Bizvet

Resources

Recommended Books
Abbreviations
Glossary
Tools
Proceedings Notes

























Books Dealing with Practice Management


 Ackerman, L: Five-Minute Veterinary Practice Management Consult, Blackwell Publishing, 2006

Ackerman, L: Business Basics for Veterinarians, ASJA Press, New York, 2002

Ackerman, L: Management Basics for Veterinarians. ASJA Press, New York, 2003

Boss, N: Educating your clients from A… to Z. AAHA Press, Lakewood, Colorado, 1999.

Bower, J; Gripper, J; Gripper, P: Gunn, D: Veterinary Practice Management, 3rd Edition, Blackwell Science, London, England, 2001

Catanzaro, TE: Building the Successful Veterinary Practice, Volume 2- Programs & Procedures. Iowa State University press, Ames Iowa, 1998

Catanzaro, TE; Seibert, P: Veterinary Practice Management Secrets. Hanley & Belfus, Inc., Philadelphia, 2000.

Heinke, ML; McCarthy, JB: Practice Made Perfect. AAHA Press, Lakewood Colorado, 2001

Opperman, M: The Art of Veterinary Practice Management. Veterinary Medicine Publishing Group, Lenexa Kansas, 1999

Stowe, JD; Ackerman, LJ: The Effective Veterinary Practice. Lifelearn, Guelph Ontario, 2004

Wilson, JF; Nemoy, JD; Fishman, AJ: Contracts, Benefits, and Practice Management for the Veterinary Profession. Priority Press, Ltd., Yardley Pennsylvania, 2000.

Books Dealing with Business Administration

Beckwith, H: Selling the Invisible: A field guide to modern marketing. Warner Books, New York, NY 1997


Belasco, J; Stayer, RC: Flight of the Buffalo. Warner Books Inc., New York, New York, 1993


Bhide, AV: The Origin and Evolution of New Businesses. Oxford University Press, 2000

Blanchard, K; Johnson, S: The One-Minute Manager. Berkeley Books, New York, NY, 1981


Collins, J: Good to Great. Why some companies make the leap… and others don’t. HarperBusiness 2001


Covey, SR: The 7 Habits of highly effective people. Free Press, 1990


Fulgum, R: All I really needed to know, I learned in Kindergarten. Ivy Books, New York, 1988


Goleman, D: Emotional Intelligence. Bantam Books, New York, 1995


Nalebuff, B; Ayres, I: Why Not? How to use everyday ingenuity to solve problems big and small. Harvard Business School Press, 2003


Zaltman, G: How Customers Think. Harvard Business School Press, 2003
















Abbreviations/Acronyms

The following are some useful acronyms that are used in practice management, with some specific to veterinary medicine


AAHA

American Animal Hospital Association



AARP

American Association of Retired Persons



AAVDM

American Academy of Veterinary Disaster Medicine



AAVSB

American Association of Veterinary State Boards



ABC

Activity-based Costing



ABKA

American Boarding Kennel Association.



ACH

Automated Clearing House



ACT

Average Client Transaction



ATC

Average Transaction Charge



ATF

Average Transaction Fee



ADA

Americans with Disabilities Act



ADDS

Advantages, Disadvantages, Distinction, Story Telling



ADE

Adverse Drug Event



ADEA

Age Discrimination in Employment Act



AGI

Adjusted Gross Income



AIA

American Institute of Architects



AICPA

American Institute of Certified Public Accountants



ALARA

 As Low as Reasonably Achievable



AMDUCA

Animal Medicinal Drug Use Clarification Act



AMT

Alternative Minimum Tax



ANSI

American National Standards Institute.



APC

Average Patient Charge



APHIS

Animal and Plant Health Inspection Service (USDA)



APPMA

American Pet Products Manufacturers Association



APR

Annual Percentage Rate



A/R

Accounts Receivable



ARR

Average Rate of Return



ASTM

American Society for Testing and Materials.



ATM

Automatic Teller Machine



AVMA

American Veterinary Medical Association



AVPMCA

Association of Veterinary Practice Management Consultants and Advisors



BARK

Business Assessment Report Kardsm



BATNA

Best Alternative to a Negotiated Agreement



BCC

Blind Carbon Copy



BNICE

 Biological, nuclear, incendiary, chemical and explosive



BSC

Biological Safety Cabinet.



CA

Chartered Accountant



CAPC

Companion Animal Parasite Council



CART

County Animal Response Team



CBRNE

Chemical, biological, radiological, nuclear and explosive



CD

Chemotherapeutic Drug.



CD

Compact Disk



CDC

Centers for Disease Control



CE

Continuing Education



CERT

Community Emergency Response Team (Citizen Corps)



CFM

Cubic Feet per Minute



CFR

Code of Federal Regulations



  COGS
  Cost of Goods Sold


COOP

Continuity of Operations Planning



COPS

Cost of Professional Services



CP

Cash Payback



CPOE

Computerized Physician Order Entry



CPU

Central Processing Unit.



CSA

Controlled Substances Act



CV

Curriculum vita (e)



CPA

Certified Public Accountant.



CQI

Continuous Quality Improvement



Cc

Carbon Copy



CCOHS

Canadian Centre for Occupational Health and Safety



CD

Contract Documents



CD-RW

Compact Disc Re-Writable.



CEO

Chief Executive Officer



CFM

Cubic Feet per Minute



CPU

Central Processing Unit



CQI

Continuous Quality Improvement



CRM

Client (or Customer) Relationship Management



CT

Computed Tomography



CVT

Certified Veterinary Technician



dB

Decibel



DB

Design-Build



DCAP

Dependent Care Assistance Program



DEA

Drug Enforcement Agency



DHS

Department of Homeland Security



DOL

Department of Labor



DOS

Denial of Service



DSL

Digital Subscriber Line.



DVD

Digital Video Disk.



DVD-RW

Digital Video Disc Re-Writable.



