Act Now to Protect Your Estate from Tax Changes

Act Now to Protect Your Estate from Tax Changes

There are some big changes coming to gift and estate tax laws that can significantly increase estate taxes and decrease your financial legacy. As you work so hard to take care of animals, their owners, and your employees, make sure you’re also taking steps to protect the wealth you’ve built by making gift and estate tax planning a priority this year.

Without legislative action, the valuable Tax Cuts and Jobs Act’s (TCJA’s) gift and estate tax exemption is set to revert to pre-2018 levels starting in 2026. This will significantly increase the amount of an estate subject to Federal taxes. Add to that New York’s estate tax rules and taking the time to create and/or update your estate plan will make a big difference in how much of your estate goes to the people and causes you care about, and how much goes toward taxes.

On January 1, 2018, the TCJA took effect. Certain provisions increased the amount of assets individuals and married couples may gift annually and over a lifetime (as well as leave as part of an estate), with no federal taxes owed. Each year, exemption amounts are adjusted for inflation. For 2024:

  • The annual gift exclusion limit is $18,000 (or $36,000 for a married couple) per person. You do not pay taxes on gifts up to the limit. What’s more, amounts up to the annual limit do not count toward the gift and estate tax lifetime exemption. So, let’s say you are married and have two children. You and your spouse may each gift $18,000 to each child, for a total combined gift of $36,000/child in 2024. You won’t have to pay taxes on the gift and the gift won’t apply toward your lifetime gift and estate tax exemption. (There is an exception: if you are married and your spouse is a U.S. citizen, you can gift an unlimited amount to your spouse tax-free. If your spouse is not a U.S. citizen, there is an annually adjusted limit on tax-free gifts. For 2024, that amount is $185,000.) To qualify for the annual gift exclusion, the gift must be a present interest gift.
  • The gift and estate tax lifetime exemption is $13.61 million (or $27.22 million/married couple). Amounts above the lifetime exemption are taxable. Even though the exemption is scheduled to decrease starting January 1, 2026, any exemptions for 2018 through 2025 will be honored at the higher exemption amounts in effect at the time. The Federal tax law has a portability provision that provides for the unused exemption of the first spouse to die to be available to the surviving spouse if an estate tax return is filed when the first spouse passes away and the surviving spouse is a U.S. citizen.

Both the annual limit and lifetime exemption will be adjusted for inflation again at the start of 2025. Then, on January 1, 2026, the gift and estate lifetime exemption goes back to its pre-2018 level of $5 million, adjusted for inflation (so it’s expected to be in the $7 million to $8 million range). This will significantly reduce the amount of assets that can be gifted over a lifetime and passed on as part of an estate tax-free. In New York, it’s a bit more complicated.

New York does not have a gift tax; however, it does have different rules for estate taxes. Key differences include:

  • An estate tax exclusion is tied to federal tax laws from 2014 and gradually indexed for inflation. For 2024, the New York estate tax exclusion amount is $6,940,000.
  • However, there is a “cliff” built into the calculation. If a decedent’s taxable estate is between 100% and 105% of the exclusion amount as of the date of death, exclusion benefits phase out. There is no exclusion benefit if a taxable estate is more than 105% of the exclusion amount as of the date of death. This means New York State estate taxes are due starting with the first dollar of assets.
  • Gifts made within three years of death are not excluded and are “clawed back” to be included in the calculation of New York estate taxes.
  • New York does not have a portability provision and, thus, does not allow an unused exclusion amount to transfer to a surviving spouse.

There are actions New Yorkers can take to stay within the state’s exclusion amount while avoiding the “cliff” and maximizing opportunities under Federal estate tax laws. To learn more about your options, contact RBT CPA Trust, Estate and Gift Practice professionals by emailing Ita Rahilly, CPA, at irahilly@rbtcpas.com. Your RBT CPA client manager is also available to help start the discussion, in addition to handling your accounting, tax, audit, and business advisory needs. Give us a call today.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Our Take on What’s in Store for Veterinary Practices in 2024

Our Take on What’s in Store for Veterinary Practices in 2024

The veterinary industry has certainly seen its share of ups and downs over the last few years in terms of business valuations, acquisitions, consolidations, sales, and general performance. Now that businesses are getting more accustomed to operating in an environment marked by high inflation (that’s coming down) and high interest rates (that will likely come down), and the threat of a recession is waning, we predict 2024 will foster greater stability in the veterinary marketplace.

