Here’s How and Why We Used Our Secret Sauce to Make AAHA/VMG Chart of Accounts Adoption Easier

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It’s no secret that the coding of transactions in our industry is a bit of a mess.

Over time, practices have built their own systems for keeping track of the services they perform and the products they sell using unique codes in their PIMS (practice information management system).

Any reader of this blog or friend of VetSuccess knows that we’ve wrestled this problem to the ground with our machine learning algorithm, aka our “secret sauce.” Our proprietary, custom-built software effortlessly organizes transaction codes for each practice, but even so, that’s just our way of handling the codes.

An animation showing how VetSuccess normalizes the data codes in a practice

To state the obvious, the veterinary industry could really benefit from standardized codes.

Unifying codes across the industry is important because without code standardization it’s very hard to do an apples-to-apples comparison of what’s happening in practices. Benchmarks become extremely onerous, if not impossible, to collect.

Without benchmarks, practices have no clue how they’re doing in relation to their peers.

Enter AAHA & VMG with their standardized Chart of Accounts

AAHA and VMG have teamed up to devise a well-defined codification for transactions and revenue, the AAHA/VMG Chart of Accounts. This is a documented process for classifying revenue, expense, and balance sheet accounts in small animal veterinary practices.

The AAHA/VMG Chart of Accounts has been available to VMG members for quite some time. In 2017, industry associations including the AVMA, VHMA, and VetPartners all endorsed the AAHA/VMG Chart of Accounts as the recommended standard.

But just because something is recommended, doesn’t make it easy to implement.

Adopting the AAHA/VMG Chart of Accounts

Converting to the AAHA/VMG Chart of Accounts takes a real commitment on the part of practices. Up until recently, practices had to be willing to abandon their own way of coding transactions and make large changes in their PIMS to create the new codes.

Implementation of the new codes requires technical PIMS changes, but also social and workflow changes as the entire practice team learns the new coding system. Some of the feedback we’ve heard from practice managers is that it’s just too much work without a big enough reward.  

So where does that leave us?

A unified set of codes across the industry would be helpful so that we’re all speaking the same language and can easily compare across practices. Click To Tweet But implementing the new code set is hard.

Enter the VetSuccess POR Aligned to the AAHA/VMG Chart of Accounts

AAHA/VMG Chart of Accounts as shown in the POR

Fear not, there is a technological solution to the problem and VetSuccess has implemented it. Secret sauce to the rescue…

As of June 2019, the VetSuccess Practice Overview Report has been updated to align practice revenue codes with the industry-approved AAHA/VMG Chart of Accounts.

No need for practices to do anything or change anything. Keep using your codes as is.

The VetSuccess algorithm will automatically align every revenue code to the corresponding AAHA/VMG Chart of Accounts category by looking at the code, the description, the cost, and the other codes that it shows up with.

Our audits show greater than 95% accuracy on a first pass of the mapping exercise. The remaining 5% of the codes are handed over to humans to figure out. The fully mapped sets are also audited for accuracy by real live people who have worked in veterinary practices. The result: accurately mapped codes without practices changing a thing.

Since this powerhouse report contains revenue data but not cost side data, it handles half the heavy lifting required to determine practice profitability. But don’t worry, the VetSuccess team is actively working on the cost side as well — a topic for another blog post for sure.

The result? Better benchmarking is here.

AAHA/VMG Chart of Accounts Appendix

The Practice Overview Report appendix now includes a print-friendly revenue statement with revenue per patient benchmarks in each revenue category.

Best of all, VetSuccess member practices have easy access to accurate, reliable, and consistent benchmarks. This is by far, the greatest win associated with aligning to the AAHA/VMG Chart of Accounts.

We’re really excited to bring our technology to this important industry initiative. The feedback we’ve received so far has been incredible. If you’d like to learn more about our secret sauce, we can’t give you the recipe (it involves A LOT of software development) but we’d be happy to give you a tour. Just reach out.


Martin Traub-Werner, the author

Martin Traub-Werner is the dedicated founder and CEO of VetSuccess. His number one focus is providing the most value possible to VetSuccess clients – and he loves to talk data so don’t hesitate to contact him. Martin can be reached at martin@vetsuccess.com