The Partners' Comments

The Inside Track

We are all aware of the need to control expenses within our practices whilst maintaining the highest client service standards.

Over the last year, we have been carrying out research into the financial costs incurred by our veterinary practices throughout the whole of the UK.

The findings are very interesting!

Financial cost headings can be broken down into the following sectors:

a) Borrowing
b) Bank charges
c) Deposit Account interest
d) Card transmission
e) Surgery insurance premiums
f) Locum insurance premiums
g) Motor insurance

Let us look at these in detail


BORROWING COSTS

Whilst PPS has been instrumental in reducing the cost of borrowed funds for expansion, acquisition, partnership etc, it is staggering to find so many new practice clients who are being overcharged by their own banks.

The current borrowing rates are as low as Bank of England base rate plus 1%.

We see so many practices paying much more interest than needed to service long term loans. Often the practice has approached the bank in question to be told that the rate is already set and nothing can be done.

TRUST US – WE CAN ASSIST YOU

As we have an open communication channel with all of the mainstream lenders, PPS is ideally placed to create a competitive environment for your bank.

Why should your bank charge you more than they would charge a new veterinary practice client?


BANK CHARGES

Once again, (in the knowledge that bank staff are targeted to achieve a minimum return from all business clients), the typical answer is that your bank is providing a competitive package as things stand.

This is not true. Your bank needs your business more than you need your bank and if you are able to provide detailed competitor tenders, it is likely your existing bank would wish to re-negotiate your business package.


DEPOSIT ACCOUNT INTEREST

Did you know that following the OFT investigation in 2002 that all of the banks were forced to improve competition in the business banking sector.

Until very recently, they were required to either:

A. Pay your business interest of at least Bank of England Base Rate minus 2%, or
B. Provide you with free business banking

Clearly, there have been significant variances in the way the different banks implemented these undertakings and 2 banks in particular have come in for criticism. The findings showed that up to 50% of business customers received neither deposit account interest nor free business banking.

Is your practice one of them?

Of more concern is the fact that these businesses were not offered either by the bank concerned!


CARD TRANSMISSION CHARGES

This is very straightforward.

If your practice is not paying 1.085% on credit cards or less and 15.9p per debit card or less, then call us and we can move you to a provider who will.

Free of charge and with no strings attached.
You do not need to move your banking!

Have you any idea how much additional profit the charge card sector generates for the banks?


£2,000,000,000 (THAT IS £2 BILLION POUNDS)

The profit made by the “big 4 banks” from small business operating in 2006.

It makes you think doesn’t it?

How much are you contributing?


SURGERY INSURANCE PREMIUMS

Our experience of this sector causes us concern. This sector has seen an explosion of so called “veterinary experts” in the last 2-3 years. Whilst long established providers such as PPS welcome healthy competition, the questionable tactics being adopted by some are damaging the veterinary insurance sector as a whole.

Firstly, we believe that the only time that an insurance policy provides you with any value is in the unfortunate event of a claim. At this time you most certainly do not want to talk to a corporate call centre in a vain attempt to speak to a person who actually knows how to help and guide you through the claims process.

Secondly, the quotation process seems to be based upon the existing broker offering renewal terms based upon what they think that you are happy to pay and not quoting you the lowest possible premium that they are able to.

We have lost count of the number of practices who have had a PPS quote which is up to 50% cheaper than the existing broker, only for the current broker to miraculously be able to match our quotation.

Our advice? Tell your existing broker that you want a refund of the excess premiums paid over the previous policy years.

It is simplicity itself to change your surgery cover!
Finally beware the levels of cover being offered and ensure that you are talking to recognised veterinary experts in the insurance field. It will pay you back in the event of a claim.


LOCUM INSURANCE

Here we are providing the veterinary profession a simple sickness and accident policy which is driven by price rather than product features.

The PPS locum scheme is one of the largest in the profession and we are proud to provide the right cover and support at a price that cannot be beaten.


MOTOR INSURANCE

For multi vehicle practices, you need a broker to manage a fleet policy on your behalf.

For those single vehicle policies where the vehicle is registered to you as an individual, we believe that you are better advised to obtain quotes from a direct provider and we would advise you to do so!

How many brokers will tell you that it is better to turn business away in your best interest?

As always, for all of these issues you must seek proper advice.


For advice regarding any of the above or for renewal quotations, please telephone David Hodgetts, Paul Jackson or Laura Marsh without obligation.