Starting with acquisitions and consolidations, following last year’s lull and the prior two years’ bubble, we anticipate there will be a gradual uptick in 2024. With so many of the larger veterinary practices and hospitals already targeted for acquisition and consolidation, we would expect to see interested parties begin exploring smaller practices, with two or more doctors and strong profitability. While valuations may be up slightly from last year, returning to 12 to 18 times EBITDA common in 2021 and 2022 is not likely.

There’s also indication that deals will involve less cash up front, be more complex, and cover longer time spans. Considering continuing labor challenges, it wouldn’t be surprising for acquirers and consolidators to look for current doctors to sign on to longer employment contracts than in the past.

As for actual business performance, the environment remains challenging. Pet owners are tightening their belts to address the impact of inflation and interest rates on their disposable income. A number of sources are citing decreases in veterinary visits and longer time lapses between visits. This will likely continue in 2024.

To offset declines, 2024 will likely see an increased interest in practices expanding their value proposition, by adding or expanding services and high revenue sources (to include things like dental) and exploring technology upgrades. No doubt, promoting operating efficiencies by eliminating non-value-added work with technology and keeping a close watch on inventory and material costs to protect profit margins will remain priorities for all. The upside of all of this effort is that these actions – and their results – make a practice more attractive to buyers and investors.

At the same time, growing interest in new delivery channels like telemedicine and new business models like mobile operations will continue in 2024, although we wouldn’t expect it to be at a pace that causes any major industry disruption…at least not this year.

My observations are general and, in truth, they can turn on a dime (although I don’t think that will happen), especially considering the many factors that can impact the economy and business today.

While understanding the big picture landscape is important to inform goals and business decisions, focusing on your practice is where the real opportunity can be found. Whether you’re looking to develop a business strategy; bring a CFO-like focus to your operations; or need accounting, tax, audit or other business advisory services, please don’t hesitate to give us a call. We are RBT CPAs. For over 50 years, businesses across the Hudson Valley, New York and beyond have partnered with us because they know we believe we succeed when we help them succeed, and we can be Remarkably Better Together.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Safeguarding Your Veterinary Practice: Tips to Counter Cyber Threats

Safeguarding Your Veterinary Practice: Tips to Counter Cyber Threats

While digital technology has brought about significant service and operational improvements in veterinary practices, it has also resulted in a growing number of cyberattacks and threats. Breaches can result in everything from all your data being eliminated to confidential financial information about pet owners being released into the dark web. It can disrupt business, discredit your practice, and hurt your reputation not to mention finances. What can you and your team do to reduce the risk of a cyberattack?

1. Regularly update software.

Obsolete software often contains vulnerabilities that hackers can exploit. Ensure that all software, including your practice management system, antivirus software, and operating system, are always updated to the latest versions. Regular updates not only provide new features but also fix security bugs.

2. Train employees.

One of the biggest threats to cybersecurity is human error. All employees should be aware of potential cyber threats and how to avoid them. Conduct regular training sessions to educate employees on safe online habits, phishing scams, and the importance of strong passwords. (At the end of this article, you’ll find links to free cybersecurity resources, including training. Read on…)

3. Adopt strong password policies.

Weak passwords are one of the most common causes of data breaches. Encourage employees to use complex passwords and change them regularly. Implementing multifactor authentication can also add an extra layer of security.

4. Secure your Wi-Fi network.

Unsecured Wi-Fi networks are an open invitation for hackers. Ensure your practice’s Wi-Fi network is encrypted, hidden, and password protected. Also, consider setting up a separate network for clients to prevent unauthorized access to the practice’s main network.

5. Backup your data.

Regular data backups can save your practice in case of a ransomware attack. Ensure that all important data, including patient records and financial information, is backed up regularly in secure external storage or cloud-based systems.

6. Invest in cyber insurance.

While preventive measures are crucial, having a safety net in the form of cyber insurance can mitigate financial losses in the event of a cyber-attack. Cyber insurance can cover costs related to data recovery, customer notification, and potential legal liabilities.

