Session 9 Flashcards
What are the 4 stages of the economic cycle?
- Expansion
2.Prosperity - Contraction
- Recession
What are the six steps of budgeting?
- Determining financial results
- Analysis of the financial statements
- Normalizing the revenue and expenses
- Budgeting revenue
- Budgeting expenses
- Combining budgeted revenue and expense and making adjustments
What are the 4 ways to organize expense categories?
- Personnel Expenses
- Variable Expenses/Cost of Goods Sold
- Occupancy/Facility Expenses
- Fixed/Administrative Expenses
What is the % of gross if the gross revenue is $1,250,000 and the expense is $87,365?
%6.9 (expense/Gross Revenue)
Patient volume is considered a ____ _____ of revenue growth.
Key Driver
A simple method of creating an expense budget is to add what to the base expense figure?
The last three years average growth rate
What is the difference between the Client Credit Policy and the Charge Account Policy?
a. Client Credit Policy-establishes the pre-qualifications necessary to open a charge account. Example client may need a minimum of 2 years of perfect payment history without a problem.
A charge account policy-establishes credit limits, payment due dates, payment methods and invoicing procedures.
The fee schedule should be reviewed minimally ____a year.
Once
What percent of gross revenue is said to be lost to embezzlement in small businesses annually?
a.>%5
What is the most often used chart of accounts?
AAHA
Why is a Petty Cash system suggested over using cash from the reception drawer for smaller purchases?
Improves internal controls by providing a system for tracking cash purchases
Expansion, prosperity, contraction & recession are the four stages of?
a. The budget Process
b. The business cycle
c. Exit strategy awareness
d. Business valuation timing
b. The business cycle
What are two ways of normalizing revenue and expenses when creating a budget? (multiple choice)
a. Remove any non-recurring items from the previous year
b. Combine the last 3 years as an average
c. Combine annual budget totals and divide by 12 to normalize anticipated monthly expenses
a. Remove any non-recurring items from the previous year
b, Combine the last 3 years as an average
Which metrics below are important considerations when creating a budget? (multiple choice)
a. Last three years Profit and loss and productivity statements
b. All lease and loan documents
c. Fee schedule
d. List of operational changes expected in the next few years and their potential effect on revenue and/or expenses (new services, expansion, etc.).
e. List of all major capital
all metrics listed are important considerations
In regards to creating a Credit Policy; what are the two sub policies that you should begin with? (Multiple Choice)?
a. Client Credit Policy
b. Client Charge Policy
c. Veterinary Cost per minute
d. Fixed cost per minute
a. Client Credit Policy
b. Client Charge policy
What elements should be included in the Charge Account Policy for the practice (Multiple Choice)?
a. The pre-qualification procedures for a client of unknown standing
b. The process for flagging a pre-qualified client in your practice management system
c. Acceptable forms of payment as well as storage of credit card numbers to be used as a backup guarantee the client agrees to at signing.
d. Total invoice amount a client can charge without additional approval of management/ownership
a. The pre-qualification procedures for a client of unknown standing
b. The process for flagging a pre-qualified client in your practice management system.
d. Total invoice amount a client can charge without additional approval of management/ownership
A list of procedures to use when considering ways of extending credit to clients includes creating ranges of available credit amounts based on the clients longevity with the practice.
a. True
b. False
b. False
What is the Consumer Price Index?
a. A list of index of prices used to measure the change in the cost of basic goods and services
b. An index report of goods and services used to track consumer spending trends for purposed of determining price points in business
c. An index of consumable goods created by the Bureau of Labor Statistics that helps establish economic trends in business
a. A list or index of prices used to measure the change in the cost of basic goods and services
The consumer Price Index can be instrumental in determining the cost of living increase for a variety of expenses associated with running a veterinary practice.
a. True
b. False
a. True
In relation to Fee Analysis which of the following elements should be included in the calculation (multiple choice)?
a. Variable cost per minute
b. Staff cost per minute
c. Veterinary cost per minute
d. Fixed cost per minute
b. Staff cost per minute
c. Veterinary cost per minute
d. Fixed cost per minute
Marsha Heinke DVM states _____% of practices have been victims of fraud or embezzlement.
a. %80
b. %67.8
c. %49.8
b. %67.8
It is recommended that practices do not prosecute confirmed cases of embezzlement unless the loss is determined to be greater than $2000.
a. True
b. False
b. False
What entity may be a good resource for the practice in the event embezzlement is suspected?
a. The Federal Trade Commission
b. Your Insurance Carrier
c. Business Protection Agency
d. All of the above
b. Your Insurance Carrier.