E&O

Errors & Omissions



EAP

Employee Assistance Personnel



EBITDA

Earnings before Interest, Taxes, Depreciation & Amortization



EBM

Evidence-based Medicine



EEO

Equal Employment Opportunity



EEOC

Equal Employment Opportunity Commission



EFT

Electronic Funds Transfer



EHRS

Office of Environmental Health and Radiation Safety.



EI

Emotional Intelligence



EIN

Employer Identification Number



EM

Employee Manual



EMAC

Emergency Management Assistance Compact



EMR

Electronic Medical Record



EMT

Emergency Medical Technician



EOC

Emergency Operations Center



EOQ

Economic Order Quantity



EPA

Environmental Protection Agency



EPLI

Employment Practices Liability Insurance



EQ

Emotional (Intelligence) Quotient



ERISA

Employee Retirement Income Security Act of 1974.



ERV

Energy Recovery Ventilator



EVA

Economic value-added



FAD

Foreign Animal Disease



FAQ

Frequently-asked Questions



FASB

Financial Accounting Standards Board



FDA

Food and Drug Administration



FDA/CVM

Food and Drug Administration Center for Veterinary Medicine



FDC

Food, Drug & Cosmetic Act



FEMA

Federal Emergency Management Agency



FICA

Federal Insurance Contributions Act



FICO

Fair Isaac Credit Organization



FIFRA

Federal Insecticide, Fungicide, and Rodenticide Act



FLP

Family Limited Partnership



FLSA

Fair Labor Standards Act



FMLA

Family and Medical Leave Act



FT

Full time



FTE

Full time equivalent



FLP

Family Limited Partnership



ftp

File Transfer Protocol



FUTA

Federal Unemployment Tax Act



G & A

General and Administrative



GAAP

Generally Accepted Accounting Principles



GB

Gigabyte



GP

General Partnership



HELP

Hold, Encourage, Limits, Praise



HIPAA

Health Insurance Portability and Accountability Act



HMIG

Hazard Materials Identification Guide.



HMO

Health Maintenance Organization



HR

Human Resources



HRIS

Human Resources Information Systems



HRP

Health Reimbursement Plan



HRS

Hazard Ranking System (EPA)



HSA

Health Savings Account



HSM

Hospital Safety Manual.



HVAC

Heating, Ventilation & Air Conditioning



ICANN

Internet Corporation for Assigned Names and Numbers



ICF

Incremental Cash Flow



ICS

Incident Command System



IP

Internet Protocol



IPS

Investment Policy Statement



IRA

Individual Retirement Account



IRC

Internal Revenue Code



IRR

Internal Rate of Return



IRS

Internal Revenue Service



ISP

Internet Service Provider



IT

Information Technology



IVP

Invitation, Validation and Persuasion



KISS

Keep it Simple, Stupid!



KPI

Key Performance Indicators



LLC

Limited Liability Company



LLP

Limited Liability Partnership



LP

Limited Partnership



LTC

Long-term Care



LVT

Licensed Veterinary Technician



MAC

Media Access Control



MACRS

Modified Accelerated Cost Recovery System



MBA

Master of Business Administration



MBTI

Myers-Briggs Type Indicator



MHA

Master of Healthcare Administration



MPA

Master of Public Administration



MRI

Magnetic Resonance Imaging



MRC

Medical Reserve Corps (a Citizen Corps program)



MSDS

Material Safety Data Sheets.



NADA

New Animal Drug Application



NAHERC

National Animal Health Emergency Response Corps (USDA)



NAHEMS

National Animal Health Emergency Management System



NCDA

National Career Development Association



NCF

Net Cash Flow



NCID

Nation Center for Infectious Diseases



NCVEI

National Commission on Veterinary Economic Issues



NDMS

National Disaster Medical System



NEMA

National Emergency Managers Association



NFPA

National Fire Protection Association DHS



NGO

Non-Governmental Organization



NIMS

National Incident Management System



NLRA

National Labor Relations Act



NP

Net Profit



NPV

Net Present Value



NRC

Noise Reduction Coefficient



NRP

 National Response Plan



OC

Opportunity Cost



OD

Organizational Development



ODP

Office of Domestic Preparedness



OSHA

Occupational Safety & Health Administration



OTC

Over the Counter



PA

Performance Appraisal



PACS

Picture Archival & Compression Software



PC

Personal Computer.



PITI

Principal, Interest, Taxes, and Insurance



P&L

Profit & Loss



PACS

Picture Archival & Compression Software



PMS

Practice Management System



POP

Premium-only policy



POS

Point of Sale



PPE

Personal Protective Equipment.



PI

Principal Investigator



PR

Public Relations



PRSA

Public Relations Society of America



PT

Part time



QA

Quality Assurance



QI

Qualified Intermediary



RAM

Random Access Memory



RMW

Regulated Medical Waste.



ROI

Return on Investment



RTU

Roof Top Unit



RVT

Registered Veterinary Technician



SART

State Animal (or Agricultural) Response Team



SBA

Small Business Administration



SEO

Search Engine Optimization



SEP

Simplified Employee Pension



SIMPLE

Savings Incentive Match Plan for Employees



SMART

Specific, Measurable, Attainable, Related to Mission and Time limited



SOAP

Subjective, Objective, Assessment, Plan



SCORE

Service Corps of Retired Executives



SOP

Standards of Performance



SOP

Standard Operating Procedures



SS

Safety Supervisor.



STC

Sound Transmission Coefficient



SWOT

Strengths, Weaknesses, Opportunities, Threats



TA

Trade Area



TIC

Tenant-in-Common



TQM

Total Quality Management



USB

Universal Serial Bus.



USC

United States Code



USDA

United States Department of Agriculture



USP

United States Pharmacopoeia



URL

Uniform Resource Locator



VHMA

Veterinary Hospital Managers Association



VMAT

Veterinary Medical Assistance Teams (FEMA)



VTE

Veterinary Time Equivalents



USDA

United States Department of Agriculture



WAP

Wireless Access Point






The following are some useful terms in the understanding of veterinary practice management. They come from a variety of sources and, where necessary, the meaning has been tweaked to be more specific to the practice of very medicine.

