The importance of team transparency

Allowing some visibility into the cost of running a veterinary practice can benefit the entire team

Address shrinkage in your clinic by educating your team about the practice financials.

Internal shrinkage is real, but there are things you can do to prevent it in your practice. I have had a drug representative recently share a story of a technician who openly admitted to taking prevention medications and other drugs from a practice at regular intervals. Her reasoning was she felt underpaid and saw how much money the practice brought in every day. “They won’t miss it,” she said.

Listening to that story inspired me to think about what financial information we share (or don’t share) with our teams.

This is not an isolated event. I have met with practice owners who were adamant shrinkage was not—and never would be—an issue in their practice, yet the numbers in some cases did not add up. I have personally been through a shrinkage event in my career, and it turned out to be not only one of my best friends, but someone who had been employed by the practice for decades and was highly trusted.

Depending on what you or the practice owner are comfortable sharing, some teams only see what the practice brings in, and not the other side of what is expended every day just to break even and keep them employed. The reason? I think it varies. If you prefer not to share every aspect of the business, there are ways to give partial details without exposing what you have left sitting on the table at the end of every month or year. Drive transparency by educating your team about the business financials.

The issue I have stated is two-fold: a team member who does not feel like they are being paid their worth, and we have missed the mark sharing how much it truly costs to operate a veterinary practice.

Determine what you will share

Sharing financial information can be uncomfortable as a practice owner because it makes you feel exposed. Further, presenting a profit and loss statement to your team can get overwhelming, so I suggest keeping it simple. When starting to share practice financials with your team, begin with two of the largest expenses: payroll and costs of goods sold. These are the ones we have the most control over, and the team will be able to connect with and understand.

Pointing out how their specific roles impact the profit and loss statement not only increases understanding, but also encourages your team to take ownership of their role in each area.


White goods are a fun introduction to inventory costs. I put colored dots on all my white goods, with each color representing a month of the year. On those colored dots, I write how much each item costs. At the beginning of the next month, I have the team walk around to see how many dots are left over from the previous months and add up the costs. I find this very helpful to illustrate waste (i.e. syringes, catheters, etc.) and help the team consider how much they request to be ordered at one time.

After 30 days, it may shock the team how many dollars (hypothetically) are sitting on the shelf. If necessary, you may want to create a goal and a team reward for reducing the number of white goods ordered/stored every month.

With the remainder of your inventory, you will want to consolidate what you have on the shelf and ensure you are turning products over at appropriate intervals. I perform an ABC analysis on a quarterly basis. My “A” products I like to see turnover at a minimum of 12 times a year; “B” products six to 12 times a year, and “C” products will turnover less than six times a year and should be evaluated for redundancy. The team can help by ensuring medications are filled correctly and paid for prior to leaving the building.

Wasted items can be a shock to the system if you quantify it. Post a sheet up to track wasted vaccines—misfires and ones that are drawn up prematurely and then never used (i.e. candles, pet food, or pill pockets that are pulled off the shelf to use internally. Share the total cost of what was wasted, or used in-house monthly (weekly, if it is extreme).

Set a goal for improvement and celebrate the victories because once awareness is there, the amount of waste tends to drop, especially with a reward!


It is no question that payroll is a practice’s biggest expense. I do not necessarily recommend sharing everyone’s compensation, but you can share percentages with the team. A great starting goal for payroll would be 40 percent of revenue, a metric that includes the entire team, doctors, payroll taxes, and benefits. Sharing where your practice falls monthly is easy to follow, so I would stick with that.

Overtime is typically an easy way to reduce your payroll percentage. I share the percentage of revenue target with the team for payroll metrics, but when it comes to overtime, I share the actual dollar amount each week. There are many ways to get overtime under control, but I start with just having the conversation and prepping the team that we will be monitoring and working on decreasing it.

Working on getting payroll numbers in check can certainly be a rabbit-hole scenario. Increasing revenue leads to increasing pricing, and I could keep going. Start with the low-hanging fruit—bringing attention to overtime and basic awareness of where the practice’s payroll percentage is currently. Payroll can take some time to get a handle on so make sure to celebrate even the tiniest victories.

Connect with the team

One of my absolute favorite things to do in a veterinary practice is getting to know each team member. Everyone needs and wants something different in their personal life and career. It is not a one-size-fits-all situation. Preventing shrinkage can start with team members feeling heard, and their financial needs being shared. Take the time to connect with your team. It will be worth it.

During a team member’s yearly evaluation, I help them create a personal blueprint that includes goals, roadblocks, and action plans for each goal. It can be a financial goal and that is great! If they want to make five dollars more per hour, this is where I can share how they can get there and the timeframe in which it can/should be done, or if it is even a possibility within the practice.

If, as a practice, increasing that team member’s salary by five dollars per hour is not in the near future, be straightforward. Let them know it is outside of the possible salary ranges. Never make empty promises or give false hope. Just giving your team a platform to share their needs and wants creates trust and loyalty. It will help with issues such as shrinkage or time clock manipulation. My hope is taking care of your team is a priority and one you take seriously.

Allowing some visibility into the cost of running a veterinary practice can benefit the entire team. Utilize your team meetings to share financial metrics and make it as fun as possible!  Outside of it being a very eye-opening experience for most team members, it builds trust. Make your team feel like they are a part of the business, not just a cog in the wheel.

Emily Shiver, CVPM, CCFP, CVBL, is a certified veterinary practice manager serving as the Florida regional director of operations for Family Vet Group. Her passion is creating and maintaining positive, successful workplace cultures, as well as helping practices increase revenue and the client experience. Shiver enjoys every aspect of inventory and strives to help practices meet and exceed their inventory goals.

Post a Comment