Illinois Svbma finance- 2019
•Download as PPTX, PDF•
0 likes•53 views
A presentation who's goal is to get a medical professional familiar with the business finance aspects of a practice of any type. Whether you work in a private practice, for a corporation or a non profit, this will apply to you!
Recommended
Recommended
More Related Content
Similar to Illinois Svbma finance- 2019
Similar to Illinois Svbma finance- 2019 (20)
More from Raymond J. Ramirez DVM speaking
More from Raymond J. Ramirez DVM speaking (20)
Recently uploaded
Recently uploaded (20)
Illinois Svbma finance- 2019
- 1. "Financial statement jeopardy! Do you miss more for not looking or for not knowing?". SVBMA Illinois
- 3. Raymond J Ramirez DVM University of Illinois 1986 Why listen to me?
- 4. I met my wife in one of “Miss V” ballroom dance class!
- 5. Why listen to me? • Worked Chicagoland ER 1st year out of school • AAHA hospital 2+ years • Locum tenens for 5 years based in Milwaukee WI • Moved base to Maroa IL and worked in 100 different practice in 18 years. Mostly repeat • Puchased Lakeview Veterinary Clinic Dec 2008 – 2009 1st yr gross $270K – 2018 gross $585 K
- 6. Why are you here? • What year in school? • How many have worked in a veterinary practice? • How many want to own a veterinary practice? • How many are not sure about ownership, but are intrigued enough to be here? • How many have had any job where you got paid, and had to show up at certain times? • Free food?
- 7. Goals Give you understanding of what practice finances are like Analogies relevant to you Guest speakers from success in business outside of Vet Med Could spend an hour
- 8. Choose a category. You will be given the answer. You must give the correct question. Click to begin.
- 14. Revenue & Expenses Bookkeeping & Software Business & Payroll taxes 10 Point 20 Points 30 Points 40 Points 50 Points 10 Point 10 Point 10 Point 10 Point 20 Points 20 Points 20 Points 20 Points 30 Points 40 Points 50 Points 30 Points 30 Points 30 Points 40 Points 40 Points 40 Points 50 Points 50 Points 50 Points Start up Financing Financial Statements Shark tank ? 3 min Huffington 2 min Cak Cole 2 min Sarah Blakely 5 min
- 15. Of the three main financial statements: Cash flow, Balance Sheet, and Income Statement, this one gives you an idea of how much you are worth on a certain date. Cat1 a1
- 16. What is the balance sheet? Cat1 q1
- 17. Balance sheet: picture at date in time. Assets = Liabilities + Equity Cat1 q1
- 18. Raymond J. Ramirez DVM May 31, 1986: Assets: Checkbook balance $653.00 First and last month rent paid: $850 Car: $3,000 Furniture and belongings $ 10 DVM degree Cat1 q1
- 19. Raymond J. Ramirez DVM May 31, 1986: Liabilities: Credit card debt: $0 Student loans: $10,000 (1986 ave $32,000) Car debt $0 Cat1 q1
- 20. Raymond J. Ramirez DVM May 31, 1986: Equity: DVM degree No home or ownership. Cat1 q1
- 21. Raymond J. Ramirez DVM May 31, 1986: Cat1 q1 Assets = Checkbook $653. PPd rent $850 Car $3,000 Furniture etc $10 DVM degree $4,513 Liability Credit card $0 Student loans $10,000 Car debt $0 = $10,000 + Equity DVM degree Age + ($5,487)
- 22. Of the three main financial statements: Cash flow, Balance Sheet, and Income Statement, this one is the best to look at to figure out how much profit the practice is making. cat1a2
- 23. What is the Income Statement? cat1q2
- 24. Of the three main financial statements: Cash flow, Balance Sheet, and Income Statement, this one helps you see where your money goes. cat1a3
- 27. Of the three main financial statements: Cash flow, Balance Sheet, and Income Statement, this statement(s) is the best, should evaluate if you are looking at a practice to purchase. Cat1 a4
- 28. What is: Cash flow, Balance Sheet, and Income Statement? Cat1 q4
- 29. Cash flow: can I make payroll/ pay bills Balance Sheet: what is the value of practice, how much debt does it have Income Statement: how profitable is it (can I pay the cost of purchasing without dipping into my salary) Cat1 q4
- 30. How are financial statements like a diabetic patient? Cash flow: Urine analysis Balance Sheet: Fructosamine Income Statement: Blood glucose curve Cat1 q4
- 31. In some practices there are two items that should be included as an expense, but it may not be, thus causing falsely low expenses, and thus falsely elevated profit. cat1a5
- 32. What is Fair market rent of building & payment as to Dr owner? Cat1 q5
- 33. How should a Doctor owner should be paid: Cat1 q5 DVM duties Manager (+/-) Owner & decision maker Return on Investment
