A Practical Guide to Veterinary Inventory Management (2025)

Emmitt Nantz
24 Jan 2025
The complete guide to veterinary inventory management 2025

For many practices, inventory management feels like an uphill battle. It’s time-consuming, expensive, and often chaotic – especially when your staff is already stretched thin. The frustration of stockouts, overstocking, and spiraling costs isn’t just a logistical problem; it’s a daily stressor that eats up time and energy you’d rather spend with your patients or supporting your team.

When inventory isn’t managed well, it’s not just a headache – it has real consequences:

  • Stockouts leave you without the supplies needed to treat patients, causing delays in care and frustrating your clients.
  • Excess inventory ties up cash you could use elsewhere, while expired products quietly drain your resources.
  • High Costs of Goods Sold (COGS) eat away at your margins, taking away profits that could be invested in your team, equipment, or growth.

Sound familiar? These challenges don’t mean your practice is beyond help – they’re just common pain points in a busy environment. The good news is, with the right strategies and tools, they’re entirely fixable.

Transform Your Inventory Management

 Reduce inventory costs, save time, and minimize stockouts

8 steps to successfull veterinary inventory management inventory ally

Step 1: Audit and Analyze Current Processes

The first step in optimizing your inventory management is to understand where things stand. A clear picture of your current inventory processes allows you to identify inefficiencies, inaccuracies, and discrepancies that might be costing your practice time and money. Without this baseline, it’s hard to make meaningful improvements.

Regular inventory audits aren’t just about counting items on shelves – they help you uncover trends and underlying issues you might otherwise miss. For example, you may find that certain products are being over-ordered and left untouched, while others run out faster than expected. Patterns of shrinkage or loss might point to waste, theft, or errors in your system. 

Question to ask yourself:

  • Are certain items being over-ordered and sitting untouched?
  • Are others running out faster than expected due to high demand?
  • Are there patterns of shrinkage or loss that need addressing?

Identifying these problems early gives you the chance to refine your processes, minimize waste, and ensure you always have what you need for patient care. Not sure where to start? Our Inventory Cost Calculator can help you understand the financial impact of your current processes and identify areas for improvement.

inventory ally calculator for veterinary practices

Key Metrics to Watch

When auditing your inventory, start by focusing on these critical metrics:

  • Inventory Turnover: How quickly products move off the shelves. Higher turnover means you’re stocking efficiently, while lower turnover could indicate overordering or slow-moving items.
  • Shrinkage: Discrepancies between expected and actual inventory levels, which may point to waste, theft, or errors.
  • Carrying Costs: Reflects the cost of holding inventory, like storage and expired items. High carrying costs could mean money tied up in stock that’s not moving.
  • Stockout Rate: Tracks how often items are unavailable when needed. Frequent stockouts can disrupt care and create frustration for both clients and staff.

These metrics provide actionable data to adjust your ordering practices and minimize waste.

“Without a clear baseline to start from, getting your inventory on track can be an overwhelming endeavor.  An ABC analysis, or similar approach, can help identify the 20% of items that have 80% of the impact.  We like to start there.”

Nicole Clausen, Inventory Ally Co-Founder

Implementation Tip:
Schedule audits on a regular basis – monthly or biweekly works well for most practices. Training your team to conduct consistent and efficient counts ensures accuracy and saves time in the long run. Keep the process simple with checklists and templates so everyone is on the same page.

Inventory Ally Insight:
Practices using Inventory Ally can streamline this entire process. The veterinary software tracks both the products you sell to clients and the consumables you use in-house, providing a complete, real-time picture of your inventory across all categories.

“Inventory management is a very common struggle for many practices! If you are feeling overwhelmed by your inventory and aren’t quite sure where to start, know that you are not alone. Rather than trying to boil the ocean (in an afternoon), don’t be afraid to start small. Consider: what is one baby step you can take today or this week?”

Emmitt Nantz, Inventory Ally Co-Founder

Step 2: Set Clear Goals

Clear, measurable goals give your inventory management strategy a sense of direction and purpose. Without them, it’s easy to make decisions reactively, which can lead to inefficiencies and higher costs. Goals like reducing your Cost of Goods Sold (COGS) or improving inventory turnover do more than just organize your stock – they create tangible benefits for your practice.

