How Revenue Reporting Can Uncover Opportunities at Your Veterinary Hospital
Revenue growth in the veterinary industry through the first quarter of 2022 is beginning to slow down when compared to the amazing growth rates of 2021. In order to stay in tune with your hospital’s revenue sources, it’s important to ensure the profit and loss statement shows revenue by service category. You might think this would be a daunting task, but the daily recording of revenue doesn’t need to change. Instead, a hospital’s practice management system breaks down the revenue earned by the American Animal Hospital Association (AAHA) and Veterinary Management Groups’ (VMG) revenue accounts. You only need to do one monthly journal entry to reclassify revenue in the profit and loss statement.
There are many benefits to having revenue split out by the AAHA/VMG revenue categories on your hospital’s financials. It can help identify trends by comparing revenue from prior periods and can give insight into the following:
- Client reminder deficiencies
- Client compliance with recommendations
- Changes in standards of care (at a high level)
- Identification of price elasticity
- Monthly reconciliation of practice management system revenue to the bank deposits
- Cost-of-goods-sold margins
As inflationary pressure continues, it’s necessary to have a clear picture of revenue to quickly identify areas of opportunity and act on them. If your hospital is not currently set up to use the AAHA/VMG chart of accounts, check out the four-step process to implementation by downloading the Veterinary Guide to Best Practices, Vol. 4.
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