7. Have an incident response plan.

In the unfortunate event of a breach, a well-documented response plan can limit damage, and reduce recovery time and costs. This plan should outline how to isolate affected systems, who to notify, steps to recover lost data, and how to analyze the breach to prevent future incidents.

 

More information and free resources – including training – to support and build your cybersecurity plans are available through CISA (the U.S. Cybersecurity and Infrastructure Security Agency). In addition, CISA created StopRansomware.gov, with free resources for organizations of any size to protect themselves from becoming a victim of ransomware and knowing what to do before, during, and after an attack.

Cybersecurity should be a top priority for every veterinary practice. By implementing robust security measures and fostering a culture of cyber awareness, you can shield your practice and clients from potential threats.

To free you up to focus on important aspects of your business, like cybersecurity, please know RBT CPA professionals are available to handle your accounting, tax, audit, and business advisory needs. Give us a call to learn more.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

What’s Your Exit Strategy for Your Veterinary Practice?

What’s Your Exit Strategy for Your Veterinary Practice?

Whether you are five years or 35 years away from retirement, understanding the long-term options for your business should guide the strategies and actions you take today.

No doubt, the most lucrative opportunities rest with selling to corporate consolidators. It’s estimated that about 25% of veterinary practices are now owned by a corporation, with momentum expected to continue in the years ahead. These corporations are learning how to maximize profitability of practices, with systems, processes, policies, purchasing, and more.

Consolidators have also learned where their biggest earning potential lay.

So, they target practices in large urban areas with more than two veterinarians on staff. Emergency services practices are among the most popular. Strong financials, brand, client base, reputation, and more all come into play, as do updated facilities, systems, lab equipment, and staff. (Let’s not forget state regulations. New York is one of several states prohibiting corporations from practicing veterinary medicine. To make a sale, a licensed veterinary owner needs to continue working and managing the medical side of the business.)

In recent years, it wasn’t uncommon to hear about corporate consolidators offering 10x to 15x (and sometimes even 20x) a practice’s value. It appears that these offers may have reached their peak and are coming in lower, but still higher than what you can get from a private buyer. However, this option is not available to everyone. If you find that your practice does not meet the criteria corporate consolidators are looking for, you still have options.

While corporate consolidators have definitely changed the landscape, there are still veterinarians who want to run their own business and be their own boss. With a severe talent shortage and pipeline, this pool of interested purchasers is smaller than in the past and they can’t offer the same multiples as large corporations.

Although the traditional process of selling a practice to an up-and-coming vet can be cost-prohibitive, especially when you consider student loan debt and the current economic environment, there are creative ways to structure customized sales to benefit both the buyer and the seller. (RBT CPA professionals can provide more details based on your specific practice and situation.)

One other option to consider: a merger.

While another veterinary practice in the area may have been your competitor for years, a potential merger can lead to more options for your exit strategy. With economies of scale, you can improve your financials, productivity, and purchasing power. A larger practice may be more attractive to recruits. You have more options for selling out to the partnership or an up-and-comer. This could also be the step that puts you on a corporate consolidator’s radar.

Regardless of where you are in your journey, it’s never too early to start exploring and planning for your exit strategy. If you need advice or assistance with your existing strategy, any aspect of operating a business, or accounting, tax, and audit needs, please remember RBT CPAs is here to help. Give us a call to learn what we can do for you and your business.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Equipment Purchases and Certain Facility Updates to Maximize Tax Advantages

Equipment Purchases and Certain Facility Updates to Maximize Tax Advantages

Have you been thinking about purchasing new or used medical equipment to enhance your veterinary services? How about upgrading technology and software or updating your facility and equipment? With end of year approaching, you have limited time left to consider whether to purchase, lease, or finance certain assets to take advantage of Section 179 tax benefits. It’s also a good time to consider how Section 179 may play into your business and tax strategy for 2024.

Section 179 uses first-year expensing. That means you can deduct the expense for an eligible asset immediately, rather than depreciating it over time. It serves as an incentive for a business owner to invest in the business and enhance its capabilities and services with the purchase and installation of capital equipment.

One big caveat: You must put the asset you purchase into service the year that you plan on taking the deduction. With just weeks left in 2023, it will be important to account for this in your planning.

