EP21 - The Veterinary KPIs Every Practice Needs to Track for Growth and Profitability

In this episode, we break down the numbers that truly drive success in veterinary practice and why relying on financial guesswork can quietly hold your clinic back.

From average transaction charge to compliance rates, we walk through five essential key performance indicators (KPIs) every veterinary team should be tracking consistently. These metrics aren’t just numbers on a report. They’re powerful tools that shape better decisions, improve patient care, and create a more efficient, profitable practice. 

If you’ve ever felt unsure about your numbers or wondered what you should be paying attention to, this episode is your starting point. 

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Timestamps
00:00 Intro
02:00 Dangers of Financial Guesswork
05:47 Why Do KPI's Matter?
08:53 KPI #1: Average Transaction Charge
11:27 KPI #2: Transaction Count (Visits Per Day)
14:36 KPI #3: Revenue Per Doctor
17:26 KPI #4: Compliance Rates
18:26 KPI #5: Labor Costs Percentage
20:13 Common Mistakes to Avoid
23:27 Outro

Transcript

Intro

SPEAKER_01 0:00

Oh, I d I know what did I just do to it? I just it was itchy, so is it better? You got it. Okay.

SPEAKER_04 0:06

Sorry, I called you bro. No, thank you. I just like this couch.

unknown 0:14

No, I'll be fine.

SPEAKER_04 0:18

I'm her biggest fan.

SPEAKER_00 0:20

Oh my goodness. Alright. Welcome to the vet. Are you okay? Oh my gosh, that's too funny.

SPEAKER_03 0:30

The amount of things Harrison can pull from these videos is way too embarrassing.

SPEAKER_04 0:34

I don't I think Harrison's asleep.

SPEAKER_01 0:37

He's doing other things, so that's why he sounds distracted.

SPEAKER_04 0:39

Harrison. Multitasking. Nothing.

SPEAKER_01 0:43

Welcome to the Vet Practice Playbook, brought to you by Vet Practice Pro, where we talk all things veterinary leadership, management, clinic ownership, and more. I'm Dr. Emily King, joined by Kayla and John Biddles. Yo. Woo woo woo. And today we're going to be talking about some financial things like KPIs. Because if you're not tracking this, then you're guessing.

SPEAKER_04 1:04

What's KPI stand for? We might have listeners who don't even know what KPI stands for.

SPEAKER_01 1:13

I'm laughing because I'm like uh KPI. Key performance indicators.

SPEAKER_04 1:20

Like, what's the K for you?

SPEAKER_01 1:21

My laughing was because I'm like, I can't remember. I mean, let me think about it for a second. What do we talk about? Knowledge, no, not knowledge. Um, so it's key. Key performance indicators. It is. So I was not laughing at those people who may not know as much as I was laughing at myself. Okay. John, tell everybody about vetpracticepro.com.

Dangers of Financial Guesswork

SPEAKER_04 1:40

Hey, make sure you're checking us out at vetpracticepro.com where we bring you tools, conversations, and frameworks that help clinics move out of survival mode and into intentional leadership. Also, make sure you're on our email list, follow us on social media, and don't forget to join our circle community. Kayleigh, you want to talk about circle community today? Today?

SPEAKER_03 2:01

Sure. So Circle is an app you guys can download and join. It's just filled with veterinary professionals where you can ask questions. You can let us know if you had a good day, bad day, if you need a recommendation on a medication or anything like that. It's an open communication board essentially. So make sure to follow us on Circle.

SPEAKER_01 2:21

Check it out. And I think, Harrison, are we right in thinking you also post podcast stuff on there? Yep. Yep. So you can find the podcast clips there as well.

SPEAKER_04 2:29

Perfect.

SPEAKER_01 2:30

Okay, so on to the main play. Let me ask you a question. Do you feel busy in your clinic, but still wonder where's the money going? Where is that? Where's the money going? You're seeing patients all day, your team is working hard, your schedule's full, but at the end of the month, you're either stressed out about finances or just unsure if you're actually doing well. I spent many a day like that.

