Practice Finance

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Financing options for your practice purchase or start-up

If you're thinking about transitioning to ownership, you're probably already investigating your loan options. Funding for a practice purchase or start-up in a lease space is called practice financing and can be structured as either a conventional practice loan or a Small Business Administration (SBA) loan. Here are the pros and cons of each.Conventional practice loansA conventional practice loan is typically financed over 5 to 10 years, and can range from variable and fixed-rate loan packages...

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Setting and Agreeing on a Price of an Associate Buy-In

The importance of negotiating a fair price for the practice in a buy-in situation cannot be overstated. If the practice is overpriced, the buyer may not be able to make the payments and may end up feeling victimized by the seller. If the practice is underpriced, the buyer will get a windfall that fails to reward the seller for the efforts and resources that went into making the practice successful. Negotiating a price may be the most critical part of designing and implementing a successful...

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How do I properly set an annual budget?

The following is excerpted  from  101 Veterinary Practice Management Questions Answered, by  Amanda L. Donnelly, DVM, MBA.  More information on this product can be viewed  here.An annual budget needs to include expense categories for all fixed and variable expenses of the practice. Most accounting software will allow you to create an initial budget based on the prior year’s expenses. When developing your budget, you can refer to veterinary publications (see the...

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How can we deter zealous sales reps?

The following is excerpted from  101 Veterinary Inventory Questions Answered, by  James E. Guenther, DVM, MBA, MHA, CVPM.  More information on this product can be viewed  here.It’s tempting to think you can always just say no to zealous sales reps and not meet with them, but that might mean losing out on opportunities to save money on products your practice needs. Instead, consider setting specific days and hours when someone will speak with sales reps. It can...

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Financial Planning Case Studies

By now, you are probably thinking about pretty important issues having to do with your finances. We have discussed basic financial planning concepts that relate to your life in general and as a veterinarian specifically. In this chapter we will move into some case studies so that you can see examples of how these concepts might be put together in a practical way. The veterinarians in these case studies are fictional. But they are based on the situations of some of the many...

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How can we accurately compare prices between vendors?

The following is excerpted from  101 Veterinary Inventory Questions Answered, by  James E. Guenther, DVM, MBA, MHA, CVPM.  More information on this product can be viewed  here.Your job is to shop for vendors that will provide outstanding service and give the practice great value for the price, just as clients do with your practice. Comparing prices on a weekly basis is counterproductive. In most cases, the differences in the total bill for these items will be...

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Selling your practice? Know these accounting terms

The following is excerpted from Selling Your Veterinary Practice, by Lorraine Monheiser List, CPA, CVA and Glenn Hanner, CPA.CITP, CVA, CGMA. More information on this product can be viewed here.Selling your veterinary practice is likely the largest monetary transaction you'll make in your lifetime. It's a complicated and time consuming task. From getting the best valuation of your practice, understanding all the legalities and taxes, to dealing with the emotional aspects of selling and...

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Cash-basis accounting versus accrual-basis accounting for your veterinary practice

The following is excerpted from AAHA Chart of Accounts, Third Edition. More information on this product can be viewed here.There are two methods commonly used for reporting revenues and expenses within a practice. These are cash-basis and accrual-basis accounting (also referred to as cash method and accrual method, respectively). With cash-basis accounting, a practice records revenues when cash is received, regardless of when the service was rendered or the product was sold....

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Develop a 5-year plan in six steps to ensure long-term success

Most veterinarians experience a range of transitions throughout their professional lives--from buying into a practice partnership, to purchasing or starting a new practice, upgrading and expanding an office space, and planning a practice sale. Consequently, a veterinarian's financial support needs will vary during his or her professional lifecycle, depending on the type of transition.For maximum success during these periods of growth and change, veterinarians should create an active...

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Veterinary Group Purchasing Organizations Offer a Wide Variety of Savings and Benefits

Group Purchasing Organizations (GPOs) have been around for more than a century in the human medical realm. But as more corporations dominate the business world, GPOs have expanded into other industries, including veterinary medicine. This article looks at the various GPOs that veterinary practices can join, including AAHA’s own version of the GPO, AAHA Advantage.Download the PDF of   Veterinary Group Purchasing Organizations

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