Veterinarians and pet services
A clinic sells consultations, medicines, grooming, and pet food from one counter. Here is how to keep those four things straight.
A veterinary clinic is several businesses in one room. There is professional service, there is medicine dispensed, there is grooming and boarding, and there is a shelf of food and supplies.
Customers pay one bill at one counter. Your records should not treat it as one thing.
Four revenue streams, not one
Professional services. Consultations, surgery, and treatment. This is professional income earned by the veterinarian.
Medicines and supplies dispensed. Goods sold, often at a margin, and stock that has to be bought, stored, and tracked.
Grooming, boarding, and other services. A service business, often staffed by people who are not veterinarians.
Retail. Food, toys, accessories. Straightforward retail with its own margins.
These behave differently. Services and goods are treated differently, professional income and business income have their own characteristics, and each stream has a different margin. A clinic that records one lump called sales knows nothing about which part of the operation is actually working.
The most common discovery when clinics do separate them: the retail shelf is either carrying the clinic or losing money quietly, and nobody knew which.
Medicines are inventory with a clock
Unlike most retail stock, veterinary medicines expire. That has two consequences.
They are inventory, which means money sitting on a shelf rather than an expense the moment they were bought. A clinic that treats every bulk order as an immediate expense will have books that swing wildly.
And expired stock is a loss that has to be recognised properly rather than quietly binned. Writing off expired medicine is normal and expected; pretending it was never bought is not.
Controlled or regulated products bring their own record-keeping requirements from other agencies, separate from anything tax related.
Staff and the professional line
A clinic typically has veterinarians, assistants, groomers, and front desk staff. Some are employees. Some veterinarians work on a share of the fees they generate rather than a wage.
That last arrangement needs deciding rather than drifting. A vet working set hours in your clinic, using your equipment, with patients you booked, looks like an employee whatever the pay structure. A visiting specialist who comes in for procedures may not be.
The distinction affects the contribution systems and the payroll obligations, and it is worth settling before there are five of them.
The equipment is substantial
Veterinary practice is equipment-heavy: surgical tables, imaging, laboratory machines, cages, grooming equipment. These are long-lived assets, recognised over the years they serve you rather than expensed at once.
Clinics setting up often expect the whole fit-out to count against the first year's income and are surprised when it does not. Knowing this in advance changes how you plan the first two years.
Practical footing
Record the four streams separately, even if the customer pays one bill.
Track medicines as stock, count them, and write off expiries properly.
Decide each staff member's status deliberately.
Treat equipment as assets, with purchase dates and amounts recorded.
Issue documents for every transaction, including the small retail ones at the counter.
Running a clinic and unsure how to separate professional fees from the shop? Ask AskOnward for a plain answer from the official BIR rules, so you can see which part of the practice is paying for the rest.
This article is for general information and is not affiliated with the government. For official forms and the latest rules, see the Bureau of Internal Revenue at bir.gov.ph.