November 2014 

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Phone (908) 823-4607- info@veterinarybusinessadvisors.com


Importance of Selective Inventory Control


Keeping enough inventory is important to a well-run practice. Doing so ensures that you'll have what you need when you need it - and that no patient will suffer because of a lack of a key item. But, inventory represents a large capital investment and cost to your practice, both in getting it on the shelf and then keeping it there. Inventory expense averages 20% of gross revenue, and can become even higher if inventory management is a low priority. Costs include:
  • ordering costs
  • holding costs
  • shrink (loss) costs

The solution? Selective inventory control procedures.

 

This may not be the most appealing idea to staff, as they generally have little time to manage inventory - and, let's face it - it's less interesting than many/most other things that occur in the practice. However, inventory is the second most valuable asset in most practices, so finding a way to manage it efficiently and effectively makes good business sense - and should result in an increase in your practice's profits.

 

Here's more.

 

Benefits of selective inventory control

 

The more well managed your inventory, the less cost will be associated with it, freeing up more capital to be put towards your retained earnings - and reinvested in your practice. Moreover, selective inventory control allows you to prioritize. In other words, this system permits you to spend your limited inventory management resources on the items that will generate the most revenue for your practice. Plus, it creates tight controls to minimize losses on the most valuable items in you inventory. To make those determinations, we recommend ABC inventory analysis.

 

 To read more about ABC Inventory click here. 

The end of the year is a perfect time to conduct your Human Resource Compliance Audit.

What is a Human Resource Compliance Audit?

 

Most businesses routinely perform annual audits of their financial policies, practices and recordkeeping to make sure there are no irregularities in their financial systems. Whether conducted by employees within the organization or by outside consultants, these comprehensive financial reviews help veterinary practices assess their financial statements with a reasonable degree of assurance that the businesses are performing within budget and consistent with financial projections.

 

Comparable to a financial audit, a Human Resource ("HR") Compliance Audit is a diagnostic tool for practices to assess the health and compliance of their personnel human resources' policies, procedures and protocols. Whether a practice employs 5 or 500 employees, this comprehensive review can help owners and managers avoid the significant legal and/or financial penalties for not complying with the vast array of complicated employment laws while ensuring their procedures are adequate and effective. In essence, an HR Compliance Audit involves identifying issues and finding solutions to problems before they become unmanageable or lead to litigation. It is an opportunity to assess what a practice is doing right, as well as how things might be done differently, more efficiently or at a reduced cost.

 

Why is an HR Compliance Audit Necessary?

 

Today, practices face workforce challenges, which are unimagined, unaddressed, and immeasurably complex. Even the most forward-thinking and well-intentioned practices are bound to misstep and inadvertently violate certain federal, state and/or local statutes. Despite costly and time-consuming efforts by practices to protect themselves from employee claims of unfair treatment, employees will always seek remedies for actions they perceive to be unjust. Failure to properly comply with the plethora of laws pertaining to each of these issues can result in significant financial, civil, and in some cases, criminal penalties (For example, any employer that fails to correct the hours of a nonexempt employee who it knows is working over 40 hours per week risks losing a claim filed under the FLSA for unpaid overtime. De minimis amounts of time to read or text mail after hours may not be the grist of a legitimate overtime claim. But conducting regular and routine work after hours by a non-exempt employee using a hand-held device might give rise to employer exposure to overtime claims).

 

Further exacerbating the potential for non-compliance is that each state has its own employment laws that may or may not be consistent with the federal laws from which they were crafted. There are scores of state laws that provide employee rights that are slightly different from those afforded through federal statutes. For example, federal law does not prohibit sexual orientation discrimination in the workplace, while many states do. Finally, legislation granting additional employee rights seems to be popping up on a daily basis. As a result, the human resources procedures established today may not be legally compliant tomorrow.

 

An effective human resource compliance audit will identify, assess and analyze those areas that may give a practice 'legal' headaches, if challenged in a court of law or administrative agency. Often performed by a knowledgeable human resource specialist or an attorney, a compliance audit of the human resources functions should be mandatory for every practice that wishes to successfully defend its employment practices and policies. Courts are more likely to respond favorably towards practices that have taken "good faith efforts" to establish legally compliant HR procedures and protocols. An HR Compliance Audit can also help owners and managers accomplish the following best practices:

  • Identify employment practices and policies that are missing, outdated, or in need of revision.
  • Develop a framework of analysis within which employee performance issues can be easily identified and prioritized.
  • Assess and measure expected vs. actual performance to create the necessary action plans to eliminate any performance gaps.
If you would like VBA help you to conduct your HR Compliance Audit Email us today!

 

In This Issue

 

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  2015 Human Resources Calendar  
 
Is it really here in just the blink of an eye? We have updated our calendar with additional events that you should be addressing in 2015 regarding Human Resources related activities. Please take the time to at least scan the list and pencil in on your appointment book or mark on your outlook calendar or for you techies with the smart phones or tablets, maybe there's an app for that - so that you are proactively prepared to administer or address each event in a timely manner. Our list is based on a calendar year and your Practice's fiscal year running concurrently. But any listed activity below, can be scheduled in the month that you need to begin the activity, so that you have enough planned lead time to get the event executed successfully according to your own schedule. Not all activities may pertain to your Practice (some depend on the number of employees working for you) and the list is comprehensive but not all inclusive - it is meant to get you thinking about Human Resources related activities and functions for the upcoming year. And as a reminder, some of the new HR related activities that are listed due to their prescribed implementation dates may change as we get closer to the deadline dates because sometimes legislative acts may get challenged, postponed or shelved. As we hear of updates, we will post them in our newsletter.

 

Click here to read full article.

 

 
 Copyright 2014
2014 - Veterinary Business Advisors, Inc.
 

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