10 Mar 2026
As the profession moves keenly into 2026, and in light of both market forces and government policy, financial planning has now become as important to the success of a practice as clinical skill…
Adam Bernstein
Job Title
Image: Kung37 ./ Adobe Stock
Vet practices are now working in an environment shaped by rising costs, workforce shortages, demanding clients (and their expectations) and rapid technological advancement. On top of this is the activity of the Competition and Markets Authority (CMA) and its investigation of prices and proposals for change.
Given the threats, financial sustainability of a practice clearly depends on good planning, financial discipline and being able to adapt.
A strong financial foundation is the starting point for any successful business – veterinary or otherwise. This makes accurate and timely financial tracking essential, especially when margins are under pressure (from the CMA and elsewhere) and costs are rising quickly.
The internet has made pricing more transparent, so modern practice management and accounting systems now allow practices to monitor revenue, expenses and profitability in real time. As a result, it is not unreasonable to expect practices to regularly review finances to identify trends early and prevent small issues from becoming serious problems.
And for independently owned practices, having a clear separation between personal and business finances remains not only best practice, it makes tracking finances simpler.
In any business, cashflow management is central to financial stability. Even profitable practices can struggle if cash is not available when needed. By extension, maintaining adequate cash on one side allows a practice to navigate seasonal fluctuations, unexpected expenses or temporary downturns without resorting to high interest borrowing. Similarly, improving payment processes can help the balance sheet; encouraging (non-retail) payment at the time of service through, possibly, online payment options, and reducing delays in billing will help.
The problem for practices is how to increase revenue: clients are under pressure yet still expect high-quality care and the CMA is carefully watching what the profession is doing.
This means that strategic pricing adjustments may be necessary to keep the balance between rising labour costs (if for no other reason, because of taxation), supply and equipment costs.
Those practices that do the best financially tend to review and adjust their fees regularly rather than postponing increases for years where price changes become far more noticeable. Where prices need to rise, they are more likely to be accepted if they are clearly communicated, with reasons, and tied to the value of care provided.
Just as cash is king, so appropriate debt management can play a significant role in long-term financial health. When it’s used strategically, debt can help a practice grow through investments in equipment, facilities or technology that increase efficiency or lead to new services. That said, debt needs to be taken on with a clear expectation of a return. Debts need to be regularly reviewed to ensure that borrowing is making a measurable financial contribution.
At the same time as evaluating debt levels, so it’s important to consider any opportunities to lower interest costs; consolidating high-interest debt should simplify cashflow and free up cash.
One option – which if not already deployed – is care plans and membership-style programmes to help the client plan ahead and encourage routine care while providing predictable, recurring revenue for the practice. The year 2026 should be the one to either implement care plans or refine them to better match client needs, regardless of the age or condition of the animal.
Similarly, practices may benefit if they expand the range of services offered to clients, but only if done thoughtfully. Dentistry, advanced diagnostics, behavioural consultations, nutritional counselling and palliative care are all key targets for this. But expanding or offering new services needs to have a sound basis for the move; training, equipment and more staff comes with cost that must be justified. Getting this wrong may damage a practice more than it will benefit it.
Elsewhere, practices need to keep costs under control. Indiscriminate or random cost cutting is unhelpful and demoralising; it’s far better to look for efficiencies. Inventory management is one of the easiest targets in controlling unnecessary expense. Not only can poor tracking of inventory mean expired products left on the shelf, overstocking or missed charges, it also leads to cash tied up doing nothing.
Allied to this is the need to examine supplier relationships. Often for good reason, practices continue to work with the same suppliers year after year without reviewing pricing or terms. But in an environment of rising costs, annual contract reviews and supplier comparisons are essential and may lead to significant savings. Even small reductions, over time, can lead to serious improvements in profitability.
At the same time, it makes sense to consider the costs of running the practice in terms of the building itself. Energy-efficient lighting, modern heating and cooling systems, and routine maintenance may require upfront spending, but they often result in lower utility bills and fewer costly repairs. Of course, financial decisions here need to relate to the full life cycle of the investment rather than focusing solely on immediate expense, but changes can increase profitability.
And then there’s the matter of staff-related costs – one of the biggest fixed costs of a practice.
But while staff are a cost, they’re also a practice’s greatest asset.
The 2024 Survey of the Veterinary Profession published by the RCVS, noted that “…stress and workload pressures continue to be major issues for vets and appear to have been exacerbated by staff shortages…”.
Consequently, competition for vets and support staff is intense, so competitive salaries and benefits are necessary for recruitment and retention. The key is to link pay to productivity, profitability and performance metrics.
That said, with luck, in December 2024, modelling prepared for RCVS predicted a 50% rise in registered practising vets and a 78% increase in the number of veterinary nurses by 2035. This should help contain wage inflation.
But beyond compensation, practices need to invest in training and professional development. The reason is clear – when vets and support staff have been trained to work to the best of their abilities, all can focus on their specific roles; this improves efficiency, increases appointment capacity and enhances job satisfaction. Even better, where staff are cross-trained in the roles of others, absences or departures can be managed better to improve operational flexibility.
Risk management is another part of financial planning. Practices need to check insurance coverage regularly to ensure adequate protection against professional liability, business interruption and cyber risks as well as the normal threats to property and people. Unexpected events can quickly halt even a well-managed practice, but those with the right coverage (and plans) will be better equipped to recover.
Technology is another tool to increase financial well-being. As noted earlier, practice management systems, if used correctly, can provide insights into client data – retention rates, appointment take-up (and those missed), uncollected fees and overall profitability. With such information, practice managers can make informed decisions rather than relying on intuition. And practices that use data and analytics will be better able to identify inefficiencies.
It is worth noting that telemedicine and online appointments are, for some practices, essential tools. Clearly, they can’t replace in-person examinations, but they do offer new revenue opportunities through follow-up consultations and ongoing client engagement without anyone having to travel – especially those who are less mobile for whatever reason. By the same token, online scheduling and automated reminders, and digital treatment estimates for insurance purposes, can reduce lost revenue from delayed approvals and no-shows.
But technology is not infallible as increased reliance on digital systems means increased financial risk from cyber threats. Even a simple data breach and system disruption can be costly and damaging to a practice’s reputation. Worryingly, a November 2025 government report, Summary of research on the economic impact of cyber attacks, reckoned that the average cost of a significant cyber attack for an individual business in the UK (averaged across all firm sizes and sectors) was almost £195,000.
As a result, practices need to budget for cybersecurity measures and regular software updates and staff training; protecting client data and payment systems is not only a legal responsibility but also a critical part of keeping a practice up and running.
While its logical to concentrate on day-to-day tasks, financial well-being also means looking at long-term planning. Changes in ownership, for example, whether through sale, partnership, or succession, invariably require years of preparation. It follows that practices that are consistently profitable, have well-documented financial records and efficient operations are more attractive to buyers and so command higher valuations. Any short-term financial decisions should always be considered in light of their impact on the long term.
Part of this thought process means looking at the practice’s place within a consolidating profession. Some owners choose to remain independent, while others partner with or sell to larger groups. Each option carries financial implications related to autonomy, access to capital and economies of scale. The right choice depends on the owner’s goals, risk tolerance and vision for the future.
Financial success this year – any year – will fall to practices that see financial management not as a chore, but as an ongoing process. By financial prudence, investing wisely in both staff and technology, and preparing for growth and risk, veterinary practices can deal with and grow in a challenging economy.