Tag: Cost Management

Veterinary professionals excel at providing medical care to pets, but understanding and caring about finances is equally important for a successful practice. In our previous blog post, we talked about bookkeeping methods, expressing our appreciation for the accrual system. In this blog, we discuss why and how you should file a cash tax return based on those accrual books and when you should ask for professional help.

Veterinary practice finances are more complex than many practice owners and leaders realize, but they can be tracked in more ways than one. Most practices use cash-based accounting, which is simple and approachable, but may be holding you back. Our team recommends accrual-based accounting, which works well for veterinary practices, but requires specialized knowledge and skill.

Veterinary employees work in a physically and emotionally exhausting environment. As end-of-year and the holidays approach, the chaos often worsens. Most practices host holiday parties and offer team members gifts to combat chronic overwhelm by showing appreciation. Gifts seem like a no-brainer, but how you present them to your employees can profoundly impact your payroll taxes. 

You may feel that 2024 has only just begun, but year-end is sneaking up quickly. Veterinary practices should focus on their financial health not only in December but also throughout the year to facilitate a smooth, painless year-end process. Veterinary bookkeepers can help with financial preparations by staying on top of basic tasks monthly or quarterly to ensure a clean and accurate financial record. 

When was the last time you wrote a paper check? Financial transactions have evolved significantly in the digital age, revealing the weaknesses of check-writing, which is now far less common. With the advent of debit cards and accessible electronic transfers, most people write only a few checks per year. Most participants in an informal LinkedIn poll said they wrote checks only for gifts and odd jobs.

Cash management is critical to running a successful veterinary practice, ensuring financial transparency, and preventing theft or fraud. VetBooks clients receive monthly account reviews from our team to keep their finances on track, but how well you manage your cash and bank accounts between our visits impacts efficiency. Here, we explore simple ways you can implement financial best practices and streamline your bookkeeper’s job.

Open-book management is not a new concept, but one that some leaders may be hesitant to adopt. The idea behind this management style is to share financial information with employees rather than keep them in the dark, which helps them understand the how’s and whys of business operations.

When veterinary practice owners establish their business, they must choose an appropriate business structure. For most privately owned veterinary practices, the designation S corporation (S-Corp) or LLC filing as an S-Corp offers the most flexibility and maximum tax advantages. S-Corps don’t file business taxes, but instead pass on all profits and losses to the business owners (i.e., shareholders) who report them on their income taxes.

S-Corps are popular not only for veterinarians but also for other small, non-publicly-traded companies. The IRS estimates more than 5 million small businesses are classified as S-Corps, compared with fewer than 2 million C-Corps. Around 70% of VetBooks clients file as S-Corps because they’ve recognized the benefits—but many don’t take full advantage of the designation.

Our job at VetBooks is to accurately track your finances, so you and your tax accountant can use that information to plan for tax season. Although we aren’t tax accountants ourselves, we can spot some of the major bookkeeping issues that might become a tax problem. One of those mistakes may be hiding in your payroll deductions—for example, if your practice is an S-Corp and you’re paying for health insurance from your paycheck, you could be missing out on important tax benefits. Here, we explain the benefits of having the S-Corp pay for your health insurance.