br />Net Sales/365<br />
  13. 13. Accounts Receivables<br />Ave Day AR<br />75,000<br />500,000/365<br />54.75<br />30 or less<br />
  14. 14. Accounts Receivables<br />
  15. 15. Accounts Receivables<br />
  16. 16. Inventory<br />2nd largest expense in a practice<br />
  17. 17. Inventory<br />Closed pharmacy<br />Requisitions<br />Electronic ordering<br />Min/Max<br />Uniformity<br />Bulk purchasing?<br />
  18. 18. Inventory<br />Regular counts<br />AA = > 5% sales weekly<br />A = 5-15 % sales quarterly/monthly<br />B = 20-40% sales 6 months<br />Everything else = yearly<br />
  19. 19. Inventory<br />Inventory Turns<br />COGS<br />Ave Inventory<br />Ave Inventory = Beg Inv + End Inv<br /> 2<br />
  20. 20. Inventory<br />Inventory Turns<br />300,000 = 7.5<br />40,000<br />Ave Inventory = 30,000+ 50,000<br /> 2<br /> Want 12 or more<br />
  21. 21. Inventory & AR<br />Typical <br />Pay for meds in 30 days<br />Get paid in 50+ days<br />Takes us over 30 days to sell inventory<br />Taking a hit 2 times.<br />
  22. 22. Inventory & AR<br />Goal<br />Pay for goods in 30 days<br />Get paid in < 30 days<br />Sell inventory in <30 days<br />
  23. 23. Summary<br />Marketing<br />Brand<br />Social Media<br />Operational Efficiencies<br />
  24. 24. Thank You<br />

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