1099-MISC Form

The form a company issues to its independent contractors, citing all money paid to the individual on an un-taxed basis. It is then the responsibility of the independent contractor to file and pay all appropriate Federal, State and local taxes.

   

Acid-Test Ratio

Sum of cash, receivables, and marketable securities divided by current liabilities. The acid test provides a quick measure of the practice’s ability to pay its near-term liabilities out of liquid assets.

   

Accounts Payable

Amounts owed to suppliers that are payable in the future.

   

Accounts Receivable

Money owned to a practice for services rendered or products sold that is not paid at the time of service or when the product is dispensed.

   

Accounts Receivable Turnover

The relationship between sales made through credit and accounts receivable, computed by dividing sales on account by average net accounts receivable. The higher the A/R turnover number, the quicker collections occur (and the higher the probability of successful collection).

   

Adjusted Gross Income (AGI)

The total of an individual's income (wages, salaries, interest, dividends, etc.) on a tax return after all allowable deductions have been subtracted

   

Advertising

Paid communication using various forms of media to influence or persuade an audience

 

 

Amortization

A periodic expense attributed to the decline in usefulness of an intangible asset over its estimated useful life.

   

Annual Percentage Rate (APR)

A percentage calculation that reflects the total cost of a loan (interest plus all fees) on an annual basis.

   

Assets

Things of value on a balance sheet, such as cash, equipment, inventory, buildings, etc.

   

Average Client Transaction (ACT)

Revenue per client visit, calculated by dividing the income by the number of clients or patients seen. Also called per-patient transaction.

   

Average Patient Charge (APC)

This is the total practice revenue divided by the number of patients seen. It is an economic indicator of services provided based on the patients seen rather than the invoices written. 

   

Average Transaction Charge (ATC)

The total revenue for a time period divided by the total number of transactions during that period.

   

Average Transaction Fee (ATF)

This is an economic measure of the average dollar amount of services provided on each invoice in a practice.  It is the total practice revenue divided by the total number of invoices.  

   

Balance Sheet

A financial report detailing a practice’s assets, liabilities, and owner’s equity (Net Assets in a nonprofit) at a specific point in time.

   

Benchmarking

This is a process by which a practice compares itself to others (especially those known for outstanding performance) in an attempt to improve performance.

   

Book Value

The dollar amount at which assets and liabilities are recorded in financial statements.

   

Bottom line

A colloquial term for profits after all expenses and taxes have been considered.

   

Brand

An identifying symbol, words, or mark that distinguishes a product or company from its competitors. The brand value reflects how a product's name, or company name, is perceived by the marketplace.

 

 

Brand Identity

A unique set of associations that the brand strategist aspires to create or maintain

   

Brand Promise

The spoken or unspoken expression of the continuing, important and specific benefits clients connect with a firm, service or product.

   

Breakeven Point

The point at which the initial money spent is recovered through cash inflows. The level of sales that will just cover all costs, both fixed and variable.

   

Budget

An estimate of income and expenses for a specified period.

   

Burnout

Physical or emotional exhaustion, especially as a result of long-term stress or dissipation. An expression used to describe what might be better defined as depression for those who are simply disenchanted with practice or extreme exhaustion for those who have not taken reasonable time off.

   

Business Assessment Report Kard (BARKsm)

A strategic planning process designed to evaluate veterinary practices

   

Business Plan

A written document that details a proposed or existing venture. It seeks to define the objective, vision, current status, expected needs, strategies, defined markets, and projected results of the business.

   

CAN-SPAM Act

The Controlling the Assault of Non-Solicited Pornography and Marketing Act requires unsolicited commercial e-mail messages to be labeled and to include opt-out instructions and the sender's physical address. It prohibits the use of deceptive subject lines and false headers in such messages.  

 

 

Capital

The rights (equity) of the owners in a business enterprise.

   

Capital Asset

An asset that has utility over more than one accounting period, such as a surgical table.

   

Capital Budgeting

This involves the analysis of all the financial plans associated with the acquisition of all capital assets for a business.

   

Capital Gains

The increase in value of a property above investment costs. The difference between an asset's purchase price and selling price, when the selling price is greater

   

Capital Lease

A lease which includes contract provisions that result in treating the leased asset as a purchased asset. It generally covers the economically useful life of the property in question which is typically longer than the period of time an operating lease covers.

   

Capital Reinvestment

The periodic capital outlay required to maintain operations at existing levels; also referred to as sustaining capital reinvestment

   

Capitalization rate

The rate of return needed to attract capital to the practice.  This is essentially the rate of return a buyer would expect for investing in the practice.  The rate is a reflection of the risks associated with the business with emphasis on the practice’s ability to maintain its net income.

   

Cash flow statement

A financial report on the sources of cash (like profit, increased debt, and collections on client accounts) and uses of cash (like reducing debt or buying more drug and supply inventory) during a period of time

   

Cash Payback (CP)

The amount of time necessary between the capital expenditure and the complete recovery in cash (net after expenses) of the amount invested.

   

Cash Payback Period

 The estimated period of time that will elapse between the date of a capital expenditure and the complete recovery of the amount invested.

   

Catchment Area

Also known as Trade Area. The area from which a business draws its clientele.

   

Chart of Accounts

A systematic listing of all account names and numbers used by a company.

   

Charitable Corporation

A corporation that has been organized under state law as a nonprofit corporation and meets the criteria under Internal Revenue Code Section 501(c)(3) to have its income exempted from federal income taxes and its donations tax deductible by the donors.

   

Client

An individual or group who engages in a professional working relationship with a veterinarian or veterinary practice for the delivery of veterinary services

 

 

Client satisfaction

Meeting and/or exceeding client expectations by the customer’s standards or perception.

 

 

Client service

Refers to meeting the needs of individuals with whom the doctor or practice hopes to maintain a long-standing relationship. 

   

Commodity

An item that is considered interchangeable, and whose price is a reflection of supply and demand.