SPEAKER_06 2:52

Yep.

SPEAKER_01 2:52

Where I was like, Will we have enough money to make payroll?

SPEAKER_06 2:55

Yep.

SPEAKER_01 2:56

Will I be able to buy? No, I'm just kidding. That's what I was always asking. Richie was always saying, Do we have enough money to make payroll? You know what was interesting is that he would have down to the day, he'd be like, by day 18, business day 18, he'd be like, we'll have all the bills paid for. And then days, usually there was about 20 business days in a month because we weren't open on Saturdays and Sundays. So some months it was 21, some months it was 20, right? Am I remembering that right? And then so he would know by day 18, everything will be paid for. And so then 19, 20, 21, but on those months where you didn't because there was a holiday or whatever, COVID. COVID stress. Stress came into the picture for sure. Here's the truth if you're not tracking your numbers, you're guessing. Um, and you've got to measure it in order to um track it in order to get better at it. So, and in veterinary medicine, guessing leads to burnout, underpricing, and chaos. Today we're breaking down the key performance indicators, KPIs, that every veterinary clinic should be tracking, what they mean, and how to actually use them without overwhelming your team. Now, I will say the ones that we have listed are your basic ones. Yeah. Right? So, like if you're just starting out and you haven't put together any KPIs, these are good ones to start with. There are some more advanced KPIs that you can get into that can even give you more information. So I'm just putting that disclaimer out there that there are additional ones that are more um in-depth. Yep.

SPEAKER_04 4:29

Soal, meet, goal, repeat.

SPEAKER_01 4:33

Yeah. What is that famous saying about if you can't, I gotta look it up now, it's gonna bother me. Um quote about measuring, like, what is the quote? Quote about let me look it up. Measuring goals something. Oh, what gets me what what gets measured gets done. That's fair.

SPEAKER_02 4:59

Yep, I can see that.

SPEAKER_01 5:01

So if you can't measure it, you can't improve it. There you go.

SPEAKER_02 5:04

Yep.

SPEAKER_04 5:06

And just because you can measure it doesn't mean you should.

SPEAKER_01 5:08

So start measuring. Right. Some things aren't worth measuring. And it especially as you get more advanced with your KPIs and your dashboards, you'll ask, you might ask if you have a leadership team, one of your leaders to be measuring something, and it's a total freaking waste of time. Don't just because you want to know, doesn't mean that it's necessarily valuable for that person to be spending their time creating that information for you. So that's also a disclaimer.

SPEAKER_02 5:36

Yep. That's good.

Why do KPI's Matter?

SPEAKER_04 5:37

I just did that this last week. I had to put together this whole entire spreadsheet that I felt was not value added, busy work, but there was a leader. Someone above you who wanted it. And I literally, it was the end of a very long week where I'd worked it worked extra and I presented it. Here is the completed dumbest project you've ever asked me to do. Did you say that? I did out loud. Good for you. It came out, but this is the dumbest thing you've ever asked me to do. But it's done. It's done.

SPEAKER_01 6:07

Here you go. Just so you know, now you have the information. I hope you feel better.

SPEAKER_04 6:13

It wasn't quite like that. But deep down, John, that's exactly what it said.

SPEAKER_01 6:18

Oh my gosh. Okay, so why do KPIs matter? Michaela, what do you think?

SPEAKER_03 6:26

Um, well, it gives you clarity and you know if you're really busy, if you're doing well, if you're not doing well, um, just I mean, without it's like I always think if you're not tracking your finances at home, how do you know how much money you have?

SPEAKER_01 6:41

Yeah, it's that veterinary gut feeling.

SPEAKER_03 6:42

Yeah.

SPEAKER_01 6:43

Where you're like, I'm doing great.

SPEAKER_03 6:45

Yeah, and then you look at it and you're like, Oh, I'm not doing so well, right?

SPEAKER_01 6:48

They they joke about that with veterinarians thinking about their compliance numbers, like um, and having the the feeling of like every client's on heartworm and flea prevention. And then they go and check, and their compliance is like 10%. Yep. So 10% of their clients have their pets on.