Most small and mid-sized business owners qualify for Section 179 deductions. Qualifying purchases can include office furniture and equipment; computers and software; certain vehicles (some with annual deduction limits); machinery and medical equipment; and other property used for business. Security systems, HVAC systems, roofs, fire protection systems, and other structural improvements to non-residential buildings may also qualify for a Section 179 deduction.

Equipment can be new or used (as long as you weren’t the prior owner). It can be purchased outright, financed, or leased. So, let’s say you want to purchase qualifying equipment for $1 million and you have $250,000 for the down payment and finance the remaining $750,000. As long as the equipment is put into service this year, you can deduct the full $1 million this year.

Through 2026, there’s an added bonus. For expenses not eligible for the Section 179 deduction, there’s a bonus depreciation allowance in year one. For 2023, bonus depreciation is 80% — remember, that’s in addition to regular depreciation. The bonus depreciation decreases for the next three years (60% for 2024, 40% for 2025, 20% for 2026). Starting in 2027, this additional benefit will no longer be available. Because of this phase out, businesses benefit the most by making capital purchases sooner rather than later.

Section 179 numbers to know for 2023:

  • Maximum 179 deduction: $1,160,000
  • Phaseout threshold begins at $2,890,000 and ends at $4,050,000. (So, if you buy eligible assets that cost more than $2,890,000, your maximum 179 deduction is reduced dollar for dollar by amounts over $2,890,000. Purchases above $4,050,000 are not eligible for a 179 deduction, but bonus depreciation can still apply.)
  • Bonus depreciation: 80%

 

If you need help determining whether to act quick to take advantage of Section 179 this year or whether to make it part of your tax strategy for 2024, your RBT CPA client manager can help – reach out to him/her today. Please remember RBT CPAs is here to help with your accounting, tax, audit, or business advisory needs. Interested in learning more? Give us a call today.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Take Control of Your Veterinary Practice with a Budget

Take Control of Your Veterinary Practice with a Budget

A budget can significantly reduce the stress associated with running a veterinary practice – especially during uncertain economic times – by helping you evaluate performance, set goals, measure progress, and make informed short- and long-term decisions and plans. With a budget, you can proactively manage your practice, making the most of it when business is good and successfully navigating more challenging times.

The best place to start is with the basics: Revenue minus expenses equals profits.

Revenue

Revenue is how much money is coming into your business. You should set revenue goals and growth based on a number of considerations:

  • Will your annual revenue goals on top line revenue help you achieve goals for profitability?
  • Are you setting annual price increases for non-shoppable services high enough to absorb expected increases in prescription drugs, payroll, etc.?
  • Are revenue goals achievable based on doctors’ current production levels?
  • What can you do – from coaching to adopting new lines of business or services – to help doctors achieve revenue goals?
  • Do you review doctor production with associate vets to ensure they reach weekly and monthly goals?

When it comes to revenue, plan on tracking it weekly, monthly, quarterly, and annually so you can see how it may be fluctuating in the short-term; compare it to past performance; and set goals for the future. (You can also use it to identify seasonal patterns so you’ll know when you can afford to increase spending and investments, and when to tighten your belt.)

Expenses

Expenses represent money that is going out of your business. There are fixed expenses which don’t change from month to month and variable expenses. The more detailed you can be about your expenses, the more empowered you are to make informed financial decisions.

  • Fixed expenses can include mortgage/rent; certain utilities (phone and Internet); base salaries; property taxes, insurance premiums; and debt repayments.
  • Variable expenses depend on use. Certain utilities like oil or electric can vary, as can overtime costs. Account for office supplies, external lab costs, pharmaceuticals, vaccines, inventory costs, over-the-counter medicine (vitamins, flea and tick treatments, shampoos, ointments), pet food, preventive care products, electronic monitoring chips, professional fees (for a lawyer or accountant), new equipment, and cleaning services and supplies.

With expenses on the rise in recent years, it is important to budget for your expenses and expected increases before finalizing revenue goals.

Profit

Profit is the money you have left over. A portion should be used to build an emergency fund (covering three to six months of expenses) so unexpected expenses don’t put you into debt. You may want to allocate a portion for reinvesting into your business. The remainder is how much you make for running your business.

What if there’s nothing leftover or a negative balance? That’s considered a loss. Budgeting will either help you accommodate the periodic loss by planning for leaner months or help you identify immediate actions you can take to turn things around.