For example:

  • Reducing COGS frees up financial resources that can be reinvested in staff training, new equipment, or client services.
  • Improving inventory turnover ensures stock moves efficiently, reducing waste and carrying costs.

The most effective goals align with your broader practice objectives, like improving financial stability or enhancing patient care. When your inventory targets support these larger goals, they help create a more predictable and profitable operation.

Implementation Tip:
Start by establishing Key Performance Indicators (KPIs) that reflect your practice’s priorities. Some examples include:

  • Targeting a specific COGS percentage (e.g., 18-20%).
  • Achieving a defined inventory turnover rate (e.g., 6-8 turns annually for high-demand items).
  • Maintaining stock levels at or below a percentage of monthly revenue (e.g., 20%).

Track these KPIs regularly and use performance data to refine your strategies. Adjust goals as needed to reflect seasonal trends, growth, or changes in your practice’s services.

Inventory Ally Insight:
Inventory Ally simplifies goal-setting by providing real-time analytics and actionable insights. The platform tracks key metrics like inventory on hand and turnover automatically, giving you a clear picture of how your inventory is performing. With its predictive tools, you can make data-driven adjustments to keep your goals on track and your operations running smoothly.


Step 3: Use Data for Decision-Making

Good veterinary inventory management starts with understanding your numbers. Data (both historical and real-time) provides the clarity you need to refine strategies, spot inefficiencies, and avoid costly mistakes.

For example, looking at historical consumption can reveal seasonal trends, helping you prepare for periods of higher demand while scaling back when things slow down. Real-time insights, on the other hand, allow you to adjust quickly to changing conditions, preventing stockouts or overordering. Instead of guessing, you’re working with facts, which leads to better outcomes for your practice.

Data also highlights inefficiencies you might not notice otherwise. Slow-moving items that tie up cash, high shrinkage rates, or inconsistent ordering patterns can all be identified and addressed through data analysis. This is where leveraging analytics becomes essential.

Implementation Tip:
Invest in tools that centralize and analyze your inventory data. Platforms like Inventory Ally provide a comprehensive view of trends and metrics, empowering you to make informed, data-driven adjustments to your inventory processes.

Inventory Ally Insight:
Inventory Ally’s predictive analytics go beyond basic reporting, delivering actionable insights tailored to your practice’s specific needs. From recommending optimal order quantities to identifying inefficiencies, it helps you optimize purchasing while reducing waste.


Step 4: Establish Reorder Points and Safety Stock Levels

Balancing supply and demand comes down to knowing exactly when and how much to reorder. Reorder points help ensure you replenish items before they run out, while safety stock provides a buffer against unexpected surges in demand or supply chain disruptions. Together, these strategies reduce the risk of stockouts or overloading your shelves with unnecessary inventory.

To define reorder points and safety stock effectively, you need to understand your practice’s consumption patterns. While practice management software transactional data is a valuable resource for identifying usage trends, it’s important to note its limitations. PIMS data typically captures items sold to clients but often misses critical details, such as white goods or the variability of supplies used in service packages. Relying solely on this data can leave significant gaps in your planning.

By supplementing PIMS data with additional sources – such as manual tracking or insights from inventory management software – you can get a more accurate and holistic view of your inventory needs. Leveraging this comprehensive data allows you to calculate precise reorder points and safety stock levels that align with your practice’s actual needs. This approach keeps carrying costs low while ensuring you always have what’s needed for patient care.

Implementation Tip:
Use inventory management software to automate reorder point calculations. This not only saves time but also ensures you’re always ahead of demand, even during peak seasons or emergencies.

Inventory Ally Insight:
Inventory Ally’s dynamic reorder system takes the guesswork out of managing stock. By recalculating optimal reorder points and safety stock weekly, it ensures your inventory levels stay aligned with real-time demand and usage trends. This helps practices avoid costly stockouts or overordering while maintaining a smooth, efficient operation.


Step 5: Leverage Automation

Manual inventory tasks are not only time-consuming but also prone to mistakes. Tracking inventory by hand, estimating orders, or updating spreadsheets leaves room for human error. Automation eliminates these risks by handling tasks like real-time tracking, order recommendations, and usage analysis. With the right tools in place, you’re always equipped with the supplies you need, exactly when you need them.