SPEAKER_03 7:03

Yeah. And I think usually when you start running reports, you think they're gonna be much better than what they are.

SPEAKER_01 7:09

Yeah, exactly. Oh gosh. Um so I think one of the things that we'll see is that clinic owners or managers making decisions based on feelings, like you were just mentioning. So, you know, we're really busy, so we must be doing well. Meanwhile, you're spending all the money, or it's just falling away somewhere and you don't know where it's going to. Clients are pushing back, so we can't raise prices, or my team is overwhelmed, so we need to hire. That's a big one. Yep. Hiring, like throwing people at the problem.

SPEAKER_02 7:38

Yep.

KPI #1 | Average Transaction Charge

SPEAKER_04 7:39

I think that your KPIs, you're constantly equipping your team. And I and I picture just like a because I'm a dude, like a fighter jet. Like you're constantly loading that thing up with ammunition, checking it, making sure it's ready. But if you don't have KPIs, what is your team ready for? What are you shooting for? What are you what are you after? You have to have measurements of success to celebrate wins or focus areas of downfall. And they can't just be, you know, willy-nilly. They have to be balanced and targeted based on what you're trying to achieve. But before you set these KPIs, you have to define what health looks like. You know, you're worried about, hey, am I am I doing great? What is success? Am I successful? Are we doing well? Well, first of all, what's that look like and how do we get there? And then second of all, how do we set goals around it that are just absolute, without a doubt, indicators of clear information that yes or no? You gotta turn your success into as much of a yes or no question, or you need to be able to speak to it with the information you have to your team. Um because these people, they're gonna continue to allow you to invest in them as your team as you continue to destroy targets and continue to tell them that yes, the work you're doing, we're hitting it work so well that we get to increase. So, uh in a nutshell, I think that if you're gonna spend time equipping your teams with tools like Vet Practice Pro, you also need to give them a target to shoot for.

SPEAKER_01 9:08

Okay, I like it. So KPIs turn emotion into information, they help you answer those questions like are we healthy, are we healthy financially? Are we practicing good medicine? Are we using our time effectively? And most importantly, where do we actually need to improve? Yep. Okay, so the core KPIs with examples here. Let's break them down. Um again, we said you don't need 20, start with maybe four, um, and um and then go from there. So, and these are ones that a lot of people probably have heard, but so the average transaction charge, ATC, yep, average client transaction, or this is how some people will refer to it. So the average amount each client spends per visit.

SPEAKER_03 9:53

Yep. It's good. Yep, because usually if that's low, if you run it and it's low, you're you're not charging enough. Um, you're not recommending full care, probably. Um clients aren't saying yes. And so again, if it's low, trying to figure out why is it low. Um so for example, if you have two clinics, um they see 20 appointments a day. Um one clinic, their average is$100, so you're making$2,000 a day. Um if you just increase it to$160, that's$3,200 a day. So again, that is the same workload, but it's a very different outcome.

KPI #2 | Transaction Count (Visits Per Day)

SPEAKER_01 10:30

Yeah, absolutely. And when you had mentioned you're not recommending full care as like if your ACT is low or ATC, depending on what you're calling it, it yes, it could mean you're undercharging, but it can mean that not everybody has a standard way of providing care. Right. So, like the larger your organization becomes, it might be hard to be able to pick out this doctor's practicing this way or this way or this way or this way or this way. The team is recommending all these different things instead of it being a global clinic-wide approach. So the larger it gets, the harder it is to ensure that that's happening. Right. And so then this watching this can give you a clue. Oh my gosh, this doctor has the lowest, you know, is it the type of, so for instance, we have a doctor seeing exotics. That's a low average client transaction typically. So maybe that's you know a factor for her. If she wasn't, if she was doing the same patient population as everybody else, we'd be like, what's going on? Why are your clients what's happening in your appointments that's different? So, you know, the care is not then standardized as a strong word, but it's not consistent. The recommendations aren't consistent then across the board. It gives you a clue as to maybe whether or not that's happening.