- 34. What happens when you don’t know where your money goes? Cat1 q5
- 35. In a regular daytime practice, this is the main revenue at a veterinary practice. Cat 2 a1
- 36. What is professional services? Cat 2 q1
- 37. Pick the top five following categories in order by by revenue Cat 2 q1
- 38. Animal Care (ACP) Anesthia (AN) Controlled substances (CS) Dental (DE) Exams (EX) Food (FD) Hosp/ boarding (HB) Injectable meds (IM) Insecticides (IS) Lab in house (LI) Lab outside (LO) Medical services (MSV) Pharmacy (PH) Procedures (PRO) Radiology(RA) Surgery (SX) Vaccinations (VC) Worm medications(WM) Cat 2 q1 18 categories – choose top 5 of typical small animal hospital or clinic
- 39. Top ten revenue by category Cat 2 q1 Exams Vaccines Lab inside Pharmacy Insecticide
- 40. This is the number one expense in a single doctor practice. Cat 2 a2
- 41. What is employee (Dr and staff)? Cat 2 q2
- 42. 2017 Lakeview Veterinary Clinic: Cat 2 q2 Non DVM staff 26% DVM compensation 17% Fixed expenses 12% Health & Liability Ad & Promotion Office & computer Phone & Internet
- 43. 2017 Lakeview Veterinary Clinic: Cat 2 q2 Non DVM staff 26% DVM compensation 17% Fixed expenses 12% Variable Expenses 26% Drug & Medical supplies 21% Lab costs 3% CC fees 2% ($10,000) Facility expense: 8%
- 44. When you are hired at a practice, this category of expenses does not change. Cat 2 a3
- 45. What are fixed expenses? Cat 2 q3
- 46. When expenses in drugs and medical supplies go up, this category of income better also be going up in dollars. Cat 2 a4
- 47. What is pharmacy and HW+flea & tick? Cat 2 q4 Will the percent of revenue change if the pharmacy and HW+flea & tick increases?
- 48. The business of Veterinary practice can be best described by 2 of the following words: necessity, medical, essential, luxury, manufacturer, distributor, retail, franchise, online, basic, fundamental, convenience, bargain, merchandise, wholesale. Cat 2 a5
- 49. What is: luxury retail business? Cat 2 q5
- 50. Think about from pet owner standpoint: What will they do if you are not available when they need you? If you are not there, will they come back? Cat 2 q5
- 51. Think about from pet owner standpoint: What will they do if you are not available when they need you? Do they need you? What percent of pets see a veterinarian? Cat 2 q5
- 52. Pet owners Cat 2 q5 Point: not every pet sees a veterinarian, and many have difficult to affording the care.
- 53. This is a common way to start a business. It can be difficult to do this in veterinary medicine. Cat 3 a1
- 54. What is self finance ? Cat 3 q1
- 55. How would make practice different for family? Cat 3 q1
- 56. Make it practical today: how would look to fund DVM degree? Cat 3 q1
- 57. What is: Cash flow all expenses except tuition. No loans for room, board, books. Not possible? Dr Dani McVety Cat 3 q1
- 58. What is: Do not use DRIP or any other ‘repayment plans’. Live as if salary = $40,000 Use $30,000 to pay down debt (get side jobs at ER) Even $300,000 debt GONE in 10 years!! Cat 3 q1
- 59. This can be a way to get some help without going all to a bank to get started with cash. Cat 3 a2
- 60. What is ask family or friends? Cat 3 q 2
- 61. While local banks may not understand financing, this business, which sponsors many VBMA conferences, also helped us when we purchased Lakeview Veterinary Clinic. Cat 3 a 3
- 62. Who is “Live Oak Lending”? Cat 3 q3
- 63. When you have a loan in place, this is something, that while is important ‘down the road’, is even more critical for cash flow at the beginning of your practice ownership journey. Cat3A4
- 65. This can be the number one reason you do not get start up financing – it is something we all have – but YOU think no one else has them but you. Cat3 A5
- 66. What is making a decision that is out of your comfort zone? Cat3 Q5
- 67. When working with business books, while similar, this type of personal account is not the same type of accounting that you will use in the practice. Cat4 A1
- 68. What is personal checking account? Cat4 Q1
- 69. Before even picking a software, you need to understand this about Bookkeeping- it will help you to organize how your books will be set up. It is similar to your expenses. Cat4 A2
- 70. What are business income and expense categories? Cat4 q2
- 71. Daily Double
- 72. This is one way to keep your expense receipts. You don’t end up with paper. Cat4 A3
- 73. What is a PDF of the receipt? Cat4 q3
- 74. Will IRS take it? Audited … TWICE! The last year in 2014, the auditor said that a PDF of the receipt is perfectly acceptable! Cat4 q3