   

Compassion fatigue

A progressive loss of idealism, energy, and purpose experienced by people in the helping professions

 

 

Compensation

All income due to employees for their work during a given period. In addition to wages, salaries, bonuses, and stock options, compensation includes fringe benefits and employers' share of contributions to social insurance programs, such as Social Security.

   

Compensatory Time

 Time off given to an employee to compensate for extra time worked in a single workweek.

 

 

Compliance

The measure of whether pets actually receive the care that has been recommended by their veterinarians.

   

Community Relations

Continuing, planned and active participation with and within a community to maintain and enhance its environment to the benefit of both an organization and the community.

 

 

Conflict Resolution

A process of resolving a dispute or disagreement

 

 

Consumer report

A report of a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living

   

Continuous quality improvement (CQI)

An  ongoing process of seeking small improvements in processes that have an overall effect of improving efficiency and productivity while reducing waste within an organization

   

Cost Driver

A quantifiable measure that is used to assign costs to activities; reflects the consumption of costs by activities, such as labor, supplies, equipment and associated depreciation, etc.

 

 

Cost Object

Any activity for which a separate measurement of costs is desired, such as services, service lines, products, product lines, processes and responsibility centers (surgery, pharmacy, etc.).

   

Cost of Goods Sold (COGS)

The expense incurred to purchase merchandise sold during a period. 

   

Cost of Professional Services (COPS)

The direct costs associated with producing a product or service. It reflects the direct costs of patient care and product retailing, including drug and pharmacy costs, professional and hospital supplies costs, laboratory supplies and reference laboratory fees, radiology and imaging supply costs, surgery and anesthesia supply costs, dietary product costs, mortuary costs, etc.. 

   

Costs, Fixed

Fixed costs are those that do not fluctuate with revenue.  For example, the rent paid to lease the building in which the veterinary practice is located is a fixed cost.  Even if no clients come in the door and no revenue is generated by the practice, the business still has to pay rent.

   

Costs, Semi-variable

Expenses that don’t fluctuate directly with revenue but still don’t stay fixed in the sense that rent does.  They encompass some fixed and some variable expense components. For example, telephone service is typically a semi-variable expense in that there is typically a base cost (fixed expense) and then an additional cost (variable expense) depending on the amount of telephone service features used (e.g., long distance costs).

   

Costs, Variable

Those costs that fluctuate directly with revenue.  For example, variable costs in a veterinary practice would include anesthesia, drugs and supplies.  If no patients are seen, none of these items is used and there is no procedure-associated cost (other than the original cost of the existing supplies). 

   

Credit Policy

Written guidelines to assist in deciding to extend credit to a customer. Formulating a standard credit policy helps to avoid extending credit to pet owners who are unable to pay their accounts. A good credit policy should help retain good relationships, without jeopardizing cash flow.

   

Credit Report

A listing of all the outstanding debt and history of payments on that debt. 

   

Credit Terms

Time limits set for customers' promise to pay for merchandise or services purchased from a practice.

   

Culture

The personality of the practice.  It tells the history and beliefs of the practice and sets the tone for giving the practice a competitive advantage.

   

Current Assets

Cash or another assets that may reasonably be expected to be realized in cash, sold, or consumed, within a year or less, through normal practice operations.

   

Current Liability

Amounts owed to outside parties that are due and must be paid within the next twelve months.

   

Current Ratio

Current assets divided by current liabilities. It indicates how much there is in assets, cash, and items of value, versus how much is owed on those assets.

   

Curriculum vitae

A special type of resume traditionally used within the academic community that includes earned degrees, teaching and research experience, publications, presentations, and related activities.

   

Customer

Someone who pays for goods or services

   

Customer service

 Refers to assistance to individuals who are purchasing a product or service.    

 

 

Demographics

Description of the vital statistics or objective and quantifiable characteristics of an audience or population. A few of the demographic designators include age, marital status, income, family size, occupation, and personal or household characteristics such as age, sex, income, or educational level.

 

 

Depreciation

A systematic allocation of the cost of a tangible asset (i.e. radiographic unit) over time. It is the monetary amount of estimated annual normal wear and tear on property improvements.

   

Direct expense (cost)

An expense (cost) that can be directly traced to a client, to a profit center, or to some specific entity.

 

 

Direct Labor

Direct labor or hard labor includes any actions that directly contribute to the delivery of patient care or customer service

   

Direct labor hours

The costs associated with providing staffing for a service.

   

Discount

A reduction in price for services and/or products.  This can be a partial or total reduction of fees.

   

Discount Plans

This is a service by which pet owners pay a fee to receive discounted services from participating veterinarians. It is not, by definition, insurance.

   

Doctor’s Manual

A Manual that helps ensure that all doctors in a multi-doctor practice are following the same basic protocols so as to avoid client confusion that will undermine client trust in the practice. In addition to outlining such routine protocols as vaccination guidelines, these manuals also include narrative on how to interpret the practice’s fee structure. For example, if a practice offers a Level One, Level Two and Level Three Nursing Care fee, the manual will outline the criteria used to define each level (this type of information may also be included in the Reception Manual)

   

Due Diligence

The process by which persons conduct inquiries for the purposes of timely, sufficient and accurate disclosure of all material statements/information or documents which may influence the outcome of the transaction.

   

Economic Life

The number of years over which cash is expected to be returned from an investment in property.

   

Economic Order Quantity

The most economical quantity of a product to order, factoring in both holding and ordering costs

   

Economic value-added

The monetary value of an entity at the end of a time period minus the monetary value of that same entity at the beginning of that time period. The after-tax earnings minus the opportunity cost of capital.

   

Economy of Scale

The reduction in cost per unit that results when operational efficiencies allow increased production. There is thus savings because as production increases, the cost of producing each additional unit decreases.

   

Economy of Scope

The reduction in costs of operations when a company enters two or more markets where the operations in one market can be used to make operations in another market more efficient.

   

Emotional Intelligence (EQ)

A kind of intelligence or skill that involves the ability to perceive, assess and positively influence one's own and other people's emotions.

