Three types of veterinarians who should start a practice

Originally published in OVMA Focus Magazine September/October 2025

BY GREG TONER

In university, a mentor gave me some advice that I’ve shared freely since then: there’s no perfect time to have a baby or start a business. After living through having babies and starting a business, I’ve learned that she was right. Timing is far less important than acting. And you’ll inevitably figure out how to make it work.

I work with a lot of veterinarians, and I talk to five to 10 veterinarians from across Canada every day. Most are practice owners, but some are considering practice ownership and others have no interest in ownership.

I talk to many practice owners about their bad days, but there are generally more good days than bad. I generally find that there are three things that drive happiness in practice ownership for veterinarians, and it closely aligns with the three types of veterinarians who I think should seriously consider starting a practice.

1. The specialist

The specialist craves professional autonomy and clinical freedom. They love being able to provide the best possible care, and they take great joy in seeing complex cases and sharing that knowledge and expertise with others. Their practice is seen by other veterinarians as a resource they can lean on when things get hard. They love being the person the industry can turn to when the medicine gets complex. The specialist’s practice is spotless and operates with surgical precision. Although there’s less case volume than other practices, the specialty service their clients seek is highly valued.

2. The entrepreneur

The entrepreneur loves the business of veterinary medicine. They’re a veterinarian first and can jump into any part of their practice, and they take great satisfaction in building something bigger than themselves. As one part of their practice starts running consistently and operating profitably, they move on to the next step to keep growing. The entrepreneur’s practice is humming, everyone is in the right place, doing the right thing, and doing it on time. Their practice runs efficiently and provides predictable experiences for both their staff and clients.

3. The caretaker

The caretaker takes great pleasure in being a key member of their community. They have an enormous heart, and they take pride in looking after the pets in their community and being relied on to help when they’re in need. They provide a great place to work for their staff and view them as an extension of their family.

The caretaker’s practice is a warm place with friendly staff. Their approach to making their staff feel valued translates to staff making all their clients feel valued. This veterinarian has been an anchor to their community for over two decades and will continue to practice there as long as they can.

Practice ownership is just starting to evolve. Fewer clinics have chaotic schedules, and work is much more predictable for practice owners and their staff. The common thread for how the specialist, the entrepreneur and the caretaker approach practicing veterinary medicine is that the care for animals entering their practice is their north star - they want to make sure that they and their practice are the best that they can be.

Do you see some of yourself in one of these personas? Maybe practice ownership is for you. There will be hard days, but it will drive a sense of fulfillment that makes it all worth it.

Greg Toner, CPA, CA, TEP, CLU, is principal at VetCPA.

Reprinted from the Ontario Veterinary Medical Association’s Focus magazine www.ovma.org

The most practical way to improve practice efficiency

Originally published in OVMA Focus Magazine July/August 2025

BY GREG TONER

At a high level, there are three ways to maintain the viability of a veterinary practice when faced with increasing costs: raise your prices, see more clients or be more efficient.

Over the last year, pet owners have become increasingly price sensitive, so raising prices is a challenge. Seeing more clients isn’t always feasible— at the time of writing, we’re seeing a softening of demand for veterinary care in many markets across Canada.

So, what’s left? Be more efficient. How? With better standard operating procedures (SOPs) and actively work to make them better.

SOPs provide a roadmap for consistency, efficiency and quality, serving as the backbone for any successful practice. They outline the best-known methods to accomplish specific tasks, ensuring that all staff are aligned in their approach, and they work seamlessly together to support the rest of the team in providing care to the pets and pet owners that you’re serving.

SOPs bring consistency to practice operations. When everyone in the organization follows the same processes, the output is more predictable and reliable. This means that the practice owner, manager or veterinarians won’t get pulled into every case or issue with a mild case of ambiguity. Without standard procedures, performance can be highly variable, leading to mistakes, inefficiencies and customer dissatisfaction.

They also streamline workflows by eliminating guesswork. Employees know exactly what steps to follow, which reduces the time spent figuring out how to complete a task. This improved clarity increases productivity and allows practices to operate more efficiently. Additionally, when processes are standardized, it becomes easier to identify and eliminate bottlenecks, further boosting overall performance. Organizations that prioritize efficient procedures often find they can do more with fewer resources, improving their bottom line.

