Leadership and Your Team

"The first responsibility of a leader is to define reality." Max DePree

A team is two or more individuals who interact dynamically, interdependently and adaptively to achieve specified, shared and valued objectives.

As a leader, what must you do to foster the healthy development of your Healthcare team?

Mmm - Make Meetings Marvelous!

The meetings (or beatings) will continue until morale improves. If the entire team rolls their eyes in frustration every time the word “meeting” is spoken, here are 7 things you can do to make your meetings work:

1. Do You Have To? Avoid a meeting if the same information could be covered in a memo, e-mail or brief report.
2. What’s the Point? List the objectives of the meeting and post a sheet in the practice where team members can list topics that they feel are important to discuss.
3. Let the Team Know the Plan. Create an agenda that includes a one-sentence description of the meeting objectives, a list of the topics to be covered and a list stating who will address each topic for how long. Follow the agenda closely during the meeting.
4. Spread It Around. Have team members participate by gathering information, reporting on projects, sharing experiences or leading the discussion. Make sure that you rotate around so that everyone gets a chance to participate.
5. Don’t Just Talk About It. Don't finish any discussion in the meeting without deciding how to act on it. If someone brings up a topic that is not on the agenda, you can put it on the agenda for next time so you don’t get sidetracked.
6. Keep It Going. Review your meeting from the notes that you kept (oh, and distribute a copy of the notes to the team). Be sure to assess how well you did and what you could do better at the next meeting.
7. Meetings are Important. Consider video taping the meeting for anyone who was unable to attend.

Consider a Computerized Time Clock and Payroll Service

I have recently had the opportunity to work with a couple of practices that still manually prepare their company’s payroll as well as use manual time clock systems. My strong recommendation is for all practices to convert to computerized time clock systems and to hire a payroll service to oversee the maintenance of your practice’s payroll. You will save time and money by doing so. The amount of time that it takes to calculate and prepare payroll on a bi-weekly basis will decrease significantly by simply implementing these two steps.

A computerized time clock system can often be set up through your practice’s management software. However, if your management software does not offer this option, payroll services will provide you with computerized time clock resources. Computerized time clocks allow management to monitor overtime, determine who is clocked in or out or address the team member that is on the clock when they shouldn’t be. Some systems give you the option of sending individual messages to the team members as they clock in or out or even better the ability to send broadcast messages to the entire team. Having the luxury of using a computerized time clock system to alert team members of upcoming events can be right at your finger tips. This system not only keeps you abreast of the numbers, but it can enhance communication among your team members. Implementing this one simple function will make life so much easier for you and your team. The healthcare team will be able to clock in and out at any computer terminal versus waiting in line and they can also monitor their hours to prevent unnecessary overtime.

As many of you know, payroll and inventory are the two primary expenses that a practice manager can control. These two categories can comprise nearly 41% of your operating expenses. Utilizing the time clock software and a payroll service will assist you in closely monitoring and tracking your payroll expenses. You will no longer have to manually prepare checks and calculate payroll taxes with a payroll service - they will do what they do best and deliver the checks and payroll journals right to your doorstep. You will be able to closely assess payroll expenses on a bi-weekly or monthly basis and the payroll summaries they provide will simplify your budgeting efforts. Remember that payroll expenses should not exceed 21% of your gross revenue and the breakdown per department should be as follows: Receptionists 6-8%, Technicians/Assistants 9-10% and Kennel Attendants 3%
Administrative staff is not included in the 21%.

Payroll service expenses are a nominal fee these days when you compare the benefits. So, if you are manually preparing payroll and/or having your team members manually clock in/out, make it a top priority to update these practices and give yourself additional time to manage!

How Financially Healthy is your Practice?

It’s that time of year to reflect on the prior year performance of your hospital. You just met with your accountant and they handed you your year end financial statement and tax return. Maybe it turned out to be a good year because you didn’t have to write any additional checks to the government when you filed your returns. It was “sign here” and off they went.

So as you're sitting with your accountant, your first question is “so how did I do for the year?” The accountant turns with a smile and says “pretty darn good.” “No checks to write to the government and, not only that, but you made $10,000 more than last year.” So now that you got the difficult stuff out of the way, the conversation turns to basketball and who will win the NCAA championship this year.

Any idea how you really did and what the financial performance of the hospital was? Without a complete analytical review, you will never know. What should you look for? The issue with most hospitals is that the owner’s pay bears no relationship to actual service to the practice and is more related to what the practice can afford to pay. Sometimes pay is computed for tax reasons. This creates distortion with regard to the measure of financial performance.

If you are a general small animal hospital and really interested in hospital performance, reformat the way you pay yourself so the amount you show as compensation for services to the practice is based upon 22% of your production plus a 1 to 3 percent management fee and let everything else fall to the bottom line. If you are a specialist, make it 25% of production. What’s left over is an indication of the return on investment (ROI) and has some correlation to the hospital's value. The number multiplied times five will provide you some sense of the hospital’s worth. What’s even better is to look at the result comparatively from year to year. This will give you an indication of whether the hospital is improving or declining in value. A format change to your financial statements will allow you to see this easily. Benchmarked, the number should approximate 12 to 15 percent of sales. This presentation can be a real eye opener and let you focus on how the practice is really doing related to both income earned and what it’s worth.

An indication of a practice’s strong financial position is also reflected in its Balance Sheet. How much cash does the practice retain? How much are its outstanding bills (accounts payable)? How much is the equity? The more practice equity, the stronger the financial health of the practice. The amount of cash on hand is referred to as a working capital balance and usually relates to enough to pay 30 days of bills, including payroll. Any more than that would be considered excess and should be invested outside of the practice. Any less may mean the practice is in a weak financial position. Accounts payable are directly correlated to inventory. Accounts payable should not be more than the inventory balance. If it is, you could assume the practice is in a weakened financial condition.

My past experience tells me this: It is a whole lot easier to get into debt than it is to get out. Accumulating significant losses and debt can happen very quickly but can take years to get out of. The only way to clear debt from a practice balance sheet is by generating a profit and leaving it within the practice.

The bottom line is, the more you understand about your practice finances, not only will you be successful as a practicing veterinarian, you will be a financially successful practicing veterinarian. May you continue to have a strong passion for your profession but be financially strong as well.

QuickBooks and the New Windows Vista

Many of you might realize that Microsoft has recently released a new operating system called Windows Vista. If you are running QuickBooks on the machine that will run Windows Vista, beware that not all versions of QuickBooks are compatible with this operating system.

For you, there may be reasons to delay the upgrade for now. Generally, older versions of QuickBooks do not support Windows Vista.

Intuit believes QuickBooks 2007 is the best option if you are upgrading to Windows Vista. However, Intuit has found that clients can try running QuickBooks 2004 to 2006 on Windows Vista if two conditions are met initially. Intuit's guidance for running QuickBooks 2004 through 2006 in Windows Vista now reads as follows:

• "You must be set up as a Windows Administrator and run QuickBooks in Windows XP-Compatibility Mode in order for it to work properly on a Windows Vista computer. Even then some of the functionality of 2006 and earlier QuickBooks software may be adversely affected including QuickBooks payroll."