February 2016



Phone (908) 823-4607- [email protected]

Planning A Stress Free Road to Retirement

Succession planning. Two words when placed together make your heart race in light of the decades spent building this hospital from the ground. Who am I going to sell to? How am I going to sell? What do I value my practice at? When is a good time to sell? These questions can raise fear and anxiety in the mind of the owner in finding the appropriate buyer and may ultimately inhibit the practice owner from making the best business decision for the hospital. At the end of a veterinarian's career, their hospital is the culmination of their perseverance and life-long hard work; it's only natural to want to protect what has taken them years to build. Creating a succession plan can help alleviate some of the stress associated with the uncertainty of the hospital's future. 

How Does Your Practice Handle Employee Discounts[i]?

It is fair to say most employees at veterinary practices have pets.  Unsurprisingly, it is quite common for employers to offer discounts on services rendered to their employees as fringe benefits.  However, there are a few caveats a practice should be aware of or their discounts may end up costing a practice more than anticipated.  Discounts may result in taxable income to an employee if discounts do not meet a set of specified criteria.  This results in payroll taxes for both the employee and the employer, and thus it is important for both parties to pay attention to the details of employee discounts.  To avoid discounts resulting in taxable income and penalties to employers:
  •          Services provided to employees cannot be discounted greater than 20% of what is charged to clients. 
  •          Product sales cannot be discounted in excess of the average gross profit percentage from the previous year multiplied by the price charged to clients on the same products (the "at cost" price).
  •          Discounts must be offered to all of the employees, or a large enough group not to favor already highly compensated employees.
If any of these guidelines are exceeded, the discounts become taxable income and become included on W-2 forms at year-end.  Subsequently, payroll taxes must then be withheld from employees and matched by employers.  If the IRS did not impose these conditions, employers could exchange such benefits for lower wages, resulting in lower employee income taxes and subsequently lower payroll taxes. 

Unfortunately, the few instances where fringe benefits may be excluded from an employee's wages do not apply to veterinary practices either. 
  •          Services at no additional cost: While slow periods or down time may seem like "free time," the IRS views any loss of potential revenue as a cost.  Thus, time spent on an employee's animal could be spent on other patients and creating revenue.  The IRS also considers employee time spent providing services as additional costs regardless of whether they would be outside normal business hours or spent "idle." 
  •          De minimis: Use of the company copier or printer from time to time may be one of the small perks where it would be "unreasonable or administratively impractical" to keep track of costs.  Regrettably, neither veterinary service nor products fall in this category.
  •          Working condition benefits: These rules apply to property or services provided to employees to enable them to do their jobs.  Providing veterinary services or products do not fall under this class of exemption. 
The safest and simplest plan is to stick no more than 20% discounts on services and at least "at cost" on products purchased through the practice.  One could offer greater discounts, so long as they are included as taxable income on the employee's W2 forms and ensure proper payment of payroll taxes.  One should ensure that whatever discount policies are chosen, that they are clearly described in the employee manual and consistent with the practice's policies and philosophy. 

[i] Monheiser-List, Lorraine.  (2010).  Employee Discounts: Do You Know the Rules.  Practice Pulse, Veterinary Hospital Managers Association.  Printed September, 2010.  Retrieved from <> November, 11, 2010.

In This Issue
 Workplace Bullying

According to Bullying and Aggression in the Veterinary Profession, workplace bullying is common in medical fields, which includes veterinary practices. The author defines bulling as "any type of repetitive verbal or physical abuse that involves some type of power imbalance" (Lee 2013). She acknowledges that few veterinary-based bullying studies have been done, but cites disturbing statistics from those focusing on human medicine professionals:
  • 88% of clinical care providers have teammates who gossip or participate in a team-dividing clique
  • 55% work with someone who tries to look good at others' expense
  • 77% have coworkers who are condescending, insulting or rude
  • 52% work with someone who abuses authority, and will "pull rank, bully, threaten, or force their own point of view."[i]
Her ultimate conclusion to combat bullying in the veterinary field? Recognize it, don't tolerate it. In fact, stand up against it. Supervisors, which includes practice managers, must be the first line of defense, addressing destructive behaviors before they damage the practice.

First make sure you're not the culprit

Everyone can be blind to his or her own faults - and that includes veterinary practice managers. A 2014 survey conducted by the Workplace Bullying Institute discovered that 27 percent of workers have experience with abusive conduct at work, with supervisors serving as the main source of bullying behaviors. Even more dismaying, 72 percent say that their employers deny, discount, encourage, rationalize and/or defend bullying.

VBA's HR Toolkit!

There is no greater challenge in veterinary medicine today than recruiting, hiring, managing, and retaining talented people. Now you can find answers to your most pressing human resources questions and get a people management resources guide, all in one complete kit.

The Human Resources Tool Kit simplifies the overall approach to people management in your practice, by providing you with the most up-to-date and comprehensive tools, tips, and practical tactics to managing employees of all levels. 

The Human Resources Tool Kit offers simple, actionable strategies, plans, and forms you can start using right away - along with a wealth of information to guide you. The Kit provides a broad overview of various laws and regulations governing the employee/employer relationship. With an indexed listing of the most common workplace challenges and solutions, you'll learn "best practices"; in dealing with:
  • Recruitment/Hiring
  • Orientation
  • Employee Records
  • Compensation
  • Performance Management
  • Discipline/Termination
  • HR Compliance Audit
 Recruit, Retain, Realize, Relax! Order today.
 Copyright 2016
2016 - Veterinary Business Advisors, Inc.
 Like us on Facebook View our profile on LinkedIn Follow us on Twitter

Veterinary Business Advisors, Inc | 1 Washington Drive | Whitehouse Station | NJ | 08889