Depending on your bandwidth and capabilities, you may decide to set and manage your own budget using spreadsheets or templates; employ software to promote accuracy, insights, speed, and ease; and/or engage an accountant to operate as a part-time Chief Financial Officer to handle the whole process, helping you to understand results and your options for next steps.

If you need help creating, monitoring, or adjusting your budget, remember, your RBT CPAs client manager is just a phone call away. For more information, give us a call today.

 

RBT CPAs is proud to say all our work is prepared in the U.S.A. – we never offshore. As a result, you get peace of mind that your operation’s financial and confidential information is handled by full-time, local staff who have met our high standards for quality, ethics, and professionalism.

Protecting Profits from Increasing Labor Costs

Protecting Profits from Increasing Labor Costs

It’s a catch 22. You need to expand your staff to increase income, but additional labor costs have the potential to cut into profits and cash flow.

There is an option: complement your recruiting plan with a proactive business plan to manage the impact of potential labor cost increases.

Let’s start with what you need to consider when developing your recruiting plan. We’re all familiar with the data. There are more veterinary jobs than candidates and according to the 2023 AVMA State of the Profession report new graduates are experiencing the highest rates of job offers ever.

Competitive pay and meaningful benefits are table stakes for Millennials and Gen Zers. In fact, pay and benefits are the number one reason Gen Zers left a job in 2022, and many indicate they won’t apply to a company that doesn’t include pay information right in a job posting.

While a number of factors impact pay, according to the American Veterinary Medical Association (AVMA), veterinarians who graduated in 2022 received an average salary of  $111,242 ($124,686 at corporate practices and $105,637 at private practices). In addition, 81% of corporate practices offered a sign on bonus (averaging $27,181) while 42% of private practices offered one (averaging $10,678).

As for benefits, medical and 401(k) plans top the list, but they are only the start. Considering the amount of student loan debt many new vets carry, student loan repayment and financial advisory services are also of interest. (The AVMA reports, “Among new veterinarians, 38% had $200,000 or more in debt from earning their veterinary degree, inclusive of 13% who had $300,000 or more in debt. Another 18% had no such debt, while 10% had debt of less than $100,000, and 34% had debt of $100,000 to less than $200,000.”)

In general, new generations of workers put more value on working to live rather than the other way around. So, work-life balance via time-off benefits and flexible schedules are priorities. According to the American Animal Hospital Association (AAHA), paid time off is one of the biggest negotiation points of recruits resulting in demands for weekends off, four-day/ 32-hour work weeks, and three to four weeks of time off.

As for the actual job, new workers want stability and are looking for an employer that offers learning and development (especially mentoring), a career path, and a sense of purpose/opportunity to make a difference. In fact, Peoplekeep.com reported, “A Linkedin Learning report found that 94% of employees say they would stay at a company longer if their employer invested in their personal and professional development.”

Beyond the work, new employees are looking for fit and how a potential employer treats employees. Many are defining their own professional brand and values and using that criteria to see how a potential workplace aligns. (Remember, these digital natives grew up with social media and smart phones and will no doubt go online to check out your reputation as an employer and a place to work.)

With these factors top of mind, how can you design an employment offer that enables you to compete for talent without putting profits and cash flow at risk? Consider your options and potential financial impact before ever making an offer. For example, can you negotiate lower pay for more time off or flexibility? How can you work differently to fulfill a new hire’s mentoring, learning and development needs? Do you really need that non-compete agreement or can it be a negotiation point?

Once you’ve developed an offer, calculate its potential impact on profits and consider whether operational changes can help offset cost increases.

  • Financial management: Do you regularly track and update your budget, expenses, and revenue? Are there ways to reduce expenses (i.e., group purchasing for supplies)?
  • Fee structure: Is it competitive? Do you review it regularly?
  • Operational efficiencies: Have you used process mapping to identify potential process efficiencies (i.e., scheduling, billing, inventory management, etc.)?
  • Billing and collections: Review procedures to promote accuracy and timeliness; promptly follow-up on outstanding payments; and institute a process for overdue account collections. Consider whether payment plans or an online payment channel can help.
  • Inventory management: Track inventory levels and reordering; review usage patterns; and negotiate with suppliers.
  • Expand/diversify revenue streams: Consider offering additional services (i.e., telehealth or pet grooming/boarding).
  • Tax strategy: Consider conducting a cost segregation study to determine the impact of increasing depreciation of facility components on new construction.

