Recently, I had the opportunity to join VetVet for a webinar focused on bookkeeping guidance for veterinary practices. We covered a lot of ground—ranging from day-to-day recordkeeping basics to the bigger financial metrics that help owners understand how their practices are really performing.
I was excited to be part of this conversation because these are the same questions and challenges we see every day when working with clients. Below is a summary of the key themes we discussed during the webinar.
Start with the basics: documentation and consistency
One of the first things we talked about is the importance of keeping proper documentation. Credit card statements alone aren’t enough—especially in the event of an audit. Veterinary practices need to retain actual receipts for their expenses, whether physical or digital.
We also recommend:
- Documenting business meals (who attended, the purpose, and the date)
- Keeping a mileage log if a personal vehicle is used for the practice
- Recording all transactions in accounting software and keeping it up to date
- Reconciling accounts at least monthly
Consistent bookkeeping creates reliable data, and reliable financial data is what allows veterinary practice owners to make informed decisions.
Moving from paper to digital bookkeeping systems
For practices still juggling paper receipts and invoices, transitioning to digital systems can feel overwhelming—but it doesn’t have to happen all at once.
A few practical first steps we discussed include:
- Asking vendors to email invoices and bills instead of mailing paper copies
- Using a receipt-capture tool to store documents digitally
At Terrain, we provide a client portal where receipts can be emailed or uploaded via a mobile app. There are also other tools available, such as Dext and Hubdoc. The goal is to reduce reliance on physical paperwork and make veterinary clinic financial information easier to organize and access over time.
Using your PIMS and accounting software together
Strong financial data starts with a solid Practice Information Management System (PIMS). Your PIMS tracks revenue, sales, client information, billing, and inventory—but it’s most effective when paired with accounting software that captures expenses and labor costs.
We recommend:
- Choosing a PIMS with robust reporting capabilities
- Setting reports to be sent automatically on a regular schedule
- Making sure inventory is tracked accurately
On the bookkeeping side, we use QuickBooks Online, though there are other options available. We also recommend using the AAHA Chart of Accounts, which allows veterinary practices to benchmark against industry standards and break down revenue and costs in a meaningful way.
Key financial metrics for veterinary clinics to watch
During the webinar, we talked about several core financial metrics that veterinary practice owners should review regularly—ideally on a monthly basis.
Some of the most important metrics include:
- Revenue, compared year-to-date and to the same period in the prior year
- Revenue by service category and revenue per veterinarian
- Cost of goods sold (COGS) and gross profit margin
- Net income (the bottom line)
- Client retention and average transaction value
These macro-level numbers provide a high-level view of how a veterinary clinic is performing and where adjustments may be needed.
Benchmarking veterinary practice expenses against industry norms
We also discussed general benchmarks for small animal practices that many veterinary practices aim for, keeping in mind that every clinic is different:
- Total labor: approximately 40–50% of revenue
- ~20% veterinarian salaries
- ~20% support staff salaries
- ~8–10% payroll taxes
- Cost of goods sold: typically 20–25%
- Facilities costs (including rent): around 10% or less
- Administrative costs: around 5%
- Advertising and marketing: roughly 1–5%
Comparing your clinic’s numbers to industry norms can help identify areas that may need closer attention, but should be adjusted for location, practice type and organizational structure.
Planning ahead: taxes, retirement, and budgeting
We strongly recommend that veterinary practice owners work with tax planning and financial planning professionals to ensure their business structure is optimized and that they’re taking advantage of available deductions.
This is also important when thinking about retirement options, which can be difficult to navigate as a small business owner without expert guidance.
Budgeting is another helpful planning tool. A simple budget—often based on last year’s numbers and adjusted for known changes—gives practice owners a target to measure against, even if things don’t go exactly according to plan.
Contractors and 1099 considerations for veterinary practices
Finally, we touched on common questions around issuing 1099s to relief veterinarians or contractors. Requirements can vary depending on how someone is paid and how their business is structured, which is why collecting a W-9 before work begins is so important.
A bookkeeper or tax professional can help determine whether a 1099 is required in each situation.
More help: How to Prepare for 1099 Filing Season: A Guide for Vet Clinics
Watch the full VetVet webinar
If you’d like to hear the full conversation and dive deeper into these topics, you can watch the webinar on VetVet’s website:
Watch the webinar replay on VetVet
Want to continue the conversation?
If you’d like to learn more about bookkeeping for veterinary practices or want to speak with me directly about your practice’s financial systems, we’d love to connect.
— Abby
About Abby Gallo & Terrain Bookkeeping
I’m the CEO of Terrain Bookkeeping, where we specialize in bookkeeping for veterinary practices. Our work is focused on giving practice owners clear, reliable financial data so they can make confident decisions, plan ahead, and spend more time focusing on their teams, clients, and patients.
We understand the unique financial challenges of the veterinary industry—from inventory and labor to benchmarking and compliance.
About VetVet
VetVet is a veterinary practice brokerage that helps practice owners navigate the complexities of buying and selling veterinary practices. With a client-centric, purpose-led approach, they provide personalized guidance through every stage of the transaction process, offering services such as:
- Preliminary Practice Valuation – assessing the worth of a practice based on financial indicators and market conditions
- Buyer Targeting – leveraging a network to find buyers aligned with the seller’s goals
- Comprehensive Transaction Management – coordinating with advisors and stakeholders to support a smooth transaction
VetVet combines industry expertise with a tailored, high-touch approach, helping veterinary practice owners achieve superior results with confidence and clarity.
Learn more at VetVet.co