Standard operating procedures are valuable when it comes to training new employees. Clear, well-documented SOPs enable faster onboarding because new hires can quickly understand what’s expected of them. Rather than relying on ad-hoc explanations from colleagues, which may vary greatly, new employees have a consistent, reliable source of information to guide their actions. This helps reduce the learning curve and ensures that new team members integrate into the organization smoothly and effectively.

They also lay the foundation for continuous improvement initiatives. By documenting the current best way of doing things, businesses have a benchmark to measure against when seeking enhancements. SOPs can be reviewed and updated regularly based on new learnings, feedback and changing environments. This systematic approach to refinement ensures that the organization evolves intelligently rather than chaotically.

There are many headwinds in the veterinary industry, and practices need to adapt to remain viable businesses. The most feasible way to do that in the current climate is to improve efficiency. Review your SOPs, update those that are out of date, and make sure your whole team is on board. It might be uncomfortable at first, but when everyone knows what they’re supposed to do and what they can expect from the rest of the team, practices run smoother.

Greg Toner, CPA, CA, TEP, CLU, is principal at VetCPA.

Reprinted from the Ontario Veterinary Medical Association’s Focus magazine www.ovma.org

A better chart of accounts

Originally published in OVMA Focus Magazine March/April 2025

BY GREG TONER AND EMILY STEEVES

One of my friends, Peter, is an engineer, and he’s very detailed-oriented. Recently, he was shopping for a new car and put together one of the largest spreadsheets that I’ve ever seen. He used it to compare all the crossover SUVs that he and his wife were considering, evaluating more than 50 different factors for each car. It was impressive, but it was also easy to feel overwhelmed when looking at it, and it was hard for anyone but him to understand.

Peter’s spreadsheet is a little like a profit and loss statement assembled using the AAHA/VMG Chart of Accounts. Just as Peter’s spreadsheet has an overwhelming number of rows, the AAHA/VMG Chart of Accounts has an overwhelming (and arguably unnecessary) number of accounts, and an excessive level of granularity. While the chart is intended to cover a wide array of transactions and financial categories, the reality is that many veterinary practices find it unnecessarily complicated, creating confusion and inefficiencies in day-to-day financial management.

With so many accounts, consistency both within a practice and across practices is challenging, as revenue types may not be consistently categorized, making monthover-month and year-over-year comparisons difficult.

Overwhelming number of accounts

One of the most significant issues with the AAHA/VMG Chart of Accounts is the sheer number of accounts it contains. At first glance, the chart seems comprehensive and well organized, but when it’s put into practice, the number of categories can be overwhelming. For a typical veterinary practice, navigating many accounts can be cumbersome and time-consuming, as it forces business owners, bookkeepers and accountants to deal with excessive subcategories for relatively simple transactions.

While it’s useful to track major categories of expenses, the extreme level of granularity isn’t necessary for all practices. A small practice will find it more effective to group related expenses into broader categories without the need to separately account for every individual item. This high level of detail leads to increased administrative work, especially when some of these subcategories may only involve a handful of transactions over the course of a year (or none for the average practice in Ontario: How many have an MRI on site?). Additionally, the AHHA/VMG Chart of Accounts doesn’t mirror the system for categorization that the main veterinary supply distribution providers use, further creating additional administrative processes required to reflect the granularity in the AHHA/VMG Chart of Accounts.

Categories such as labour costs often demand intricate breakdowns of different types of staff compensation into 19 different accounts for compensation and five different categories for employee benefits. While these distinctions may be useful for larger practices with numerous employees, smaller practices may find that tracking every aspect of labour costs in such detail is excessive.

Instead, a more streamlined system could give practice owners the flexibility to track major categories without becoming bogged down by excessive detail that doesn’t add significant value to the overall financial picture.

Consistent classification is a challenge and leads to poor quality data for analysis and decision making.

Increased risk of error and inaccuracy

The high level of detail in the AAHA/VMG Chart of Accounts, while theoretically meant to provide a thorough financial picture, can increase the risk of errors and inaccuracies in bookkeeping. When there are so many accounts to manage, it becomes easier for mistakes to happen and expenses to be applied to the wrong accounts, especially if staff members aren’t trained to categorize each transaction correctly. Furthermore, the time spent maintaining many accounts diverts attention from more strategic financial management tasks.