 

 

Employee

The common law definition of "employee" is anyone who performs services subject to an employer’s will and control as to what shall be done and how.  Veterinary employees are workers contracted by practice owners to perform specified job tasks during delineated time periods, subject to the authority and control of their employers.

 

 

Employee Manuals

These are manuals explaining the terms and conditions employees must operate under while working for a given business.

 

 

Employer

A person or firm that employs workers and pays wages.

 

 

Endowment

A fund, usually in the form of an income-generating investment, established to provide long-term support for an organization.

   

Equity

The owner(s)’ claim on the practice’s assets (i.e., the portion of the practice’s assets that belongs to the owner, not the creditors).

   

Excess Earnings

The amount of earnings expected over and above the return on tangible assets; includes earnings as a result of intangible assets such as goodwill

   

Expense

A measured outflow of services and/or goods, matched to the revenue generated for that outflow.

   

Expense, Fixed

An expense that stays the same regardless of the amount of work the practice performs, such as rent.

   

Expense, Step

An expense that increases or decreases in distinctive amounts, rather than in a linear fashion. Any staff member with a guaranteed work schedule is a step expense

   

Expense, Variable

An expense that increases as the amount of work the practice performs increases. For example, the busier a practice becomes, the more drugs and supplies it requires

 

 

External marketing

Written or verbal communication that is aimed at attracting new clients.  Examples include exterior appearance of the hospital, yellow page ads, mailings, PR events, speaking engagements, signage, web site, and phone conversations.

 

 

Fair Market Value

The price at which an asset would change hands between a willing buyer and a willing seller, both having the means to complete the transaction and neither acting under duress.

   

FICO Score

A score calculated using a computer model that compares the information in a credit report to what is on the credit report of thousands of other customers.  This assesses a number of factors such as past payment history, amount of outstanding debt, age of the credit, types of credit and changes in amount of outstanding credit.  The higher the credit score, the lower the credit risk.

   

Finance Charges

Money charged for payments that extend beyond an agreed upon time limit.  The amount charged is governed by the usury laws in the State within which you practice.  The amount of finance fee charged must be clearly reflected on the invoices rendered.

   

Frequency

In advertising, the number of times an individual is exposed to an advertisement

   

Full-time Equivalent

A method of comparing practices based on a full-time schedule of 40 hours a week. If a practice has two veterinarians, one working 50 hours a week and one working 20 hours a week, that practice has 1.75 full time equivalent veterinary positions [i.e., (50 + 20)/40]

   

Future Value

The monetary value of some defined investment at some point in the future, given a specified rate of return

   

General and Administrative Expenses

All executive, organizational, and clerical expenses associated with the general management and operation of a practice, rather than with delivery of patient care, ancillary services such as pet boarding and grooming, or product/pharmacy sales.

 

 

General Ledger

The collection of all Asset, Liability, Equity, Revenue, and expense accounts from which the financial statements are derived. 

   

General Liability

 Insurance that protects against accidents and injury that might happen on its premises, as well as exposures related to its products

   

Generally accepted accounting principles (GAAP)

 A philosophy that broadly includes the body of principles that governs the accounting for financial transactions underlying the preparation of a set of financial statements. GAAP are derived from such sources as the Financial Accounting Standards Board (FASB) and the American Institute of Certified Public Accountants (AICPA).

 

 

Going Concern Assumption

The assumption that the business will remain in operation for the foreseeable future (as opposed to a liquidation assumption)

   

Goodwill

An intangible asset resulting from a business’s reputation, name, location, products, services, customer base, etc.

   

Gross Income

Income resulting from all veterinary operations before any cost/expense deductions and excluding interest income, service charge income, rebates, sales tax collected, or any other income resulting from other than veterinary professional services and pharmacy/product retail income.

   

Gross Profit

A monetary amount, computed by subtracting total Cost of Professional Services from Gross Income.

   

Gross Profit Percentage

The ratio percentage resulting from Gross Profit divided by Gross Income.

   

Hazardous Waste

 Byproducts of society that can pose a substantial or potential hazard to human health or the environment when improperly managed. Possesses at lease one of four characteristics (ignitability, corrosivity, reactivity, or toxicity) or appears on EPA lists. It requires special handling for detoxification or safe disposal.

 

 

Health Insurance Portability and Accountability Act  (HIPAA)

The federal privacy standards that protect patients’ medical records and other health information provided to health plans, doctors, hospitals and other health care providers.

   

Holding costs

All of the costs associated with maintaining inventory on the premises.

   

Hospital Safety Manual (HSM)

A collection of all the safety rules, regulations, and policies of the facility. It should have the set training schedule for the staff, a written safety plan, Material Safety Data Sheets (MSDS), and evacuation plans for emergencies. It must be stored in an easily accessible location.

   

Human Resources

Also known as human capital, the skills that people can use to produce goods and services. The four main areas of human resources as a discipline include: Employment Practices; Organizational Development; Compensation and Benefits, and; Employee Relations.

   

I-9

Immigration Naturalization form to confirm employment eligibility in the United States.

   

Income Statement

Also known as a profit and loss statement, a report on financial performance that covers a period of time and reports income and expenses during that period.

   

Indemnity Insurance

A system of health insurance in which the insurance carrier reimburses the insured indiviudal for medical expenses after care has been provided.

   

Independent Contractor

An individual hired to do a specific job and paid a fee or a lump sum at its conclusion. Workers who are contracted by veterinary practice owners (called clients) to perform certain jobs independent of control by their clients.

 

 

Indirect Labor

Indirect labor or soft labor includes all work-related actions that do not directly result in patient care or customer service. This includes attending staff meetings, participating in continuing education, training new staff members, bookkeeping, inventory management, creating client education or marketing materials, computer maintenance, etc.

   

Industry Norms

Values derived from the analysis of a large number of practices. Most of the national groups that represent organized veterinary medicine publish some variety of industry norms.