Modern inventory tools like Inventory Ally integrate directly with PIMS and other platforms to provide:

  • Predictive analytics for smarter purchasing decisions.
  • Real-time tracking to monitor inventory levels without manual counts.
  • Automated order recommendations based on historical order data and transactional data from your PIMS.

By automating these processes, your veterinary clinic can avoid stockouts, reduce overordering, and achieve greater operational efficiency. It’s a simple change that can save time, reduce stress, and give you more confidence in your inventory system.

Implementation Tip:
Choose software that integrates seamlessly with your existing systems. Look for tools with robust forecasting, reporting, and compatibility with platforms like Vetcove or MWI to simplify ordering and ensure a smoother workflow.

Inventory Ally Insight:

Inventory Ally Supplier integrations inventory management

Inventory Ally’s smart integrations simplify inventory management by connecting with the tools you already use. From practice management software like Avimark, Provet Cloud, and Shepherd to suppliers like Covetrus and MWI, the platform works seamlessly with your existing systems. These integrations streamline tasks like ordering, tracking, and reporting, saving your team valuable time and reducing the risk of stockouts. To see the full list of integrations, visit our Integrations Page.

“Managing inventory is complicated enough for retail stores or manufacturing, but for service business that sell and use inventory in house it can be much harder.  Without proper tools to monitor data for optimal replenishment and changes in consumption patterns, it can be a lot to keep track of for a practice manager or part time inventory manager.”

Emmitt Nantz, Inventory Ally Co-Founder

Step 6: Train and Empower Your Team

Your team is at the heart of effective inventory management. Giving them the right training and tools not only reduces mistakes but also helps everyone feel more confident in their roles. When your staff understands the process and their part in it, everything runs more smoothly – orders are placed correctly, counts are accurate, and communication improves.

Training doesn’t need to be complicated, but it should be consistent. It’s about giving your team the knowledge and hands-on experience they need to handle inventory without stress.

To build confidence and consistency in your inventory processes, focus on:

  • Clarity: Make sure everyone knows their specific responsibilities in inventory tasks.
  • Hands-On Practice: Use real-life scenarios or simulations to help your team learn by doing.
  • Feedback Loops: Encourage your team to share what’s working and where they see opportunities for improvement.
  • Simplified Tools: Choose user-friendly systems that don’t overwhelm staff with unnecessary complexity.

When the tools you’re using are straightforward and your team is well-prepared, it’s much easier for everyone to stay on track and stick with the system.

Implementation Tip:
Schedule regular training sessions, especially when introducing new inventory tools. Hands-on practice is key to ensuring your team feels confident and capable. Assign clear roles and responsibilities, and encourage feedback to refine processes over time.

Inventory Ally Insight: With its simple, intuitive interface, Inventory Ally makes training quick and straightforward. Your team can easily learn to use the system without needing hours of setup or explanation. It’s a tool that supports your team’s success and helps reduce errors from day one.


Step 7: Implement a Cycle Count System

Keeping inventory accurate doesn’t have to involve shutting down operations for a full day. Cycle counting – performing smaller, regular counts of inventory categories – helps maintain accuracy without disrupting your practice’s daily workflow.

Annual audits are time-consuming and often reveal discrepancies far too late to fix them effectively. Cycle counts allow you to:

  • Catch issues early, like shrinkage or overstock.
  • Keep stock levels accurate and up-to-date.
  • Reduce the workload and stress associated with year-end audits.

By focusing on smaller portions of inventory, such as high-use or high-value items, you can ensure accuracy and gain a clearer understanding of what’s moving and what isn’t. This targeted approach helps you stay ahead of potential issues and improves overall efficiency.

Implementation Tip:
Rotate inventory categories weekly or biweekly, prioritizing essential items like medications and frequently used supplies. This keeps counts manageable and ensures critical stock is always accounted for.

Inventory Ally Insight:
Inventory Ally takes the hassle out of cycle counting by organizing and prioritizing counts automatically. It identifies the items needing attention and schedules them into your workflow, saving time and improving consistency across the team.