For instance, a bookkeeper might inadvertently record a supply purchase under the wrong subaccount or forget to parse out the different segments of an expense, especially if they’re dealing with hundreds of accounts in the chart. As the number of accounts increases, so does the complexity of maintaining and reconciling them. This administrative overhead can be a significant drain on resources, particularly for smaller practices that cannot afford to dedicate substantial time or personnel to bookkeeping. For practices using third-party bookkeeping and accounting, the substantial level of additional adjustments, and admin time required to comply with the AHHA/VMG Chart of Accounts results in higher bookkeeping and accounting costs.

Inefficiencies in financial reporting

Why do practices maintain accounting records? The base use is to support sales tax and income tax filings. These two filings need very little detail and generally result in many of the AAHA/VMG accounts being rolled up to fit into the limited fields for reporting income and expenses. Even the simplest chart of accounts will support sales tax and income tax filings for Canadian practices.

The second major reason a practice maintains accounting records is to track and optimize performance. Tracking and optimizing performance can take various forms based on a practice’s lifecycle, but at any stage, a practice needs consistently categorized expenses and timely information.

The number of accounts in the AAHA/VMG Chart of Accounts makes bookkeeping a more time-consuming process and increases the risk of incorrect or inconsistent account classification. It doesn’t work for most owner-managed veterinary practices, as it forces them to dedicate more resources to bookkeeping that could be diverted elsewhere to help grow their practice. Even with those additional resources, it increases the risk that the records produced aren’t necessarily comparable to last month’s or last year’s.

These issues are what led to the development of the OVMA/ VetCPA Chart of Accounts, which balances detail and unnecessary complexity and is suitable for a privately owned practice. The goal is to build a system that allows practices to generate monthly accounting records quickly and efficiently, with limited chances for inconsistencies month-overmonth or year-over-year, so the records can be reliably used to highlight opportunities and threats in a practice so they can be managed appropriately.

A limited chart of accounts also increases the reliability of industry-wide reporting, such as the OVMA Economic Survey. Peter’s spreadsheet was useful for him, but the funny thing was that all the crossover SUVs he was considering had roughly the same warranty, horsepower, cargo volume, seating space, features and reviews, and were priced within $5,000 of each other. He ended up picking a model with a dealership that was closest to his home. Through the process, he got caught up in the overwhelming amount of details, and it wasn’t until the last minute that he realized the most important factor for him, assuming the other factors were relatively even, was that the dealership was close by for services.

You can find the OVMA/VetCPA chart of accounts HERE.

Greg Toner, CPA, CA, TEP, CLU, is principal at VetCPA.

Emily Steeves is the bookkeeping manager at VetCPA.

Reprinted from the Ontario Veterinary Medical Association’s Focus magazine www.ovma.org

Tax instalments

Originally published in OVMA Focus Magazine January/February 2025

BY GREG TONER

Last year, I went to a corn maze with my daughter. I stumbled along for a few minutes and was thoroughly lost. Everywhere I turned, there was another dead end. I felt like I couldn’t get ahead, and my daughter was providing less than helpful suggestions.

For many Canadians, managing taxes can feel like navigating a maze of rules and deadlines. One area that often confuses taxpayers is the concept of tax instalments. Let’s break down what tax instalments are, the process for paying them, and some common misunderstandings that can create unnecessary complications.

Tax instalments are essentially prepayments of your estimated tax liability, allowing you to pay in smaller increments rather than in one large sum at the end of the year. This system, overseen by the Canada Revenue Agency (CRA), is especially useful for individuals with income that isn’t subject to regular payroll deductions, such as self-employed individuals, business owners or those with significant investment income. By making these scheduled payments, taxpayers can budget for their tax obligations more effectively, reducing the stress of a large annual payment and ensuring compliance with the CRA.

If you anticipate owing more than a certain threshold—usually $3,000 in most provinces—the CRA may require you to make instalments. This threshold is lower in Quebec, set at $1,800.