   

Incremental Cash Flow (ICF)

The change in the practice’s net cash flow attributable to capital investment.

   

Informed Consent

Person's agreement to allow something to happen, such as a medical procedure that is based on full disclosure of the facts necessary to make an intelligent decision

   

Interest

The cost of borrowing money, assessed by the lender over time, usually expressed as a percentage of the principal amount of borrowing. The percentage is expressed as a rate over a time period, and can change (variable rate) or stay the same over the term of the loan (fixed rate).

   

Intellectual Capital

Value of know-how accumulated within the organization. 

   

Internal Accounting Controls

Processes in place to provide management reasonable assurance that no practice resources are being lost, that financial reporting is reasonably accurate and that profitability targets are achieved.

   

Internal marketing

In veterinary medicine, this usually refers to efforts to increase utilization of services by existing clients.  Internal marketing also refers to efforts by the practice to train and motivate staff to work together as a team to better meet client needs

   

Internal Rate of Return (IRR)

The calculated rate of return, given the cost and future value of an investment

   

Inurement

Inappropriate benefit of a private person or company from a charitable corporation.

   

Inventory

Extra merchandise or supplies the practice keeps on hand to meet the demands of customers. Goods ready to be sold.

 

 

Inventory Turnover

The relationship between expense of total items sold and inventory value, computed by dividing the cost of drugs and dispensed items by the average inventory value. The higher the number, the more often inventory turns over, resulting in less outdating, less damage, and less inventory on hand at any one time. 

   

Job Enlargement

The assignment of additional similar tasks that the employee is already trained to accomplish. For example, asking an employee who is trained to do call backs for one doctor to begin doing call backs for all of the doctors

   

Job Enrichment

Training an employee to be able to complete new tasks in addition to his/her regular responsibilities. Cross training technicians and receptionists so they are able to cover for each other is an example of job enrichment It is a method of making work more satisfying by expanding the tasks to increase not only their variety but also the employee’s responsibility and accountability.

   

Just-in-Time Inventory

Receiving product as it is needed, rather than storing product as inventory.

   

Key Performance Indicators

Statistics that can be generated from client transaction data that have predictive value for success, from a practice management standpoint

   

Labor Ratio

The ratio that defines the relationship between direct labor and indirect labor in the workplace. In veterinary medicine, the rule of thumb is a one-to-one (1: 1) ratio.  One hour of direct labor is expended, for each hour of indirect labor

   

Leadership

The art of guiding people in a manner that commands their respect, confidence and wholehearted cooperation.

   

Leasing

A contractual agreement granting the use of some capital asset for a specified time in exchange for an agreed upon payment amount.

   

Lessee

The party to a lease agreement who is obligated to pay the rentals to the lessor and is entitled to use and possess the leased equipment during the lease term.

   

Lessor

The person or company who owns the property that is the subject of the lease or rental agreement.

   

Leveraging

Using creditor funds to purchase assets, based on the prediction that the rates of return on purchased assets will exceed the costs of borrowing.

   

Liabilities

The practice’s debts, (i.e., money owed to creditors)

   

Liquidation Value

The value of individual business assets if they were to be sold.

   

Loan

A sum of borrowed money (principal) that is generally repaid with interest.

   

Loan Terms

Exact requirements of how a loan will be made to and repaid by the borrower.

   

Logo

A unique symbol or design that represents a company.

 

 

Long Term Portion of Loan

The principal portion of a loan that is due to be repaid in greater than twelve months.

   

Managed Care

A health care system under which health care professionals are organized into a group or “network” in order to manage the cost, quality and access to health care.

   

Market

The potential customers for a particular product or service

   

Marketing

A business discipline that studies the demographics and psychographics of target consumers, as well as the development of positioning strategy and messages. Marketing strategy affects everything that touches customers, prospects, employees, investors, vendors, and essential business processes.

 

 

Market Development

Promoting existing products to new markets

   

Market Penetration

The extent of sales of existing products and services to existing clients

   

Market Plan

The course of action that creates a decision plan as to how a business is to proceed to best compete in the market it elects to serve.

   

Market Research

Determining attitudes and behaviors of publics and their causes in order to plan, implement and measure activities to influence or change the attitudes and behavior.

 

 

Marketing Communications

Combination of activities designed to sell a product, service or idea, including advertising, collateral (printed) materials, publicity, promotion, packaging, point-of-sale display, trade shows and special events.

 

 

Marketing Mix

The unique blend of product, pricing, promotion, and place (distribution channel) designed to reach a specific group of consumers

   

Marketing planning

Establishing marketing objectives, defining target markets and deciding on the marketing mix.

   

Market Segment

A group of consumers who respond in a similar way to a given set of marketing efforts.

 

 

Market Segmentation

The process of dividing the total market for a product or service into smaller, more manageable subsets or groups of customers. Market segmentation.  Dividing markets into specific groups based on specific criteria.

   

Market value

The highest price that a buyer would pay and the lowest price the seller would accept on a property. 

   

Market Viability

Determination of the probable success of a business venture based on an evaluation of demand, price, and quality of goods or services.

 

 

Material Safety Data Sheets (MSDS)

Detailed explanations about each drug or chemical providing all important information regarding use of the substance. It is the facility’s responsibility to maintain a current MSDS for each chemical.

 

 

Materials

The costs associated with providing products used for a service, including both direct and indirect costs.

   

Media Relations

Relating with news media in seeking publicity or responding to their interest in an organization.

 

 

Mentoring

An informal relationship where, on an ongoing basis, a more experienced individual offers guidance and/or career advice to a less experienced colleague

 

 

Merger

The act of several practices combining operations to create an economy of scale (reducing expenses) and improving the growth potential of the new entity.

   

Meta-Tag

Pieces of HTML code that are imbedded in a web site, but not visible with web browsers. The Meta-Tags contain information about the site, its description, keywords, and creator, and are used by search engines and directories.

   

Mindshare

The presence a product or service occupies in the mind of a client or potential client

   

Minimum Order Point

The level below which stock should be re-ordered. 