Step 8: Monitor and Adjust Regularly

Inventory management isn’t something you can set and forget. It’s an ongoing process that requires regular monitoring and adjustments to keep up with changing demand, costs, and trends. By staying on top of key metrics, you can identify inefficiencies, refine your processes, and ensure your inventory always aligns with your practice’s needs.

Metrics like velocity, margins, redundancy, cost of carrying inventory, and cost of goods sold (COGS) are especially important to track. These metrics help you:

  • Spot inefficiencies and address them proactively.
  • Avoid unnecessary spending by adjusting order quantities or timing.
  • Ensure stock levels align with demand, so you’re not overstocked or running out of essentials.

Key Considerations:

  • Velocity: Understand how fast your inventory turns over. Faster turnover indicates efficient stocking, while slow-moving items may need attention.
  • Margins: Costs fluctuate frequently. If you’re not consistently monitoring these changes, you risk losing profitability.
  • Redundancy: Redundant products increase carrying costs and create confusion. Focus on streamlining your inventory.
  • Cost of Carrying Inventory: This is often 30-40% too high in practices. Reducing carrying costs can free up resources.
  • Cost of Goods Sold: Regularly review and optimize COGS to ensure it aligns with your business’s financial goals.

Tracking trends over time allows for continuous improvement. For example, a slowdown in stock turnover might indicate that reorder points need adjusting or that you should explore other suppliers. Similarly, a drop in compliance rates could signal that team workflows or training need to be revisited.

Implementation Tip:
Use inventory management software to generate regular reports on key metrics. Schedule time to review these reports, either monthly or quarterly, and use the insights to make informed decisions.

Inventory Ally Insight:
Practices using Inventory Ally report tangible results, like reducing COGS by up to 10% and saving 50%-75% of the time typically spent managing inventory. These improvements translate into better profitability, streamlined operations, and a more efficient practice overall. With Inventory Ally’s analytics tools, staying proactive becomes easier than ever.


Lessons from Real Practices

Want to see how other practices are handling their inventory challenges? Check out the case studies: 

Looking for more insights into veterinary inventory optimization? Nicole Clausen, Inventory Ally co-founder, has shared detailed guides and templates for veterinary practices, available for free download here.


Conclusion

The Impact of Efficient Inventory Management

Getting control of your inventory isn’t just about keeping your shelves organized – it’s about transforming how your practice operates. Efficient veterinary inventory management leads to real, measurable benefits. By reducing waste and carrying costs, you free up resources that can be reinvested in your team or new equipment. Avoiding stockouts means better continuity of care for your patients, and streamlining processes gives your team more time to focus on client services instead of juggling spreadsheets or chasing down missing supplies.

Ultimately, managing inventory well is about creating a practice that runs smoothly, serves clients more effectively, and maintains financial stability. It’s not just a task to check off – it’s a foundation for success.


Action Items for Implementation

inventory ally veterinary inventory management action plan

Here’s a simple plan to get started:

  1. Audit Your Current System: Conduct a thorough inventory review to uncover gaps and inefficiencies.
  2. Set Clear Goals: Define what you want to achieve, whether it’s reducing costs, improving turnover, or avoiding stockouts.
  3. Explore Software Solutions: Research tools like Inventory Ally to see how they can integrate with your existing systems and help you achieve your goals.
  4. Train Your Team: Equip your staff with the knowledge and tools they need to keep inventory processes consistent and effective.
  5. Monitor and Adjust: Use data to track your progress and make adjustments as needed.

Inventory management isn’t something you fix once and forget about – it’s an ongoing process. But with the right strategies and tools in place, it’s one that becomes easier to manage and a whole lot less stressful.


Next Steps

If you’re ready to take the next step, start by assessing your current inventory processes. Are there inefficiencies, recurring stockouts, or excess inventory sitting on shelves? Look at your data – if it’s not easily accessible, that’s a sign your system might need an upgrade.

Consider whether tools like Inventory Ally could help. Automating tasks like cycle counts, reorder calculations, and tracking usage saves time and eliminates guesswork, making your job easier and your practice more efficient.

Transform Your Inventory Management

 Reduce inventory costs, save time, and minimize stockouts