featuring Sarah McFadden-Palmer, DVM, MBA, CVA, MS | Blue Heron Consulting

In this webinar, Dr. Sarah McFadden-Palmer breaks down the fundamentals of veterinary finance—from understanding your profit and loss statement and balance sheet to organizing your chart of accounts and identifying key performance benchmarks. Whether you’re a practice owner, manager, or aspiring entrepreneur, this session will help you connect your financials to your long-term goals and better understand what drives the true value of a veterinary hospital.

The Two Key Financial Statements

Veterinary practices primarily use two financial statements:

  • Profit and Loss (P&L) Statement: Also known as an income statement, this shows your revenue (money in) and expenses (money out) over a period of time. Subtract expenses from revenue, and you get your net income—the leftover profit.

  • Balance Sheet: A snapshot of everything the business owns (assets) and owes (liabilities) at a point in time. Think of it as your clinic’s net worth.

While the P&L statement shows how money flows through your practice, the balance sheet helps you assess financial stability.

What Really Drives Practice Value?

When it comes to valuation, net income is often more telling than assets. While your equipment and building have tangible value, it’s your clinic’s ability to generate sustainable profit that truly boosts your hospital’s worth.

The Power of Organization

You can’t track what you don’t organize. One of the biggest mistakes practices make is using default (A-Z) accounting formats that bury critical data in hundreds of line items.

Instead, follow the AAHA Chart of Accounts, which organizes financials into clear categories. This makes it easier to track trends, spot problems, and make informed decisions.

Benchmarking Performance

For small animal practices, a typical full-time veterinarian generates $500,000 to $600,000 in annual revenue. Most practices should aim for a net income margin of at least 10–15%. That means if your clinic earns $1M, ideally $100K–$150K should remain as profit after all expenses.

Tracking and Goal-Setting Matter
Understanding your numbers is only the first step. Successful practices:

  • Review financials quarterly
  • Track key performance indicators (KPIs)
  • Set goals based on personal and professional values (e.g., CE budgets, team retreats, new equipment)

Even non-financial goals (like improving culture or work-life balance) often require financial planning. Use your numbers to support the vision you have for your practice.

The Bottom Line

Financial literacy empowers veterinary professionals to make smarter, more strategic decisions. By staying organized, benchmarking performance, and connecting financial outcomes to your goals, you can build a practice that’s not only profitable—but sustainable and fulfilling.

Need help understanding your clinic’s financials or planning for growth? Reach out to the Blue Heron Consulting team—we’re here to help.