   

Mission Statement

A statement of the role, or purpose, by which a practice intends to serve its stakeholders. It clarifies the way the organization plans on achieving its goals.

   

Money Factor

A term used in leasing that is similar to but not the same as interest on a loan.  It determines how much is paid in finance charges over the life of the lease. To convert the money factor amount into an equivalent interest rate, simply multiply the Money Factor number by 2400.

   

Mortgage

Debt associated with the purchase of real property. A type of loan made on real property (real estate) in which the collateral for the loan is the real property.

   

Myers-Briggs Type Indicator (MBTI)

An assessment tool to help understand behavior preferences. The MBTI enjoys widespread use in business as a screening tool for potential employees. 

 

 

Mystery shoppers

Individuals unknown to the staff who call or visit the practice and report back about their experience.

 

 

National Fire Protection Association (NFPA)

Their guide uses colored diamonds to identify the nature of possible hazards.

 

 

Negotiation

The act of discussing an issue between two or more parties with competing interests with an aim of coming to an agreement

   

Net book value

The historical asset cost less accumulated depreciation since the purchase date

 

 

Net Cash Flow (NCF)

Revenues less expenses plus non-cash expenditures (i.e. depreciation and amortization expenses).

   

Net Present Value

The net return on a project, given all costs and revenues, in terms of current monetary value

   

Net Profit

 The funds available to an owner after all expense obligations are met.

   

Niche market

 A narrowly defined group within your market.

 

 

Non-Operating Assets

Assets not necessary to ongoing operations of the business enterprise; if the assets were eliminated from the business, the resulting earnings would be unchanged. Also referred to as redundant assets

   

Nonprofit

An entity that is not conceived for the purposes of earning a profit, but rather to serve a public good.

   

Not-for-Profit

Any activity that is conducted without purposes of earning a profit. Often used interchangeably with nonprofit.

   

Note/loan

A promise to pay a debt.  The debt can be secured, which means there is property used as collateral against which a lien has been filed. If there is no collateral, the note/loan is unsecured and is the equivalent of a “handshake” loan.

 

 

Operating Budget

An operating budget typically includes those operating items found on a profit and loss statement. It does not usually include items found on a balance sheet or cash-flow statement. The most common budget format encompasses a 12-month period of operations.

   

Operating lease

A true lease.  Generally for a short term and ownership of the asset (the object being leased) remains with the lessor at the end of the lease.

   

Operating expenses

The expenses of a business not directly associated with the making of a product or providing of a service, such as administrative, technical or selling expenses.  

   

Operational revenues

Revenue realized from the day-to-day operations of the entity, such as veterinary professional activities and sales.

   

Opportunity Cost (OC)

The amount of income forgone from a next-best alternative project in favor of the currently proposed use of cash or its equivalent.

   

Ordering costs

The costs associated with employee time shopping for, ordering, receiving and documenting purchased products.

   

Organizational Chart

An overview of who reports to whom within an organization

   

Outsourcing

Work that can be done more effectively by individuals or services outside the organization

 

 

Overcapacity

The situation in which there is capacity available to perform services, but inadequate demand to perform those services at capacity.

   

Overhead

The costs of operating a business, even if no clients avail themselves of any service.

   

Partnership

An association of two or more persons to carry on as co-owners of a business for profit.

   

Pay Period

The length of time covered by each payroll session.

   

Payroll

The financial record of employees' salaries, wages, bonuses, net pay, and deductions

   

Performance Appraisal

A system of determining how well an individual employee has performed during a period of time.

   

Perquisite (Perk)

An incidental or “fringe” benefit

   

Personal Protective Equipment (PPE)

Item(s) that can and must be worn to protect the individual from direct or indirect contact with hazardous substances. Examples include eyewash stations, safety goggles, and lead aprons for radiology.

 

 

Phishing

Scams involving posing as legitimate businesses to acquire sensitive client information

   

Picture Archiving and Communication System (PACS)

A system that allows operators to store radiology, ultrasonic and CT images in the central data system and enables authorized members to retrieve the images at different locations simultaneously.

   

Present Value

The current monetary value of some defined investment return, given a specified rate of return.

   

Presenteeism

A term that refers to those employees that wish to work a large number of hours each workweek, or those employees that refuse to take sick or personal time when they are ill.

   

Principal

Borrowed amount of money, excluding any interest on the outstanding amount.

   

Private Foundation

All Charitable Corporations are deemed to be Private Foundations unless they meet the requirements of one of the statutory exceptions.

   

Pro Forma

A projection or estimate of what may result in the future, given current assumptions and predictions. This is the financial estimate of how the business will do if certain assumptions are achieved.

   

Pro-Forma Budget

This budget charts a course of future action for the practice by outlining and defining the plans of the practice in financial terms.

   

Product Development

The process of creating new products or services for sale to existing clients

   

Professional Liability

Insurance that protects against claims arising from acts, errors or omissions in rendering services of a professional nature

   

Profit and Loss Statement

Summary of practice income, expenses, and resulting profit or loss for a specified period. Also known as the income statement.

   

Profit center

A section of a practice that can be assessed in terms of its revenues and expenses (e.g., surgery, imaging, laboratory).

   

Profit Margin

In cost-plus pricing, the profit margin is the difference between the total costs to the practice of delivering a product or service, and the final cost to the client.

   

Projected Value

An estimate of anticipated future performance.

   

Public Relations

The art of developing reciprocal understanding and good will between a business and the public.

 

 

Publicity

The act of delivering information of news value as a means of gaining public attention or support.

 

 

Rate of Return

Often expressed as a decimal (e.g., 0.06) or a percentage (6%), the amount an investment appreciates or depreciates over time.

   

Reach

The size of an audience that will be exposed to the advertisement

 

 

Remuneration

All monies received for time worked in a pay period, whether deemed wages, commissions, non-discretionary bonuses, tips or any other form of compensation for services rendered.

   

Reorder point

The inventory level at which additional product is ordered

 

 

Residual value (salvage)

The estimated value of an asset at the end of its useful (fully depreciated) life.