SPEAKER_03 11:43

Right. Yeah, exactly. And I think too, people are always, you know, we need to add more appointments, add more appointments, add more appointments to make more money. When really you could just increase that average transaction just by a little bit to make more money.

SPEAKER_01 11:56

Right. Work smarter.

SPEAKER_03 11:58

Not harder.

SPEAKER_01 11:59

Absolutely. All right, number two, transaction count, which is the number of visits per day. So it's how many appointments you're actually seeing. Um, and you know, this is a um we kind of call it like a um an analysis by doctor from the perspective of like how full is the doctor. So like if they're able to see 14 appointments, are they seeing 14 appointments? Are so are they at 100% capacity or are they over 100% capacity? So watching the number of appointments that a doctor sees, if we're talking about doctor slots and an appointment schedule, then that allows you to know how busy the doctor is. Then two, when do you need to add doctors? Because now all your doctors that are over 100% probably need to be adding a doctor, you know. Um, and so seeing those appointments and the number of appointments is really helpful, as well as then, you know, are you constantly seeing work-ins? Are you have gaps? You know?

SPEAKER_02 12:57

I agree.

SPEAKER_01 13:00

So being busy doesn't always mean being productive, is one of the things that that can help point out for you.

SPEAKER_04 13:07

I think when we're talking about these KPIs, it's always to go look good to look through the lens of what if it wasn't there? You know, for us, it's very easy to speak to. This is what it's like when they are there. But if they're not, if you're not, then what happens is you have one person working at 140% capacity, another person working at 50% capacity, basing their compensate compensation the same over overall productivity, you're not doing well with your staff, with your employees. You have the hardworking picking up for the slackers, and this will expose all of that and help you put an even playing field on your top producers.

SPEAKER_01 13:48

Yeah, and keep it and it will keep resentment from forming. Yeah. You know, like you were talking about, like if people are really working hard and they're like, Why can't you see the working? Why are we seeing the working again? You know, and then and some teams are okay with that, the way our system is set up, you know, because the doctor enjoys that and the team enjoys it, you know. And then other places they're like, I'm the one who's always doing, always picking up the slack.

KPI #3 | Revenue Per Doctor

SPEAKER_04 14:12

Yep. Or you you put yourself in a position where you're the leader at a staff meeting, whether you're the clinic owner or whatever, where you're saying, hey, we need to increase productivity in front of people that are running 160% and some that are running 40. And eventually that frustration from your top performer is going to come back on you as a leader for allowing that inconsistency. Yes, it will start, they'll be frustrated with the low performer. But if you don't manage it and you don't level it out, and you sit out there and you say a blanket statement of we have to hit this KPI, next thing you know, you've lost trust. Yeah. You're the bad guy, and the frustrations at you. So be sure you're using these tools to your advantage as a leader to help hold people accountable.

SPEAKER_01 14:58

I like that. That's a really good point. Okay, number four. Kayla, do you want to do number four?

SPEAKER_03 15:05

Did we do number three?

SPEAKER_01 15:06

Did we do number three? Oh no, we didn't do number three. Sorry, do number three.

SPEAKER_03 15:12

So, really just how much the doctor is producing, which you kind of already talked about, just making sure we um, you know, don't have inconsistencies between doctors, um, scheduling, staffing, making smart decisions on how to schedule all that, and then highlight training opportunities. Um, so it's not really about shaming the doctors, but really how to support them and um make them be able to do their best.

SPEAKER_01 15:33

And there's a a second KPI that you can move past this revenue per doctor, which is like a service mix KPI. So it shows you where the money's coming from for that doctor in their appointments. So 20% of their, you know, uh transaction is product and 80% is, you know, service or vice, you know, whatever it might be. So you can start to see where there might be some issues with a veterinarian from the standpoint of feeling confident to make recommendations or perform services, you know, um, or not feeling like they don't have time to do that, right? So, you know, okay, then what's happening in the schedule that they don't have time to talk to the client about these are the recommendations. So that service mix is like another level up as far as like a KPI that you can use.

