featuring Dustin Pulliam, DVM, MBA | Blue Heron Consulting

Financial statements tell the story of your practice’s health, yet many veterinary professionals find them confusing or overwhelming. In the recent Intro to Veterinary Financial Statements webinar, Dr. Dustin Pulliam, DVM, MBA, breaks down the essentials, helping practice owners use their numbers as tools for growth.

When you look at your practice’s financials, do the numbers tell you a clear story—or do they feel like a jumble of data that’s hard to interpret? Understanding your financial statements isn’t just about accounting; it’s about learning to read the health report of your business so you can make decisions with confidence.

Profit Isn’t a Dirty Word

As veterinarians, many of us entered this field to help animals, not to focus on profits. But here’s the truth: profit is the fuel that allows your practice to thrive. It’s not good or bad—it’s neutral. What you do with it is what matters. Profit gives you the ability to reinvest in your team, your equipment, and the care you provide. Without it, you’re running on empty.

The Two Reports You Can’t Ignore

To understand your numbers, you only need to focus on two key financial statements:

  • Your Profit & Loss (P&L) Statement – Think of this as your practice’s “overall health scan.” It summarizes your revenue, expenses, and profit for a specific period—usually every four weeks—so you can track how well you’re performing.

  • Your Balance Sheet – This shows what you own (assets), what you owe (liabilities), and your equity at a single point in time. It’s the snapshot that tells you where you stand financially right now.

Together, these reports form the backbone of good decision-making.

What Healthy Numbers Look Like

Strong practices share a similar financial structure. Picture your expenses and profit as a pie divided into five equal slices:

  • 20% Cost of Goods Sold (COGS) – The medications, supplies, and products you use every day.

  • 20% DVM Labor – The costs associated with your doctors’ compensation.

  • 20% Para Staff Labor – Your technicians, assistants, and support staff.

  • 20% Other Expenses – Everything from utilities to marketing.

  • 20% Profit – What’s left to reinvest or take home.

When these numbers are in balance, your practice has strong “bones” to build on.

Where Revenue Really Comes From

Revenue isn’t a mystery. It’s driven by two things: your clinical and professional skills. These determine how many patients you see and how much you generate per visit—the average doctor transaction (ADT). The more intentional you are about these drivers, the stronger your revenue becomes.

Why Costs Get Away From You

Expenses can creep up in small ways that add up fast: discounts that aren’t tracked, missed charges, or payroll that’s out of proportion to revenue. Keeping costs in check isn’t about cutting corners; it’s about being disciplined. For example:

  • Keep COGS below 20%.

  • Maintain payroll efficiency under 40%.

  • Limit discounts and adjustments to under 3%.

These targets give you guardrails to keep your practice on track.

Why So Many Practices Struggle

The AVMA reports that 60% of veterinary practices operate with little to no profit. Often, this isn’t because of lack of effort—it’s because owners don’t have a clear picture of where their money is going. Without understanding the story your numbers tell, you’re making decisions in the dark.

Turning Your Numbers Into a Roadmap

Once you understand your P&L and balance sheet, you can use them to guide your next steps. Compare your KPIs to industry benchmarks. Ask yourself:

  • Are you hitting targets for COGS, labor, and expenses?

  • Is revenue growing, and is profit keeping pace?

  • What changes could make the biggest impact?

These insights help you move from reacting to proactively shaping your practice’s future.

Your Numbers Are a Story—Learn to Read It

Every number on your financial statement has meaning. When you know how to interpret it, you gain the clarity to make better decisions for your team, your clients, and your business. You’re not just running a veterinary practice—you’re building something sustainable.

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