- 75. If you are buying an existing practice, this is probably the best software to use. Cat4 a4
- 76. What is the software they are already using? Cat4 q4
- 77. According to the Association of certified Fraud examiners, this is the percent of revenue a typical organization (not necessarily practice) looses due to fraud. The median amount lost was this number, and the fraud was going on for this many months. (looking for 2: % revenue lost & how long) Cat4 A5
- 78. What is 5% of business revenues lost to fraud each year. Median loss was $140,000. Frauds lasted an average of 18 months before being detected? Cat4 q5
- 79. Four practical & Simple ways to keep fraud from happening Principal #1: separate duties For example, if the person who receives an inventory shipment (control of the asset) is the person who pays the bill (control of the record), it is conceivable that large amounts of inventory could be stolen unless checks and balances are in place. Often, these systems are virtually non-existent in veterinary practices. Cat4 q5
- 80. Four practical & Simple ways to keep fraud from happening Principal #2: Restrict access Only person that needs resource has access – no matter how long been working for you. Blank checks stored off site or in safe Large inventory purchases (see Dr R "8 things attourney's, accountants and practice managers DON'T tell you about practice ownership“ on why never do that) have only small amount on site, and rest off. Cat4 q5
- 81. Four practical & Simple ways to keep fraud from happening Principal #3: Let staff know you are checking things We audit our flea/ tick product and food every 2 week for ordering. If we are short – we are asking everyone, and bringing up at bi-weekly staff meeting that we are short. One DVM came in late to check on patient and found associate putting dog food into his car. We take deposit to bank nightly, and if not match, have staff member find error Cat4 q5
- 82. Four practical & Simple ways to keep fraud from happening Principal #4: always have bank statement mailed to your home and reconciled by yourself or independent person – not office manager. Can tell of many stories some well over $400,000 that could have been prevented. Problem is not trust, but trust too much, and employee can see a window when they have a need. Cat4 q5
- 83. While not truly a tax, it is a cost of doing business as people use only plastic. Cat5 A1
- 84. What are merchandise credit card fees? Cat5 q1
- 85. Lakeview Veterinary Clinic: Purchase Dec 2007. 2008 revenue by payment: 33% cash, 33% credit card, 34% checks 2018 revenue by pament: 22 % Cash 70 % credt & debit 8% checks Credit card fees 2018 $10,342 Cat5 q1
- 86. Discovered by my excellent Office Manager. In 2016 upgraded CC machine to use chip reader on cards. If credit card or swipe debit = 3.78% of transaction Debit chip 0.75% OM noticed, merchant company was still collecting for chip debit, same as swipe debit Cat5 q1
- 87. Business taxes on property, & sales taxes on items purchased would be classified in which category: fixed or variable expenses. Cat5 a2
- 88. What is property tax = fixed expense and sales taxes = variable? Cat5 q2
- 89. These are 2 of the taxes removed from your paycheck that go to Federal programs. Cat5 a3
- 90. What is FICA & FICA medicare? Cat5 q3
- 91. Cat5 q3 FICA = Federal Insurance Contributions Act (Social Security) FICA Medicare = Medicare
- 92. Employee share of FICA = ? 6.2% of gross pay Employee share of FICA Medicare = ? 1.45% Cat5 q3
- 93. Employer share of FICA = ? 6.2% of gross pay Employer share of FICA Medicare = ? 1.45% Cat5 q3
- 94. Part of the ‘cost’ of having employee’s. Was not case before 1930. From a practical standpoint, 50% more Cat5 q3
- 95. Depending on the state your practice is in, or where you live, you may see this taken from your paycheck as well. Cat5 a4
- 96. What is State income withholding tax? Cat5 q4
- 97. Cat5 q4
- 98. This business expense, while in the strict sense is not labeled a tax, but every state assesses every business for this ‘insurance’ which takes care of employees if they are injured on the job. Cat5 a5
- 100. Final Jeopardy
- 101. Final Category Make your wager Too big to fail Final jeopardy category
- 102. This is what you can do when you are a big company and everyone knows your name. Final clue Ans
- 103. What is: there is NO such thing as too big to fail? Final question
- 104. • Toys r us • Sears • AOL • What about in veterinary medicine?
