Q4 is the window to tighten up veterinary inventory management and margins before year-end close and January price increases hit. On October 15, VetBooks hosted a free webinar with Inventory Ally co-founders Emmitt Nantz, MBA, and Nicole Clausen, CSSGB, CCFP, on exactly that: three concrete moves independent veterinary practices can make now, rather than pushing them into January.
Watch the webinar recording or read the highlights below.
Get more value from GPOs and vendor promotions
Q4 is prime season for distributor and manufacturer promotions, and it’s worth understanding why those offers show up right now. As Nantz put it, distributors and manufacturers who front-load inventory onto your shelf at year-end are moving their own risk off their books and onto yours. A delayed payment term can look attractive, but it only pays off if you actually sell through the product in that window. Otherwise, the practice ends up carrying both the cost and the risk.
The practical takeaway: before buying ahead to capture a rebate or promo, weigh it against your actual sell-through rate and expiration risk, not just the discount on the invoice. And if a promotion raises your cost on something you already carry, raise the price to match. Nantz was direct on this point: if your cost goes up, your price should go up with it, so your margin percentage holds steady rather than quietly eroding.
Claim any rebates owed before the program year closes, and make sure your team is routing eligible purchases through your GPO rather than defaulting to habit or convenience.
Get your veterinary inventory in order: cycle counts, reorder points, and clean data
Clausen’s core recommendation is cycle counting: rotating small, frequent counts by category instead of one exhausting count at year-end. A simple version might look like counting flea, tick, and heartworm prevention in week one of the month, vaccines and injectables in week two, in-house lab supplies in week three, and so on. High-value, high-use items get counted often. Low-cost items like cotton balls and syringes can go on a four- to twelve-week cycle instead, since they make up roughly half of inventory volume but only 10 to 15 percent of its value.
The payoff compounds. Clausen described her own experience as a new inventory manager at a practice that hadn’t counted in nine years: that first year-end count took three to four weeks. Once cycle counting was in place and the practice management system was clean, the same count took about an hour. Counting regularly also makes it far easier to trace a problem. Catching a shortfall in the month it happens is a quick investigation. Catching it once a year means trying to explain why 84 boxes of heartworm prevention are missing with no trail to follow.
A few specific things to check before the books close:
- Negative on-hand quantities. Usually a sign that product wasn’t received into the practice management system correctly.
- Unit of measure mismatches. A common example is heartworm prevention tracked by the box but sold by the dose, which creates a running math error every time a sale is entered. Clausen’s rule: track in the smallest unit you actually sell (per dose), except for white goods like syringes and needles, which should stay per box since tracking them individually isn’t worth the time.
- Duplicate SKUs. Multiple inventory lines for what’s really one product on the shelf, often from carrying the same drug under several brand and generic names (several carprofen brands, for instance). Clausen recommends tracking by drug name rather than brand unless it’s a specific branded product you carry, so the inventory list stays a clean match for what’s physically on the shelf.
Reset reorder points using this year’s actual usage, not last year’s numbers or a guess. Pull trailing sales or purchase data (Clausen suggests the last quarter or two) and calculate the point at which you’d reorder, rather than relying on staff judgment. Ask five people what “low” means for the same drug and you’ll get five different answers.
One more date-sensitive item for Q4: the DEA biennial controlled substance inventory. It’s a separate requirement from routine logbook reconciliation, needs to be recorded on its own dated and signed form with a witness present, and should note whether it was taken at the open or close of business. Clausen’s practice is to pair it with the year-end count so it never gets missed.
Check veterinary pricing and margin before January increases
A useful starting benchmark from Inventory Ally: multiply your target cost of goods sold (COGS) percentage by your average monthly revenue to estimate the dollar value of inventory you should have on hand. At a 20 percent target and $100,000 in average monthly revenue, that’s roughly $20,000 of inventory on the shelf. Nantz was clear that 20 percent is a reference point, not a universal rule. COGS as a share of revenue runs lower for practices with a larger share of service revenue (dentals, surgery), and higher for mixed and large-animal practices where product sales make up more of the business. The number to watch is whether you’re replenishing what you actually consume, not hitting an arbitrary target that risks under-stocking and patient care.
The most overlooked line item, according to Nantz, is discounts and coupons. Given away informally and rarely tracked, they quietly erode the bottom line. The fix isn’t to stop being generous with clients. Martin Traub-Werner’s advice is to record every discount as its own charge in the practice management system (the AAHA/VMG chart of accounts has a dedicated code for this) so the practice can see exactly how much is being given away and decide whether that matches the plan.
Before January price increases take effect, review the fee schedule against current COGS and AAHA/VMG benchmarks, and revisit pharmacy strategy: which products the practice should stock and recommend directly, and which lower-demand items are better handled through an online pharmacy. As Clausen put it, you don’t need nine kinds of ear cleaner or fourteen joint supplements on the shelf.
One action to take before the books close
Asked for a single action each, the panel kept it simple:
- Clausen: Print the inventory list and highlight the negative numbers, duplicate SKUs, and unit-of-measure mismatches, so the areas needing cleanup are visible before the final count.
- Nantz: Stop managing inventory with retail logic (one in, one out) and start anchoring reorder points and counts to actual consumption, since that’s the basis a service business runs on.
- Martin Traub-Werner (VetBooks): Inventory discipline mirrors financial discipline. Clean, predictable numbers, whether on the shelf or on the books, are what let a practice make confident decisions instead of reactive ones.
The common thread across GPOs, inventory, and pricing is the same: a little structure now, applied before the year closes, buys a practice a cleaner, faster start to 2027.
Want to learn more about Inventory Ally? Visit their website. Have questions about how inventory management ties into your practice’s financials? Contact the VetBooks team and we’ll talk it through. You can also find more on our webinars page.