Accounting for vet clinic owners: the numbers to read monthly

Many clinic owners know exactly how busy the clinic was this month, and have no idea whether it made money. The till was full, the waiting room was full, yet the bank balance did not move. This guide explains, without accounting jargon, the few numbers worth reading every month and what each one tells you.

Busy is not the same as profitable

Cash in the drawer tells you what clients paid today. It does not tell you:

what you still owe suppliers for the drugs you sold;
what clients still owe you;
what the stock on your shelves is worth;
what this month's rent, salaries and VAT will take.

That is why a clinic can feel successful and still run short of cash. The answer is not more spreadsheets. It is a small set of reports read regularly.

1. Profit and loss: did we make money?

The profit and loss statement (P&L) shows, for a period, what the clinic earned and what it cost to earn it.

Revenue: consults, surgery, grooming, boarding, products sold. Ideally split by type, so you can see what actually drives the business.
Cost of sales: what the drugs and products you sold cost you, plus lab fees.
Gross profit: revenue minus cost of sales.
Expenses: rent, salaries, utilities, marketing, card fees.
Net profit: what is left.

Read it every month, and always next to the month before and the same month last year. One month alone tells you little. A trend tells you a lot.

2. Gross margin by type of work

Not every part of a clinic earns the same. Services are mostly the team's time and skill. Product sales carry the cost of the product. Look at gross profit for each:

If product margin is thin, check purchase prices and how you price retail items.
If a service's margin is falling, its costs (drugs, consumables, lab fees) have probably risen faster than its price.

3. Cash: where is the money?

Profit and cash are different. A clinic can be profitable on paper while its cash is tied up in stock or unpaid invoices. Keep track of every place money sits:

each till drawer, counted at the end of every shift;
the safe;
each bank account and mobile wallet.

The cash flow statement then shows where cash came from and where it went: operations, buying equipment, owner withdrawals. If profit is good but cash keeps falling, the answer is usually in this report.

4. Who owes you, and whom you owe

Two lists matter here:

Receivables: clients with unpaid balances, sorted by how long they have been unpaid. A balance older than 60 days is much harder to collect than one from last week.
Payables: what you owe each supplier and when it is due. Paying on time protects your terms. Paying too early can leave you short.

Review both every week. A short call to a client with an old balance is easier than a write-off later.

5. Stock value

Stock is money on a shelf. The value of your stock at cost should be known, and it should match what your accounts say. If they do not match, something is leaking: unrecorded use, breakage, expiry or mistakes at delivery.

Why double-entry matters, even for a small clinic

Double-entry bookkeeping means every amount is recorded twice: where it came from and where it went. A sale paid by card increases revenue and increases the bank balance. A delivery on credit increases stock and increases what you owe the supplier.

You do not have to do it by hand, but it matters that your books work this way, for three reasons:

The books check themselves. Totals that do not balance reveal a mistake at once.
The balance sheet becomes possible. You can see what the clinic owns and owes on any day, not only what it earned.
Your accountant works faster. They read finished statements instead of rebuilding them from receipts.

A monthly routine that takes an hour

Close and reconcile the last till shift of the month.
Check the bank and wallet balances against the books.
Read the P&L against last month and last year.
Look at gross margin for services and products.
Review receivables older than 30 days and supplier payments due.
Note one thing to change next month.

How Petfolio handles it

In Petfolio, the clinic's own work posts to double-entry books as it happens: issued invoices, payments, deliveries, stock and till cash-ups. A chart of accounts is ready on day one, and the profit and loss, balance sheet, cash flow, trial balance and general ledger are always up to date, per branch too. Each currency keeps its own books, closed periods can be locked, and cash boxes, safes, banks and wallets each have their own balance. For your accountant, the statements and 91 reports are there to read, export and print.