If you need support to create a winning employment deal or more insights into business changes that can help pay for higher salaries, more benefits and other new hire demands, RBT CPAs and our affiliates are here to help. Give us a call to find out how we can help you with financial planning, cash flow management, accounting, taxes, audits, pricing, recruiting, retention, and more.

 

RBT CPAs is proud to say all of our work is prepared in the U.S.A. – we never offshore. As a result, you get peace of mind that your operation’s financial and confidential information is handled by full-time, local staff who have met our high standards for quality, ethics, and professionalism.

Veterinary Practice 2.0: Creating a Happier & Healthier Workplace

Veterinary Practice 2.0: Creating a Happier & Healthier Workplace

While working hard to keep your animal clients healthy and their owners happy, remember, there’s one more contingent you need to take care of – you and your team.

The toll the veterinary industry is taking on providers is shocking. Suicide, mental health issues, established practitioners walking away from the field, not to mention a talent gap that’s going to keep growing over the next decade. While veterinary school enrollment increased 4.7% between 2021 and 2022, it’s still down down over 9% when compared to pre-Covid enrollments (Boatright, Kate. “The Next Generation of Veterinarians.” October 10, 2022. Todaysveterinarypractice.com.). There is one good thing to come out of all of this – a growing recognition that things have to change.

As reported on Veterinary Integration Solutions.com, “Veterinary organizations must prioritize a healthy workplace culture now more than ever. With so many industry professionals succumbing to burnout and exhaustion, clinics and hospitals that fail to focus on the wellbeing of their workforce will quickly collapse. Defining and implementing a positive workplace culture must take precedence in every veterinary group.” (Zak, Ivan. “Defining and Implementing Workplace Culture in Veterinary Groups.” July 6, 2021. Veterinary Integration Solutions.)

Here are some considerations to help get you started on defining, creating, and maintaining a workplace that promotes the health of everyone – from clients and their owners to you and your staff:

Examine your practice’s culture.

With so many competing demands each day, it can be hard to fathom taking time to define something abstract like workplace culture, but this investment can mean the difference between running a practice that goes through the motions just to keep up and creating a work environment that energizes, engages, and rewards all your constituents. Taking time to define why your practice exists (mission), what it strives to achieve (purpose), your long-term goal (vision), and how work gets done (values) helps guide day to day operations, decision-making, prioritizing, and more. Perhaps most important, these culture drivers help set boundaries and define where to put energy, giving focus and instilling calm to what can otherwise be an overwhelming and chaotic environment.

Find the right people for your team.

While the workforce shortage can easily lead to rash hiring decisions, having the right people who align with the culture you are trying to create and maintain is critical. Just one person who doesn’t fit can turn what could be a healthy, professional environment on its head. So even though it may be tempting to rush through the hiring process once the decision is made to grow your team, take the time you need to ensure a good fit for your practice, team, and future.

Be thoughtful about compensation and benefits.

With so much competition for talent, your total rewards package should show the value you place on staff, incentivize key behaviors to success, satisfy employee priorities, and align with your company’s values. While fair pay and sign-on bonuses are table stakes (that should be based on competitive practices for your geography), up and coming generations of workers give equal weighting to work life balance – one of the biggest keys to promote a healthy work environment. Practices are exploring and offering three- and four-day work weeks; flex hours; adopting no weekend work policies; offering generous time off packages; and more. If you’re concerned about how new policies may impact your practice, conduct pilot programs so you can understand implications before making something permanent. Perhaps most important: be sure to lead by example. When employees see you taking the time to unplug and recharge, they’ll know it’s okay for them to do the same.

Communicate, communicate, communicate.

While putting a lot of time and energy into marketing and customer communications, remember to do the same with your team. Weekly group meetings keep everyone moving in the same direction with a clear understanding of expectations and priorities. One-on-one discussions show each person on your team that they matter and help you understand their priorities and needs (i.e., learning, development, growth opportunities, etc.) so you can make adjustments accordingly. When done consistently, communication helps build trust, shows you care, and reinforces that your employees matter and their input makes a difference.

