UK equine veterinary practices are benefiting from a financial analysis tool designed to improve profits.
Profit Solver was initially released in the US, where more than 300 practices now use it, and, according to Zoetis, practices on this side of the Atlantic have now been “reaping the benefits” following its UK launch last year.
A company spokesman said: “Traditionally, veterinary practices have set their prices by simply adding a set mark-up, without knowing which services make a profit or loss and without understanding exactly how overall practice profit is being generated.”
No more guesswork
The spokesman continued: “Profit Solver replaces guesstimates with precision. It uses the practice’s own data to calculate the exact cost for the 130 most commonly performed veterinary services, representing 90% of the revenue generated by the practice.”
Labour, inventory and equipment costs are combined with time-and-motion studies for each service. Profit Solver then assesses the variance between cost and price to reveal profit or loss.
A collection of cost data is then used to calculate the correct pricing to cover costs and deliver a pre-determined profit margin.
The programme examines various elements including, including which member of staff performs which part of the procedure, how long it took and what equipment and materials were used.
According to the company, Profit Solver has also had keen take-up from the small animal veterinary sector.
For the 28 practices that have utilised the service so far this year, it has delivered an average earnings before interest, taxes, depreciation and amortisation (EBITDA) growth of 36%.