When Your CPA is Your Veterinary Practice’s Bookkeeper (and Your Practice Manager Can Get Back To Managing Your Practice)
It is not uncommon to think a CPA is only necessary when doing taxes. But a partner CPA can do so much more! For starters:
- General bookkeeping
- Monthly and quarterly financial statements
- Advise on maximizing profitability
By taking advantage of these services and more, you will ensure that financial analysis is occurring in compliance with the AAHA/VMG Standard Chart of Accounts, with the added bonus of boosting your bottom line. Cammi Bailey, Veterinary Practice Finance Specialist and CPA, is an Ask Jan Expert who has been exclusively serving the Animal Health industry since 2008. We asked for her take on how using a CPA for your bookkeeping can improve the financial stability of your practice.
The Practice Manager Problem
It’s easy to think that your Practice Manager can perform the above functions, but often, the qualifications to be an excellent Practice Manager are not the same as one best suited to accounting. There are a variety of intricacies common to all veterinary practices that Practice Managers often do not have. These include:
- Recording depreciation
- Balancing the loans
- Adjusting Inventory
- Accruing the Payables
It is not uncommon for a practice whose Practice Manager, serving as bookkeeper, is a great technician, but lacks an understanding of the financial intricacies of accounting.
Standard Chart of Accounts
In 2017, the entire veterinary profession moved to a standard chart of accounts endorsed by the American Veterinary Medical Association (AVMA), VetPartners and the Veterinary Hospital Managers Association (VHMA). This standardization of accounting practices used data to better the profession as a whole and is often outside the Practice Manager’s experience. Having a bookkeeper who is experienced with the standard Chart of Accounts. Cammi Bailey and her team are at the forefront of this standardization.
“Two years ago”, says Bailey “I worked with a client who was paying sales tax twice on items that their practice was reselling; once to the distributor, then again to the state when they sold them. After amending their tax returns and working with the distributor, my client received $12,000 back in overpaid sales tax.” Working out the details of when and how to collect sales tax is a common first step for Bailey and her team when they begin working with a new client. Cammi also pays close attention to the financial details of production as well as cost of sales and other expenses to determine and maximize profitability.
New Practice Owners
Cammi Bailey also finds herself working quite regularly with veterinarians who are becoming new practice owners, either purchasing equity from an existing partner or establishing themselves as an entirely new practice. The most common tasks Cammi completes for this group are:
- selecting the best suited business entity
- establishing the correct salary for themselves
Cammi also performs due diligence work for buyers in reviewing a possible purchase of a practice to determine its viability and potential. Though Cammi frequently ends up serving as a bookkeeper for those veterinarians she assists in identifying the right practice for purchase, she always enjoys seeing new practices take off and grow. In a space of increasing corporate ownership, an independent practice purchase is more challenging than ever.
A CPA also helps their clients navigate decisions about depreciations. Often when capital equipment purchases are made, there are decisions to be made regarding when to deduct depreciations – either entirely at the time of purchase or over the course of several years. By proactively choosing the approach that will be most financially beneficial to the practice, a CPA ensures that ROI is a primary focus in capital purchase decision making.
Cammi Bailey, CPA
Cammi and her team know the intricacies of being a veterinary entrepreneur, they have worked with veterinarians for over 20 years, attend veterinary conferences, read veterinary journals, and understand the unique issues that their clients face, like the many aspects of a practice, for example, the challenges of COVID and curbside checks instead of seeing patients in the office.
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