Evaluate and update how work gets done and who does it.

Are there opportunities to lighten workloads with new technologies? Can responsibilities be shifted to foster better teamwork and more equitably share the work? Is it time to add more staff or new roles to your practice? Should work processes be evaluated to eliminate non-value-added activities while boosting productivity? Do you need to add time and opportunities for staff to recharge throughout the day?

Seek feedback.

Taking a pulse every once and a while to make sure you’re on track to create the type of workplace you always imagined can provide you with valuable insights on what’s working and should continue, and opportunities for improvement. Embed regular temperature checks into your ongoing communication processes. This includes exit interviews, where departing employees may feel more comfortable sharing opportunities to improve.

Perhaps most importantly – ask for help when you need it.

For example, did you know RBT CPAs can be a trusted partner to help with many aspects of your business – from bookkeeping and acting as a virtual CFO to providing business advisory services, Human Resources support (via our Visions HR affiliate), and, of course, by providing accounting, tax, and audit services? We invest a lot of time in getting to know and understand the veterinary industry, so we’re in the best position to add value and promote success.

Watch for more thought leadership articles in the months ahead for deeper insights into building a happy and healthy veterinary business. If you’re ready to get started on doing more today, give us a call today – we’d love to have the opportunity to discuss what we can do to help you run a happier, healthier, and more successful practice.

 

All work performed at RBT CPAs is made in America by local, full-time staff and team members. We never outsource or offshore, so you always know who is handling your confidential data.

Is Your Vet Practice Under the Weather? Maybe the Cloud Can Help

Is Your Vet Practice Under the Weather? Maybe the Cloud Can Help

As an owner and/or manager of a veterinary practice(s), the last thing you need is to add a growing list of IT responsibilities to an already full workload balancing the talent shortage, ever-changing customer demands, and a wonky financial environment – not to mention taking care of animals, their caretakers, and your business. While changing your IT environment may be the last thing on your mind, perhaps you should consider making it the first, as cloud computing solutions help manage and/or address many of the challenges facing veterinary practices today.

Say goodbye to IT responsibilities.

When you move to a cloud (a.k.a. Internet) solution, your web-based solution provider takes on responsibility for keeping the system updated, working at its peak, and secure. You’ll no longer be required to buy, install, and monitor equipment like a server or manually install patches (or pay someone to do it). You won’t have to worry about backing up data, a system going down, or protecting data – that’s all on your provider, too. Rather than keeping an IT person on call, most cloud-based service providers include customer service and IT assistance as part of their fees.

Increase productivity and decrease stress.

Help yourself (and your team, if applicable) cut down on administrative work so you’re free to focus on what you do best – whether that’s boarding animals, providing same day care, and/or running a pet hospital for longer-term needs. Cloud-based software can help you communicate with animal owners; send reminders about visits, care, or prescriptions; bill for services (or follow up on bills); and more. Self-scheduling tools save time for both you and your customers. You can even operate more efficiently by accessing and updating health records and treatment plans within seconds from any examination room with just a few keystrokes.

Better manage finances, inventory, and staff.

Cloud-based services are usually by subscription, so you know how much it costs each month and can budget accordingly. Some solutions include tools that will allow you to perform back-office responsibilities (like billing, payment processing, and collections) while gathering data that can help you analyze different aspects of business (i.e., inventory). What’s more, you don’t have to be tethered to a desk, as cloud-based solutions can be accessed from anywhere there’s an Internet connection and from any Internet-enabled device (i.e., phone, tablet, or laptop).

Prepare to grow.

Cloud-based solutions are oftentimes scalable, so you can add to them, add users, or make changes as your business needs change. Plus, even if you have multiple locations now or add locations in the future, data stored in the cloud can be viewed and updated in real-time from any location.

Making the transition to a cloud-based solution may mean some short-term issues you may want to be prepared for, just in case.

