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Open Books or Tailored Glimpses: Sharing the Right Information with Staff

By VHMA Admin posted 07-03-2022 12:03

  
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Money parades right into the front door of veterinary practices, but it tends to make an invisible exit. When it comes to your clinic’s finances, what your staff can’t see can hurt them and ultimately the business.

“Everyone can see the money flowing in, but if you don’t tell them where the money goes and show how much is needed just to keep the practice going, they will make presumptions,” said Debbie Hill, CVPM, SPHR, SHRM-SCP, CCFP, the administrator of four Florida animal hospitals. “Heaven help you if the owner gets a new truck – people will assume that’s where all of last week’s money went!”

That’s where the open books concept fits in. If everyone knows what percentage of last week’s revenue went to salaries and benefits, utility bills, software, and other fixed costs, they no longer suspect the owner walked into the local car dealership with a duffle bag of cash instead of, say, giving them a bigger raise.

In fact, sharing revenues and expenses with staff can not only help explain the size of their raises, but illustrate what cash flow goals must be achieved in order to make them happen at all, Hill said. This can be a powerful motivator for staff members to do their part in practice revenue. Many staff members feel very invested in their practice’s success and would gladly take steps to support its growth, if only they knew what steps they could take! This is also where open books fit in.

Sharing brings caring, but how much is too much?

Managers could print a giant report with every client’s payment and every bill the practice paid and place it prominently in the break room. But should they? Sharing too much can lead to communicating very little, Hill said. “Years back, before I knew better, I printed out the checkbook, marked out names that showed specific wages and posted it by the coffeemaker. There was only one person out of the 40 people I worked with at the time who ever read those – only one person cared or thought it mattered to them.”

Debbie has since devised a more targeted system of sharing, where no one gets an overwhelming amount of information, and everyone has access to information that is directly relevant to them. And she tries not to share data without putting it in context.

“People care when they see how they can make a difference within their roles,” Hill said. “I can show the receptionists that we need to see an 80 percent appointment fill rate, which allows them to use that information to tell a client seeking an appointment that we can work them in. I can show veterinary assistants the difference in both animal health and revenue that blood work makes, and their role in reinforcing that recommendation once the veterinarian leaves the room. The client will want reassurance that the veterinarian’s recommendation is the best option to help keep their pet healthy. I can talk to kennel staff about the very powerful role they have to create happy clients: Making sure that dogs going home are clean, dry, well-brushed, and smell wonderful. Because that impression will determine the client’s perception of the quality of our medical care. No role is unimportant.”

Justifying the Ask

Many staff initiatives on the revenue side involve educating clients about services and the importance of offering them. Because services have a price tag, that conversation can feel uncomfortable, Hill said. This is often the source of many staff questions. Here again, open books help to provide the answers as to why we need to charge and collect from clients.

“If you look at your books and determine what it costs to run your practice for 15 minutes, that’s a real revelation,” Hill said. “You can show how much revenue you need to generate in 15 minutes to keep the clinic or hospital open – which is what provides health care for pets and pays everyone’s salaries. You can show that the prices for services are based on that real data.”

Hill still shares salary percentage with her managers. “It always surprises people how much the doctors make, which is rarely as much as everyone thinks they do,” she said.

Those veterinarians are not exempt from the money talks, said Hill. Sometimes, she must remind them that not charging for some services may feel like a kindness, but it’s really not kind to the people who work there or to pets. “I must let them know it’s fine if they aren’t willing to make any money, but they are giving away their staff’s money, too. And the practice needs money to provide training, health insurance, and keep staff that help them keep animals healthy.

More about this topic is covered in the recorded webinar, Books Smarts: Which Team Members Should See Your Financials, Why and When derived from the VHMA/PVU Management Essentials – Finance Program found on the VHMA website.

 

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