When you own a veterinary practice, handling the practice finances may be the most significant and perhaps the most perplexing responsibility. Ensuring that records are up-to-date and preparing and completing required financial forms are essential, but can the practice afford a full-time bookkeeper? VHMA tackled this issue in a recent Insiders’ Insight survey and respondents were asked about who handled the practice’s bookkeeping and accounting. The survey was completed by 404 practice managers.
The bookkeeper is in the house (or not)!
Managers responded to the age-old question: Is the practice’s bookkeeper and “innie” or an “outie.” Overwhelmingly (77%), respondents reported that bookkeeping is handled in-house. However, of those respondents, fewer than half (42%), said the bookkeeper had been formally trained!
Most practices use the services of an accountant to supplement the work of the bookkeeper. The frequency of accountant interactions ranged from “as needed” to weekly. Thirty-three percent reported that the practice uses accounting services monthly. A mere 2% reported that the practice NEVER uses accounting services.
That thing that you do
So, why do practices hire accountants? Sixteen percent said that the accountant is hired to handle taxes only. It is more common for accountants to provide a range of services, the most popular being review, followed by tax preparation, financial consultation and audits.
Respondents were asked to indicate whether the practice use the industry standard Chart of Accounts. Sixty-four percent reported that they do and 23% do not. Of those using the COA, 55% report it is sourced with the AAHA and 12% describe the source as modified AAHA. Other sourcing responses include: my accountant (34%), Quickbooks (16%) and previous owner (3%).
Effectively handling financial aspects of a practice is best left to qualified professionals who operate under a system of checks and balances. Although bookkeepers do not require degrees or licenses, the more training and credentials one has, the better for the practice. A properly trained bookkeeper and a relationship with an accountant will go a long way to enhance a practice’s financial standing.