SPEAKER_06 16:20

Yeah, that's good.

SPEAKER_04 16:20

And I think it's good not to silo your KPIs, they need to work intertwined to an extent of sure you might have the veterinarian that sees 10 more clients a day than everybody else, but are they doing it right? Are they really providing look at their customer satisfaction scores if that's a target that you're looking at? Or look at the amount of revenue they're generating. Are they not spending enough time, like you said, referring the right care because they're just plowing through appointments? Just because they're smashing one KPI does not mean that's the total reflection of their performance. And I really think that you can use in this tool the information that'll provide some of your best people that are working towards a KPI, use those to use those people to teach other people that might be lacking. You don't have to do it all as a leader. So I know I'm coming at KPIs, not so much something you should watch to determine success, but really a tool in your tool belt to help coach and your performance on your team.

KPI #4 | Compliance Rates

SPEAKER_01 17:20

Yeah, well, and then it takes the feeling out of it, it's measured. This isn't about you as a this is uh actual measurement, you know. I'll never forget when one of the associate veterinarians was like, I feel like I'm not producing something, something, and it was just a feeling. Yeah, we went and pulled the numbers and we're like, You're fine. Yep, yeah. Like it's just a feeling that you're having for whatever reason. You were on vacation two weeks ago, and this person laughs at herself because she's known for this. And so, you know, she'll be like, It's probably just a feeling. And I was like, Well, let's look at the numbers, then you'll know, and you won't have to have the feeling anymore, you know. So they are great for that. Um again, removing the emotion out of the scenario.

SPEAKER_03 17:57

Right.

SPEAKER_01 17:59

Okay, number four, compliance rates.

SPEAKER_03 18:01

Yep.

KPI #5 | Labor Costs Percentage

SPEAKER_01 18:02

So this is big for both patient care and revenue. So we're talking about like heartworm prevention, flea and tick, dental, um uh your injectable products that require repeat, you know, use. So um laborella, side of point potentially, you know, like these these products that have to be continually used. So if clients aren't saying yes, it's usually not about money, it's about understanding why they need to continue the treatment, communication that like I can't tell you that how many people have been like, oh, I wish I I didn't know. Like I've used Pro Heart 6, say before Pro Heart 12 came on the, you know, and it's like, oh, I didn't realize that I needed to give that year round. Or the oral product was when they really said that. They'd be like, oh, I need to keep giving that after their puppy visit. You do we're in the winter, yeah. So, you know, uh people don't know what they don't know. Yep. Um, and so this KPI tells you how well your team is educating clients. Yeah. Okay, five, labor cost percentage. Kayla, do you want to talk about this? Sure.

SPEAKER_03 19:06

So this is how much of your revenue goes to paying your team, which is always a fun topic. We need rich ear. Um, yes, the typical target is between 40 to 50 percent. Again, varies whatever clinic you work at could be different. Um, so why this matter? So if it's too high, obviously you're overstaffed or underpricing. Um, if you're too low, your team is overworked and probably burning out. Um so this KPI helps balance profitability and your team culture and well-being. So it's a really great one.

SPEAKER_01 19:40

And it's the largest expense.

SPEAKER_03 19:42

Yeah, that's why like it's I mean, to a practice, you have to pay attention to it.

SPEAKER_04 19:46

Every time I teach human resources, I'm like, we teach this because humans are your greatest resource. You spend the most money on it, you can't do it without them, and they are your biggest investment.

SPEAKER_01 19:56

Yeah, it's crazy.

Common Mistakes to Avoid

SPEAKER_04 19:58

And I I do think though, this KPI, you have to watch, like Kayla was talking about, you know, if it's too low, if it's too high. Understanding there's gonna be seasons in your clinic where you need to staff up, where you are increasing, like you got a remodel coming, or you're moving into a different facility, so you do need to staff up for that. Or uh Richie was talking about it on a past episode where we where you guys have it's almost like what is it, you use cadres or you know, a group where you hire a doctor, you hire the assistant, you hire the that tech, that team. And sometimes you may have that team on board being trained before they're being productive, before they're contributing to the productivity and the revenue, and understand that you may have some months where you fall back, but for the most part, you should follow this pretty pretty close to stay healthy.

