Invoicing strategy: the way to immediate top-line growth - Veterinary Practice
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Invoicing strategy: the way to immediate top-line growth

Christian Kolthoff, DVM, MBA (an executive MBA in change management), a certified mediator and NLP practitioner, started the consultancy bureau praQtice in 2000. Throughout the past nine years the business has grown and expanded into being the largest and leading company in Europe within the field of practice management for veterinarians and dentists. Since the beginning, he has consulted with more than 60 practices in Denmark, Norway as well as in the UK and carried out more than 200 talks, speeches and lectures in Denmark, Norway, the UK and the US. Christian also owns 40% of a veterinary practice in Norway which he visits twice a year and uses as a test field for converting theory into practice

A FUNDAMENTAL aspect in driving a healthy business is to obtain a high level on the return of investments – no matter what you invest. To heighten the levels of success, one solution can be found in proper invoicing methods. You can manage to make an immediate increase in turnover by 15-40% through invoicing correctly.

Charging for professional services has to be a fair deal for clients, staff, the partners and the partners’ families. Vets often work too many hours just to break even.

In order to provide the services and have the equipment that the clients ask for, the vet of today needs to have very high hourly turnover or work very long hours.

Practice owners should decide what a fair remuneration would be. Then they should carry out a retrospective calculation and define what turnover it will take to get them there, and finally calculate how many per cent the average clinical transaction value has to increase. Then they have defined the goal of what needs to be achieved on the invoice side.

This article provides a basic formula on how to reach the goals.

Display results every month

Have you ever tried to train for a running competition? Of course, you would measure your time in order to see if you were improving. The same applies to running a business.

Set up a measuring system, in order to see if you are making progress. Weekly turnover is easy to measure and a good indicator of success. But in the end turnover doesn’t move people who are interested in veterinary science. Vets have to be challenged on a professional level.

Key to all measuring systems is that it has to be easy to perform and it needs to be motivating.

Good measures are:

  • ratio of C0 (only consultation performed) C1 (consultation plus one extra professional service) and C+ (consultation plus more professional services);
  • ratio of dental procedures or any surgical procedure versus clients seen;
  • ratio of re-examinations versus first consults;
  • average clinical transaction value.

Overcome mental barriers

The Florence Nightingale syndrome is dangerous to most practices. Not that it is not good giving, but most practices can’t afford to give services away for free if they want to be able to afford the service levels that clients demand.

The mental model is to provide services to the clients as if it was for free, and then charge for everything done. Think about every time you give something away for free you need to work longer hours, meaning that you don’t see enough of your family or friends.

Try, for instance, to calculate the turnover it takes per minute seeing clients in order to end up with a financial net result of 10% of turnover. In a lot of practices it is more than £5.00 per vet per minute.

Put all services on the bill

Before starting to raise prices you should start charging properly for all that you do. Define what is included in your standard procedures and then charge for all the extras.

As an example, you can decide that a consultation is “10 minutes of physical examination using stethoscope, thermometer + a prescription”. Every item or procedure that is not included in this sentence should then be charged for.

In a lot of practices, more than 20% of the services provided are not on the invoice. A good way to start working on getting more on the invoice is to make workshops within the practice where all the vets spend some time looking through each other’s invoices each month. Done with a smile it can be both fun and very rewarding.

Sell more services

The better vets provide and charge for more services. Find out what the best vets do and then make standard procedures that everyone has to follow. Again you need to measure if you live up to these procedures and if not, why?

Example 1: If you have treated an animal in your consultation room, you should always do a re-examination to check if the treatment has worked. Thus, for almostevery first consultation, there should be on average one re-examination. Check your data and see if that is true for your practice.

Example 2: According to dental specialists, more than 60-80% of your patients need dental work done. In most practices only 3-8% of visits end up in dental work. A lot of animals in need of professional services are leaving your practice without treatment. Why? Make a decision to change this: a well-run practice number of dental procedures should be more than 10% of animals seen.

Adjust prices

Most practices don’t need to raise prices if they start charging for all their services instead. However, there is often a lot of potential income in pricing correctly. Remember that pricing is a part of your marketing and branding strategy. Thus, you can’t just compare with your neighbouring practice.

As a model of inspiration, the thoughts of Morris & Calantone (Figure 1) are well worth looking at. Have fun getting the extra 15%

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