   

Return on Equity (ROE)

Net income after all expenses and taxes divided by stockholders' equity (book value). This is an indication of how well the firm used reinvested earnings to generate additional earnings.

   

Return on Investment (ROI)

The income that an investment generates, return on investment is a measure of how effectively a firm uses its capital to generate profit. It is the annual financial benefit of an investment minus the cost of the investment.

   

Revenues

All sales of the practice for goods and services.

   

Safety Manual

This manual is required by OSHA for virtually all veterinary practices. It identifies hazards within the practice and delineates procedures for dealing with them.

   

Safety stock

The inventory remaining past the reorder point

   

Safety Supervisor (SS)

Individual entrusted with overseeing the safety plan for the entire facility. The person who is in charge of defining and implementing the safety plan.

 

 

Search Engine Optimization

Manipulation of web site content and meta-tags to make the site more likely to be preferentially indexed on search engines.

 

 

Section 125

Often referred to as a "Flexible Spending Account", a Section 125 (Cafeteria) Plan, this allows employees to pay certain expenses before taxes are deducted from their paychecks, thus saving on federal and state taxes. These expenses include daycare, insurance premiums and most out-of-pocket medical costs.

   

Section 179

A part of the tax code that allows immediate expensing of equipment and certain other fixtures (up to a certain limit) rather than depreciating the item over the life of the asset.

   

Shortage costs

The costs of not maintaining sufficient inventory so that the sale is lost when consumers go elsewhere.

   

Shrinkage

The loss of product from inventory not resulting from sale, including product lost to employee theft, shoplifting, administrative and paperwork errors, and vendor errors/issues.

 

 

Short-Term (or Current) Portion of Loan

The amount of a loan’s principal balance that is due within the next 12 months.

   

Skills-Based Compensation

A system of wages and raises based on achievement in different skill blocks as determined by the individual practice’s needs.

   

SOAP

An acronym (Subjective, Objective, Assessment, Plan) that identifies the most common data entry format used by veterinary practices. This data is generally located in the progress notes portion of a problem-oriented medical record.

   

SPAM

Also known as junk e-mail SPAM is e-mail that is not considered useful, and may be irritating, inconvenient, worthless, or damaging for the user.

 

 

SPIM

Junk internet messaging

   

Stakeholder

An individual or a group with an interest in a particular business; the individual or group has something at risk (at stake).

   

Standard Operating Procedures (SOP)

The preferred methods of doing a procedure or protocol in the practice.

   

Standards of Care

Statements of what a practice believes in and recommends for its patients for wellness testing, pain management, nutrition, senior pet care and other aspects of patient care. In law, the duty to exercise the care and diligence that is ordinarily exercised by a reasonably competent veterinarian under similar circumstances.

   

Standards of Performance

Written protocols regarding patient care, customer service, and team professionalism.

   

Statement of Cash Flows

A financial report on the sources of cash (profit, increased debt, and collections on client accounts, etc.) and uses of cash (like reducing debt or buying more drug and supply inventory) during a period of time.

   

Strategic Planning

Long-range planning that includes setting goals, strategies, and objectives.

   

Succession

The legal transfer of real estate and/or business entities

           

 

SWOT Analysis

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. For any plan being considered, a SWOT analysis is a basic tool of marketing.

 

 

Tactical Planning

A review of opportunities and proposed strategies, typically for a one- to four-year period.

   

Tangible Assets

Physical assets such as cash, accounts receivable, inventory, property, plant and equipment, etc.

   

Target Audience

The people most likely to buy a product or service, or most interested in the information provided about it. 

 

 

Target Market

A specific group of customers to which a business wishes to sell their products or services. The segment of potential buyers available to an enterprise that is the focus of a defined market plan.

 

 

Target Marketing

Selecting and developing offerings to meet the needs of a specific market segment The process of pursuing a particular segment of a given market.

 

 

Tax bracket

The marginal federal tax rate assessed on taxable income. It is the tax rate applied to each additional dollar of income.

 

 

Taxes

All involuntary fees paid to federal, state and local governments on the profits of the practice.

   

Third-party Payment

The monetary reimbursement for medical services from someone other than the client/patient.

   

Title VII of the 1964 Civil Rights Act

Federal law that prohibits discrimination in the work place based on an employee’s sex, race, religion, color or national origin.

   

Top Line

Total revenues, literally found at the top of the income statement.

   

Traditional Lender

Banks, brokerage houses or other sources that lend money.  Collateral for the loan, down payment, and ability to service the debt from cash flow are deciding factors in willingness to loan money for a purchase.

   

Valuation Approach

An overall theoretical way of approaching the valuation of a business— the three general ways used to determine value for a going concern are the Asset-based, Earnings based and Market based approaches

   

Value

A quality that is determined by what is important, desirable and useful to clients

   

Value-added

The increase in real or perceived value of a product or service is the value to the client after intervention less the value before the intervention.

 

 

Value Chain

Work process to enhance the value of the raw material either tangibly or intangibly. The end result is increased value due to the efforts of the staff

   

Value Disciplines

Three ways businesses deliver superior value to their customers - operational excellence, customer intimacy and product leadership. 

   

Value Proposition

A description of the value that a product, service or process will provide to the pet owner, hospital and staff

   

Veterinary Time Equivalent

A method of assigning labor expenses on the basis of veterinary staffing expense. This allows a practice to calculate labor expenses for procedures using veterinary expense as a standard.

   

Vision Statement

A statement that defines and clarifies the direction in which an organization needs to move.

   

W-2

IRS form that reports income paid and taxes withheld by an employer for a particular employee during a calendar year.

 

 

W-3

IRS form for Transmittal of Wage and Tax Statements

 

 

W-4

IRS form which determines the amount of Federal taxes the employer will withhold from a person's paycheck each pay period.

   

Waiver

A client may sign a form explaining that they have declined to accept (or waived) the doctor’s recommendations or advice.

   

Working Capital

Current assets minus current liabilities

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