- 105. In 1986 • Tuckaway Veterinary clinic, Milwaukee WI, – 14-18 OHE & Castrations • Per week – OHE & Castrations done at shelters: none • Pharmacy was taught to be a ‘profit center’ – All medications from veterinary clinics.
- 106. In 2018 • Lakeview Veterinary Clinic • Surgery cases last week: • 2 OHE – 5 tumor removals – 1 foreign body • Pharmacy only 8% of revenue – Must be competitive, not just traditional retail markup margins
- 107. In 2048 Jefferson Veterinary Clinic Surgeries? Euth? pharmacy – if any? Will we be replaced by computers?
- 108. So what if you hit a brick wall? Now you have the secret ingredients to help you avoid being ‘the other people’. Practice ownership is NOT a finite list. You can buy a multi million dollar practice. Maybe easier than my solo doctor practice (I did not say that.
- 109. Goals Give you understanding of what practice finances are like Could spend an hour on each category Analogies relevant to you Guest speakers from success in business outside of Vet Med
- 110. Questions? "Chance favors the prepared mind." Louise Pasteur Louis Pasteur's theory of germs is ridiculous fiction. Pierre Pachet, Professor of Physiology at Toulouse, 1872
Editor's Notes
- On each type – but not point here – could be later Vid: 3 min Lori Greiner- point is how to integrate life “work –life balance”
- 10
- 11
- 12
- 13
- 14
- When going to clue – with answer – wait until see ‘hand’ to click back Or slide 15 The only way to get benefit from this game – is to make a decision before we reveal the question. If you just ‘follow along’, you will not remember what we present. Commit!!! It costs nothing now. – If you don’t’ later – big time! Final Jeopardy: 30 sec Pet med; 8 min toyrus; 4 min brick wall
- 16
- Balance sheet is taken at a point in time. C1 A1 For example, ,you could have balance sheet of me: May 31, 1986 and may 31, 2016
- Both sides balance. How would that look like for me? Assets: cash, building, inventory Liabilities: what owe to bank, vendors (remember point in time), credit cards, Equity – owners share
- Balance sheet is taken at a point in time. For example, ,you could have balance sheet of me: May 31, 1986 and may 31, 2016
- Explain about credit cards in 80’s Paid cash for inexpensive car as freshman summer job
- Explain about credit cards in 80’s Paid cash for inexpensive car as freshman summer job
- Hidden slide shows the 2019 balance sheet Balance sheet is at one point in time. Example: April 14 this year, then April 16- had to pay $10K to IRS & 2K to Illinois
- C1Q2
- Cat 3 A3 Cash flow as a picture of the Checkbook not count depreciation
- Cat 3 A3 Cash flow as a picture of the Checkbook not count depreciation and other ‘write offs’ that will show up on Income statement.
- What does each tell us as you are looking at short term and long term health of the practice.
- What does each tell us as you are looking at short term and long term health of the practice.
- Just as in the diabetic patient, we need all of these to evaluate the most thoroughly, if we our clients are limited on funds, we may have to pick and choose. While we may not / should not be limited on resources to generate these reports, (software can do with a few keystrokes) when your time is limited, you may only look at one or two on a regular or annual basis, but you should look at all together to get a good overall health of the practice.
- Talk about clinic in Mt Zion where he said was very profitable Practice in Lockport. Both were wise business men, bought on outskirts of town, and in 30-40 years, town grew around them, and now very high traffic area, and frankly, has hard time being paid for as a clinic. Maybe go back to main page – Sharktank vid 3 min long on not knowing what is going on with money
- 3:10 Talk about where could money have gone?- may not use
- Show practice
- Show practice – will give choice of 18
- Show practice
- 2 min Kat Cole – careful against success Remind them my LI does NOT include fecals But does include skin scrapings, cytology on lump/ bumps, ear cytology
- Cat 2 q3
- Cat2 a4
- Cat 2 q4 Think about it, what do you have to worry about if the expenses are going up, but the $ income is flat? Will the % of revenue change?
- Cat2 a5
- C2 q5
- C2q5- Example of Jim Lambert – called for ER and never went back. When I was not open Sat, clients never came back.
- C2q5- Think of stress, and dopamine which bonds you to the stressful situation hero.
