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  • Writer's pictureDr. Bill Wagner

KPIs 2.0: You didn’t think we’d only teach you three success levers to pull, did you?

[We recently had a blog post which covered three of the most impactful KPIs for veterinary practices: Throughput, wellness compliance, and charge capture. However, these are not the only KPIs worth keeping track of so we’re going to cover a few more. Many of these KPIs reference back to each other, which demonstrates how interconnected every aspect of your business is and how a few strong points or a few weak points in your operations can have a cascading positive or negative impact.

Service:Inventory ratio:

  1. Run longer appointments with more client education: This ties in closely with staff leverage, something we will be covering in more depth shortly. Keeping your veterinarians on a timely appointment schedule shouldn’t mean shortchanging your clients on client education opportunities. Training and empowering your staff to be educators allows your clients to get more face time with your team, particularly on topics of wellness and preventative care. It’s not just enough to give clients the “what” of good preventative care recommendations; compliance skyrockets when you provide the “why”. Spending more time per client explaining the benefits of preventative care services will boost preventative care compliance and drive more service revenue. Importantly, this added time should leverage your support staff rather than slow down your clinicians. Your support staff can be your best, most enthusiastic educators if you give them the tools, the training, and the opportunity!

  2. Get pricing right: A low service:inventory ratio is often driven by unsustainably low pricing on services. Nevertheless, it is important to keep prices reasonable such that they don’t price your core clients out of access to care. Your fee schedule should be tailored to local economic factors and what segment of the market your clinic is targeting (premium “gold standard” care, mid-market care, or low-cost care). However, charging less than the prevailing market value for the services that you’re providing is a recipe for financial hardship for your business. Remember, you can’t be everything to everyone!

  3. Keep charge capture under control: This is a topic so important we spent an entire blog post on it! A charge capture problem will show in many ways on your P&L statement, including in a suppressed service:inventory ratio. Services are more likely to go uncharged than inventory sales, as employees are much more likely to appreciate that giving away free goods is problematic but may not feel the same level of concern about giving away services (even though this is equally damaging to the business).


This is another KPI that is so important that we spent a full blog post talking about it. Importantly, streamlining and tracking inventory and pharmacy processes will help you cut down on wasteful over-ordering. Remember: Not every promotion is a deal! 10% off of a bulk order for an infrequently used product that you lose 25% of to spoilage will turn into a net loss compared to maintaining a leaner inventory. Keep only what you need on hand and leverage a relationship with an online or physical pharmacy to ensure your clients have access to the medications that their pets require without dedicating significant amounts of your resources to stocking a broader offering that is more likely to be lost to spoilage than sold.

Support staff leverage:

As we covered in our article about the importance of veterinary technician leverage there is clear, quantifiable benefit to making sure that your doctors are fully leveraged with technical support staff. However, this is not limited to just veterinary technicians! It is important to track leverage for all appropriate positions to avoid bottlenecks including assistants and client service representative. It’s not just important to have enough people but also to have the right ones. Adding more people without ensuring that they have clear focus area and the training to accomplish their work means adding expense without value.

Avoid excessive “cross training”, a common pitfall in veterinary practices. While it is a tempting goal to have a clinic where “everyone can do everything” since it adds simplicity to staffing and scheduling, having a focused job description creates clear expectations, benchmarks for success, and personal accountability to every aspect of the hospital’s operations and sets everyone up for success. You want your team members to be great at their jobs, and that’s not feasible if you set the scope of their responsibilities impossibly wide. Keep broad expense categories in line relative to revenue:

  1. Fixed expenses: This is an important metric regardless of whether you own your facility or lease, as either way you’re taking money out of your bottom line by insufficiently utilizing your facility. The size and capabilities of your facility should match the needs of the practice while still having opportunity to continue to grow. Too much space leads to excessive fixed expenses, but too little space will interfere with your operations and put an artificial ceiling on your practice’s growth. Every facility and every practice’s needs are different, so there isn’t an effective “one size fits all” operational approach to proper facility utilization. If getting the most out of your space isn’t something you’re comfortable figuring out on your own, having a dedicated business partner like AVP can be beneficial.

  2. Cost of labor: Excessive support staff and associate veterinarian pay outside of industry benchmarks is problematic, but in the current booming veterinary market it is best to approach the issue with a mentality of plenty. Rather than seeing this as an excuse to cut staff or compensation (big mistakes!), instead continue to find good people and pay them well but set them up for success and ensure they’re being well utilized. High support staff compensation relative to revenue can be an issue of “overpaying” but most commonly is not. Instead, it usually reflects an inefficient operational approach. Don’t cheap out on building your team! Watering down gasoline doesn’t make your car travel further, it ruins the engine.

Contract labor: Utilizing relief veterinarians and other contract labor is a good tool to add flexibility to staffing, especially in small practices. Practice owners deserve time off too and having relief vets ensures continuity of care for small practices while the owner is away. Relief vets can also be a tool to get the hospital’s doors open for additional days of the week or hours per day. However, when you lean on it too much it becomes a very expensive crutch that masks a need to hire more help that’s committed to the success of your practice and can work seamlessly as a true member of your team. Too much contract labor can quickly skyrocket your total labor costs outside of prudent benchmarks and eat up your bottom line. In this challenging job market it isn’t easy to find good help, so having a dedicated partner like AVP who can provide direct support in retention and recruiting can ensure that your practice achieves and maintains the level of staffing that it needs in order to be the best possible version of itself.

If you’re interested in finding out more about how any of these concepts could help your veterinary practice perform better, or how AVP might be the right partner to take your practice to the next level, please reach out to me at to learn more.

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