Veterinary key performance indicators

Question 1

How are KPI’s used in veterinary business?

Answer 1

-Veterinary business monitors a range of KPI’s to make improvements
-Measuring doesn’t result in improvements alone
-The first step is to identify what you want to know
-Keep calculations consistent.
-Businesses usually focus on a handful of indicators and review them regularly
-They don’t have to be just financial data.

Question 2

What kind of financial metrics do you think would be useful to monitor in veterinary practice?

Answer 2

-Total practice revenue/turnover
-Net profit percentage
-Revenue cneters as a percentage of total revenue
-Returns on sales
-Debt to Equity ratio
-Inventory turnover measures: inventory turnover, and days in stock
-Debtor control measures: average debtors outstanding, debtor days.

Question 3

What kind of sales metrics do you think would be useful to monitor in veterinary practice?

Answer 3

-The standard measure is the full-time equivalent (FTE).
-This measures the number of full-time equivalent vets in the practice, even when some vets might be part-time.
-Two full-time vets plus one vet working 0.4 plus one vet working 0.6 equals 3 full-time equivalents in this practice.
-Veterinary productivity: revenue per FTE, annual transactions per FTE, active clients per FTE, new clients per FTE, and lapsed clients per FTE.
-Transactions: average transaction value, and annual transactions per active client.

Question 4

What kind of cost control/efficiency metrics do you think would be useful to monitor in veterinary practice?

Answer 4

-Total costs to total revenue percentage.
-Cost centres to total revenue: drugs to total revenue percentage, support staff cost percentage, and veterinary staff costs percentage.
-Support staff to veterinary ratios.

Question 5

How to measure increases in sales?

Answer 5

-Two key performance indicators (KPIs)
1.) Average transaction value: total revenues divided by the number of transactions.
2.) Footfall: average annual transactions per active client equals the number of transactions divided by the number of active clients.

Question 6

What is a transaction?

Answer 6

-Any time a client purchases something from the practice, so may not necessarily be a consultation
- Could be a retail sale only (e.g., pet food).

Question 7

Increasing sales: Average Transaction Value?

Answer 7

-Average transaction value (ATV): total revenues divided by the number of transactions.
-On average, how much do we earn from each client transaction?
(e.g., £2,000 income from 100 transactions equals ATV £20

Question 8

How can we increase the ATV?

Answer 8

-Clients may be willing to accept a price increase in line with inflation
-Clients won’t be willing to accept increases above this if they perceive no additional value.
-How can we show additional value?

Question 9

What could you do increase the value?

Question 10

Increasing Sales: Footfall?

Answer 10

-Average transactions per active client average annual equals the number of transactions divided by the number of active clients.
(e.g., if 100 clients made 120 transactions in a year, then the average annual transactions per client is 120/100= 1.2).

Question 11

What could you do to increase footfall?