The frequency and amount of instalments depend on each taxpayer’s unique situation, including income stability and past tax liabilities. Instalments are typically due on a quarterly basis. However, individuals with fluctuating income may find it helpful to adjust their payments based on changes in income, helping to avoid overpayment or underpayment. The CRA provides tools to assist taxpayers in calculating their instalment amounts, simplifying the process of staying current with tax obligations.

Why are tax instalments necessary?

The tax instalment system serves as a fair and organized way to collect taxes on income that doesn’t have automatic payroll deductions. Regular contributions help fund public services and programs throughout the year, rather than waiting for a large lumpsum payment at tax time.

Failing to keep up with instalments can result in interest charges and penalties from the CRA, which aims to keep taxpayers current and compliant with their tax obligations. Not only can missing payments create unexpected financial stress, but falling behind on instalments may also impact a taxpayer’s liability in subsequent years. Staying on top of tax payments throughout the year can prevent a cycle of financial uncertainty.

How to determine your tax instalment amount

The CRA provides three primary methods to determine your tax instalment amount:

1. Prior year’s tax method: if you owed more than $3,000 on last year’s tax return (or $1,800 in Quebec), the CRA generally expects you to make instalments based on this amount.

2. Current year’s estimate: if you expect your income to change significantly, you can calculate an estimate for your current year’s tax and base your instalments on this projected figure.

3. Average of previous years: some individuals prefer to use an average of the past few years’ tax obligations to determine instalments, which can be especially useful for taxpayers with income that fluctuates year-to-year.

The CRA offers multiple options to make instalment payments. These include online banking, direct transfer, pre-authorized debit and mailing a cheque. Many people prefer online payments, as they allow easy tracking of due dates and instant confirmation, ensuring payments are received on time.

It’s wise to keep thorough records of each instalment payment. This not only assists in reconciling taxes at the end of the year, but it also provides an audit trail in the unlikely event of a CRA discrepancy.

Common misconceptions about tax instalments

There are several misconceptions around tax instalments that can lead to non-compliance. Let’s clarify a few of these:

MYTH | INSTALMENTS ARE OPTIONAL

Some individuals mistakenly believe that they can choose to skip instalments if they think they’ll owe little or no tax by year-end. However, once the CRA requires instalments based on your prior year’s taxes, skipping these can result in interest charges.

MYTH | INSTALMENTS ARE THE SAME AS ANNUAL TAX RETURNS

Another common misconception is confusing instalments with the annual tax return. While instalments are periodic payments toward your total tax liability, the annual tax return is a comprehensive filing of income, deductions and final tax obligations. Instalments aren’t a substitute for filing your annual return, nor does the final tax return eliminate the need to make instalments if the CRA has specified them.

Failing to make required tax instalments can lead to interest from the CRA. Unpaid instalments accrue interest based on the CRA’s current interest rates, compounding the debt and creating additional financial strain. While missing a single instalment payment might seem minor, repeated non-payment can escalate into serious tax problems, including collection actions and further penalties. Staying compliant with instalment payments is the best way to avoid these consequences.

Tips for managing tax instalments efficiently

One of the most effective strategies for managing tax instalments is proactive planning. Setting reminders or calendar alerts for instalment due dates can help ensure payments are timely. Additionally, you might consider setting up a separate savings account for tax purposes. Contributing regularly to this account can make it easier to manage instalments without disrupting other financial goals.

For those who find tax instalments overwhelming, working with a tax professional can make a significant difference. Tax advisors and accountants are skilled in calculating instalment amounts, advising on adjustments based on changes in income and ensuring that clients meet all CRA requirements. Investing in professional guidance can often save time, reduce anxiety and help avoid costly mistakes, particularly in complex financial situations.

Understanding the landscape is essential. With a map of a corn maze, it’s no big deal. Similarly, understanding what instalments are and why they’re due makes them far easier to understand. If you’re not sure whether your instalments make sense, talk to your accountant for help.

And if you’re wondering, we did eventually make it out of the corn maze.

Greg Toner, CPA, CA, TEP, CLU, is principal at VetCPA.

Reprinted from the Ontario Veterinary Medical Association’s Focus magazine www.ovma.org