Gaining Confidence When Managing Practice Finances

By VHMA Admin posted 24 days ago

  
VHMA/PVU Management Essentials
Managers play a crucial role in achieving desirable financial results for their practices. Training, experience, and continuing education can be bolstered when handling practice finances. However, many managers may continue to be apprehensive, even fearful, about administering fiscal affairs because the viability of the business is at stake. But fear does not have to be the antipode to progress; it can be the impetus for action. According to Sandy Walsh, RVT, CVPM, when managers take charge and are proactive about building a solid foundation to ensure fiscal responsibility among staff, it can create confidence knowing that the team is playing a role in a practice's financial health.

Walsh maintains that if the team has a clear understanding of each member's contribution to financial health, the foundation will be strong. That's right… it's a team effort! Managers cannot effectively carry out these responsibilities without buy-in from the staff. Members of an effective team know how their actions can help to achieve financial success. 

Preparing the team

First and foremost, says Walsh, all members of the team must understand that veterinary medicine is a business and, even though not every employee may hold a position that is directly related to finances, individual behaviors can affect client decisions that ultimately impact the bottom line.

For example, a receptionist who is having a bad day and is surly with clients may be doing more damage than managers realize. Yes, everyone is entitled to an off day occasionally, but if the behavior alienates clients and prompts clients to end their relationship with the practice, then the behavior has a financial impact. Is this what the receptionist intended by failing to control negativity? Probably not, but by failing to see the connection between client service and continued business, the receptionist is not grasping the full impact of how the position can ultimately affect the business's balance sheet.

Walsh cites the example of a pet attendant who, when reviewing a chart, discovers that a pet is overdue for a vaccine and neglects to notify a supervisor. This is a lost opportunity to make a good business move for the practice. No special skills are needed, just an awareness of the importance of seeing the big picture and finding business opportunities in patient/client transactions.

According to Walsh, training provides employees with the tools and insights to play a role in ensuring the practice thrives. Managers who have the luxury of forming their own teams should ask key questions when hiring. Avoid asking questions that focus on what an applicant can do; instead, ask them what they would do. The responses will provide rich insights into the candidates and gauge their ability to look beyond specific job tasks and view their role in contributing to the organization.

Most managers inherit their staff; therefore, good training---or retraining---is essential. Be sure to underscore the role each staff member can play in contributing to the practice's bottom line. Do not, however, make it explicitly about money, said Walsh. "Putting too much emphasis on money can backfire." She illustrated this with an example of a practice that berated staff because the business was floundering, and the staff was threatened with a pay cut. The message and delivery did not motivate the staff. Walsh worked with administrators to change the message. The revised approach---which highlighted the issues in the practice and outlined what staff could do to help---generated a better response from staff.

Walsh also suggests that once the team is on board and understands their role, they can play in ensuring financial viability, consider providing incentives or rewards. Begin by paying a fair salary, providing the best benefits you can, and reward as appropriate. When staff is in this with you, they play a role in your success and the practice's success.

Use the tools!

Walsh suggests that managers interested in boosting their confidence and achieving success when in the realm of financial management select from the many financial tools that are available and choose ones with which they are comfortable. Personally, Walsh prefers spreadsheets. Reports are essential. When tracking information, take the process down to manageable steps and focus on the quality of the information, not necessarily the quantity. Utilizing practice management solutions like those offered by VetSuccess can help to extract data, make sense of it, and provide key practice metrics to make more effective decisions.

Walsh is also an advocate of benchmarking but cautions that when a practice begins benchmarking, it should do it against itself until trends are evident. After this information is available, benchmarking should be conducted against similar practices.

Beyond the tools

Even with the proper tools and resources to facilitate good financial management, managers may, at times, be riddled with angst and frustration if the process is not yielding the anticipated outcomes or if staff has been slow to assume a more bottom line-directed role. Walsh believes that among managers, these emotions are not unique. She strongly encourages managers to take advantage of veterinary networking groups that allow professionals to share their concerns and receive advice and feedback from other managers.

She also stresses that managers should not be afraid to ask for help. Admitting gaps in knowledge or understanding is not a sign of incompetence. Financial management of a practice can be stressful, and at times overwhelming. Connecting with those who have been there and done that is reassuring, informative, and essential to moving forward.

To learn more about how managers who have responsibility for activities that impact financial results and to minimize the fear and consternation that may surface, VHMA/PVU Management Essentials offers a course that identifies tools and resources to enhance financial activities and maximize revenues. The program also covers the interpretation of financial results through benchmarking, KPIs, and P & L statements. For more information and to enroll in the course, go to https://www.vhma.org/education/management-essentials.


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