- C2q5+ - https://www.iii.org/fact-statistic/facts-statistics-pet-statistics https://www.avma.org/news/javmanews/pages/130201a.aspx Point – Not every pet sees a veterinarian and you
- Cat 3 a1
- Cat 3 A 1 Corollary Sarah Blakely v ~ 5 min on how to think different Don’t defend or explain just do – as you look at buying a practice – my practice 2 things: AAA how to make practice work when is your practice open? Maybe to have daytime with family, you are open from 6-9 pm. Or closed sat BBB Student debt Everyone does it this way – ‘cash flow’ all expenses except tuition do NOT do drip- live on 40K and pay off debt with 30K and be done in …. years – family
- Example of St Paul VC in Milwaukee – from 6-9 pm while spouse works during day. Closed Sat AND sun And ½ day during week
- Student debt Everyone does it this way – ‘cash flow’ all expenses except tuition do NOT do drip- live on 40K and pay off debt with 30K and be done in …. years
- https://howigotintoveterinaryschool.com/lap-of-love-dani-mcvety/ Lap of Love owner Student debt Everyone does it this way – ‘cash flow’ all expenses except tuition do NOT do drip- live on 40K and pay off debt with 30K and be done in …. years
- What did Sarah Blakely do with her idea? do NOT do drip- live on 40K and pay off debt with 30K and be done in …. years
- Cat 3 A2
- Cat 3 Q2
- Cat 3 a3
- Cat 3 q3 Talk about coming out to city and giving hints.
- Cat 3 a4
- Cat 3 q4 Another name for this is ‘cash’ or ‘ER reserve’. Don’t start off so slim that you have nothing
- Cat 3 a5
- Cat 3 q5 1:30 min Ariana Huffington – obnoxious roommate in your head 1:30
- Cat 4 a1
- Cat 4 q1
- Cat 4 a2
- Cat 4 q2 In past, and at practices you may look at, a ‘chart of accounts’ was what a practice accountant suggested. AAHA has standardized this and trying to get practices to implement, so we can all be on the same page, so you can compare what my practice does to your practice., Or one you want to buy.
- Cat 4 a3
- Another practical tip – as you categorize things – try to begin thinking in terms of what your accounting software category wants to use. It will make it easier!
- NOTE: not if you are very familiar with a different program – worth the money to transfer the numbers and information. But keep the old software for at least 3 years for look back. Quick books is most popular
- C4A5For embezzement SO looking for % of revenue lost from fraud, Median amount lost and how long was it going on before detected.
- Remember, that means half of losses less than $140K, and half more
- I know of a practice where the OM was ordering $30K of Frontline, not even taking into clinic – putting in car, and was selling at dog shows. Clinic owner found out when client said saw Jane Smith selling Frontline at dog show.
- I know of a practice where the OM was ordering $30K of Frontline, not even taking into clinic – putting in car, and was selling at dog shows. Clinic owner found out when client said saw Jane Smith selling Frontline at dog show.
- I know of a practice where the OM was ordering $30K of Frontline, not even taking into clinic – putting in car, and was selling at dog shows. Clinic owner found out when client said saw Jane Smith selling Frontline at dog show.
- I know of a practice where the OM was ordering $30K of Frontline, not even taking into clinic – putting in car, and was selling at dog shows. Clinic owner found out when client said saw Jane Smith selling Frontline at dog show.
- In a one doctor practice: when first p
- Sounds like a lot But by % is 580K/10K = 1.72%
- when upgraded, calculated would save $7,500 !! That is money in our pocket!
- Why is sales tax variable? Why is property tax fixed?
- FICA = OASDI (Old Age, Survivors, and Disability program: Social Security)
- Employer matches what the employee pays into the FICA & FICA Medicare Employee share from their paycheck Employer pays from the income of the business - practice
- Than what we pay staff members is ‘cost’ from other govt mandated expenses. FICA = OASDI (Old Age, Survivors, and Disability program: Social Security)
- So how much of my paycheck is out because of
- What is insurance vs tax? Tax – a duty paid by an individual or business owed to the government.
- Final 30 sec music begins after 10 sec Or click lower left icon
- 105
- Be willing to adapt Dave Ramsey – 4.30 min of Toys R Us.
- What was lost also was the bonding with veterinarian / clinic from stressful event: sx What was worse, is many veterinary clinics piped in cable animal planet with Pet med commercial running 7 times / 30 min show!
- Elaborate a bit on why – the pharmacy cheap scripts to get you in the door “loss leader” and internet pressure from Betty white. I know of 2 clinics around me that closed after I started in Dec 2017
- 4 min vid
- On each type – but not point here – could be later Vid: 3 min Lori Greiner- point is how to integrate life “work –life balance”
- What are people telling you is pure fiction? Graduating from veterinary school debt free? Purchasing a 5 doctor practice? Working as a husband wife team in a veterinary clinic?