  1. Shop around. There are a wide variety of vet-focused cloud-based solutions available. Consider exploring several options so you can understand the full breadth of opportunities available, evaluate pricing and contracts, and make the best choice for your business.
  2. With the implementation of new software comes new training needs. Support your staff leading up to and through the transition by hosting training to promote their comfort with new software. Also, make sure you have a point of contact at the software provider’s who can be available to answer technical questions, especially during the transition.
  3. Check data for accuracy. Upon transitioning to a cloud-based software, make sure client information and other data transferred correctly (i.e., Did your clients’ open accounts receivable balances transfer correctly?). Data accuracy will be vital to making the most of financial reporting tools. It’s easiest to identify and fix any issues identified early.

While you’re busy considering cloud-based solutions, remember, RBT CPAs is here to help free you up to concentrate on your business. We have been providing accounting, tax, audit, and business advisory services in the Hudson Valley and beyond for over 50 years, and we believe we succeed when we help you succeed. Interested in learning more? Give us a call today!

Work Less, Succeed More By Outsourcing the Financial Part of Your Veterinary Business

Work Less, Succeed More By Outsourcing the Financial Part of Your Veterinary Business

Did you happen to notice People Magazine’s recent article entitled: “New Studies Find Veterinarian Shortage Could Leave 75 Million Pets without Medical Care in 2030”? (Bender, Kelli. March 2, 2022.) There’s something ironic about People Magazine profiling the vet shortage; still, it shows just how dire the situation is and why the veterinarian industry needs to change.

The article reports that 2,700 people enter the veterinary field each year and about 2,000 retire. With pet healthcare spending predicted to increase 33% between 2019 and 2029, there will be an estimated shortage of 15,000 vets by 2030. The American Animal Hospital Association (AAHA) reports that number may even be higher, potentially coming in at 18,000 by 2031. What can a veterinary practice do?

I’m a CPA. No one would ever expect me to be able to perform a medical exam or procedure on my 17-year-old Maltipoo (named Angel). So, why are veterinarians expected to take on the dual role of managing a business and practicing medicine? There is another option.

About 25 years ago, I was hired by an animal hospital to do its taxes. Little did I know that engagement would put me on a path to build my career providing bookkeeping, accounting, and advisory services to numerous veterinarian practices in the Hudson Valley and, later, in other locations along the East Coast and across the U.S.

None of the doctors I would come to work with had taken business and/or finance classes while earning their medical degree. Eventually, this put them at a disadvantage. They immediately recognized that by engaging me, they were freed up to do what they were passionate about – taking care of small animals or, in certain cases, equines.

At the same time, I found an industry and clients who really appreciate the value I deliver, which evolved from bookkeeping, account payables and receivables, tax payments, payroll, and budgeting to include financial analysis, forecasting, and strategic business planning. In essence, I became a part-time Chief Financial Officer for many of my veterinary clients. It was a natural fit that benefited everyone. Fast forward to today…

I’m a partner in an accounting firm and most of my clients are veterinarian hospitals and practices. I love their passion for what they do and how much they value what my team and I bring to the table. More than just number crunchers, in the majority of cases, we have become part of our veterinarian clients’ strategic management and planning teams.

We know the right questions to ask and when to ask them. Do you know your numbers? Are you profitable monthly? What is your patient volume going to look like in a recessionary period? Are you getting monthly financial statements and understanding what they mean? Do you know how your business is trending to last year and benchmarking against competitors in the area? Do you need to increase rates to reflect the price of prescriptions and payroll? Given the economic environment, can pet owners afford wellness visits? Are your margins shrinking? Who is monitoring all of this? Where do you want your business to be in five years and how will you get there? Are you thinking about selling? What is your business valuation and how does it impact what you decide to do next?

We also help practice managers and doctors understand how different courses of action will impact business so they can make informed decisions. This type of support is even more meaningful given today’s economic uncertainties; supply chain challenges; changing tax, accounting, and legal requirements; cybersecurity issues; and more.

Plus having knowledge of both the veterinary industry and accounting, tax, and advisory services positions my team and I to bring solutions for a variety of challenges. For example, do you know how the Secure 2.0 Act will allow your employees to pay off student loans while you put matching funds aside for their retirement? Have you explored how the Inflation Reduction Act can help you reduce certain monthly expenses and your carbon footprint?

So, enough about me. What about you? How can RBT CPAs help lighten your workload, respond to current challenges, and set the stage for greater success in the future? We would love to have a chance to speak with you and show how we can deliver value, while freeing you up to do what you do best: take care of animals and their people. Give us a call today.