SPEAKER_01 20:47

Yep, I agree. What do you guys think are some common mistakes that people make when they start with the KPIs?

SPEAKER_03 20:54

Um, trying to do too many at once.

SPEAKER_01 20:56

Yeah, tracking too many numbers. I would say that would be like because otherwise it's just noise, then it feels like noise. And then I I would say also, like, don't look at them like some you could so like we always did a weekly dashboard, but they can look that can look really noisy if you're not careful. If you're looking at something like payroll, you might need to be looking at it every two weeks, and then again at the end of the month, so you and you need to look at it so you can make adjustments, but you're you don't want to be looking at it like every day, you know, like it's just too noisy.

SPEAKER_04 21:26

So I think another big mistake is using when communicating with your teams, do not use the KPI as a why. It is never a why. We are doing this, we're asking you to do this so that we can hit a target. No, why is that the target? How did we get to the target? The KPI in and of itself is not the why, it's just a measuring tool, just a measuring tool, and you have to connect your teams to whys because they will not they will not work for too long or sell out themselves both personally and spiritually to that job. Because you just set a target and said shoot.

SPEAKER_01 22:04

Yeah.

SPEAKER_03 22:04

What I think too, making sure your team knows the targets, knows the goals. You can celebrate the wins. And if you're not hitting a wind, okay, what can we do to get to the win? Um just making sure the team's included in everything.

SPEAKER_01 22:19

Absolutely. Okay, so where do people start, do you think? What's the plan? Give them a plan, Kayla.

SPEAKER_03 22:26

Um, I would pick. I mean, you at least need to start with something. And to really, it's probably the average client transaction or the average um the ATC, whatever, you know, whatever you guys use. Um and again, to me, also staffing, if you're not measuring your staff percentages, is probably an easy one to start with, too. So track, like you said, track them weekly, track them monthly, um, and just don't get overwhelmed with anything. And just one step at a time, and what small improvement can you start with?

SPEAKER_01 22:54

Absolutely. Because small, consistent changes are what transform clinics.

SPEAKER_02 22:59

Yep.

SPEAKER_01 22:59

Not massive overhauls. You got it. Consistent, consistent, consistent. It's a word that we talk about a lot because consistency is the thing that leads to success. So and remember, a well-run clinic isn't just busy, it's intentional, it's efficient, and it's built on clarity, not guesswork. Yep. If you're not tracking your numbers, you're guessing. And your clinic and your team deserve better than that. So pick three, pick four. Not more than five.

SPEAKER_02 23:27

All right. Well, that's it for today's episode.

SPEAKER_01 23:29

Oh, wait, before you do the outro, I should mention that if KPIs are something that you're interested in, Richie and I are going to do a two-hour worksheet on two-hour worksheet, two-hour workshop on KPIs and building them and then also building a dashboard that then you can use to plug these numbers in so you can track them and print it and talk about it with your team or your leadership group.

SPEAKER_03 23:51

Yes, it can be very overwhelming to start from scratch with reports. So again, reach out to us. We're here to help you.

SPEAKER_04 23:56

We're just a bunch of tools creating tools.

SPEAKER_00 24:00

That's right, exactly.

SPEAKER_02 24:02

All right, so that's it for today's episode of the Vet Practice Playbook.

SPEAKER_03 24:06

We hope you got a few plays to use for yourself or for your clinic. If you enjoyed this conversation, share it with others, leave us a review, and check out vetpracticepro.com for tools and courses that can take your clinic to the next level. We'll see you guys next week.

SPEAKER_04 24:19

Thank you. Bye.

SPEAKER_00 24:21

Okay, there you go, Harrison. Two episodes. I love those 29 episodes. We're on something easier. We're on to something. We're on to something, baby. Amazing. That was a perfect idea. How do we generate?