AAHA/VMG Chart of Accounts
What Is a Chart of Accounts?
A chart of accounts allows a practice to identify how their financial statements are set up. It details the activity within each of a designated set of accounts over a period of time. The chart of accounts will organize financial transactions of a practice into easily identifiable categories of information.
The chart of accounts are incorporated into the AAHA Benchmarking products. Your practice does not need to be using the AAHA chart of accounts in order to use the benchmarking data – our technology partner, Petabyte, maps whatever terms your practice is using to the appropriate code (which does not affect your operations). However, you may choose to adopt the chart of accounts, for example at the beginning of a new tax year.
Using the AAHA/VMG Chart of Accounts
After 17 years of development, AAHA makes the chart of accounts available free of charge to the profession for purposes of managing finances within veterinary practices. AAHA holds copyright and reserves all other uses. Reproduction, modification or distribution of this document is not allowed without the prior written permission of AAHA.
Standardized veterinary accounting codes enable the profession to develop better veterinary practice metrics and benchmarks and allow practitioners to organize their practice finances in line with generally accepted accounting principles.
Standardization is what powers AAHA Benchmarking – giving you the confidence that you can benchmark your practice data with other practices, no matter how you’re entering the data into your PIMS, whether it's veterinary practice revenue benchmarks or other veterinary practice financial benchmarks you're seeking.
Standards by the Profession, for the Profession
The AAHA/VMG Chart of Accounts was created in 2000 and is endorsed by several key veterinary organizations and industry partners, including the American Veterinary Medical Association (AVMA), Veterinary Hospital Managers Association (VHMA), and VetPartners.
The AAHA/VMG Chart of Accounts is the standard for classifying and aggregating revenue, expense, and balance sheet accounts in small animal veterinary practices. This effort was initiated and coordinated by the AVMA Economics Advisory Research Council using previously created materials from AAHA and VMG.
Want to learn more about how a chart of accounts is used in a veterinary practice? Read on!
The Relation of the Chart of Accounts to Financial Statements
Financial statements are the tool for understanding a practice’s current financial condition, concerns, and potential for improvements. The chart of accounts categorizes each of the accounts and creates the primary financial statements, which are the balance sheet, the income statement, and the statement of cash flows.
Setting Up a Chart of Accounts
Some accounting programs include a preloaded generic chart of accounts or allow the creation of one when the software is installed. The chart of accounts included with the software can be modified at any time (not recommended), but it is often more beneficial to create a new chart of accounts from scratch.
For any major revisions to the chart of accounts, it is best to work with your financial professional and wait until the beginning of a new tax year so the comparability from month to month within the same year is not lost. Any minor changes to your chart of accounts can be made at any time.
Want to learn even more? Download a complimentary copy of our booklet, Financial Standardization in Veterinary Practices: Why It Matters and How to Do It.