Rising Bad Debt in Veterinary Practices: Causes, Impacts, and Solutions

If you’re a veterinary practice owner or manager, you may have noticed an unwelcome trend in recent years: more clients falling behind on payments and more unpaid invoices lingering on your books. In fact, industry estimates suggest UK vet clinics could be missing out on up to £530 million annually due to unpaid bills – roughly 5–10% of the sector’s turnover slipping through the cracks.

Bad debt (fees that go uncollected) has been on the rise over the last five years. A perfect storm of economic pressure, rising costs, and changing client expectations is largely to blame. We’ll explore why bad debt is increasing, how it impacts veterinary practices, and what you can do to combat it – including when to consider a specialist debt collection agency to safeguard your finances while you focus on patient care.

Why Bad Debt is on the Rise

Economic stressors and shifting client expectations have led to more unpaid vet bills in recent years.

Several trends are driving the increase in unpaid vet bills:

Economic pressures on pet owners: The cost-of-living crisis has left many pet owners financially stretched. Nearly 91% of UK vets report seeing more clients struggle to afford care and even delaying treatment due to money concerns. Owners facing tough choices may postpone visits or request to “pay later,” leading to more outstanding bills. Some have even cancelled pet insurance or cut back on preventive care to save money, leaving them unprepared for emergency vet expenses.
Rising veterinary costs: The cost of running a practice – and the prices charged to clients – have been climbing. Veterinary services inflation has outpaced general inflation, reaching about 13% in 2023. Higher prices for supplies, staff, and other overhead mean higher fees for clients. Even well-intentioned pet owners can get sticker shock as routine care becomes more expensive. If a bill is larger than expected, a client may be unable (or unwilling) to pay in full, adding to your bad debt.
Changing client expectations: Many pet owners today expect more flexibility in paying for care. It’s become common to ask for payment plans or even try to negotiate costs. You might have clients who say a bill is too expensive and angle for a discount – perhaps something they wouldn’t dare do with other service providers. Wanting to keep clients happy, your team might allow delayed payments or waive certain fees, which cuts into revenue. And if a client doesn’t follow through on a promised payment, that account eventually turns into bad debt.

All these factors have made late payments and non-payments far more common in vet clinics. Understanding why it’s happening is the first step to tackling the problem.

The Impact of Bad Debt on Your Practice

Unpaid fees don’t just sit on your books – they can hurt your practice in several ways:

Financial strain: A bad debt level of 5–10% of revenue (which many clinics now face) is significant – that’s income you earned but never received. It can weaken your profit margins and even reduce your clinic’s value (one estimate warns £10,000 in unpaid fees could cut about £130,000 off a practice’s valuation).
Operational headaches: Cash flow suffers when too many clients don’t pay. Your practice might struggle to pay its own suppliers, lab fees, or staff salaries on time. Meanwhile, staff time spent sending payment reminders is time not spent on patient care, so efficiency drops.
Staff stress: Chasing money is uncomfortable for everyone. When vets or receptionists have to act as debt collectors, it can lead to frustration and burnout. These conversations take an emotional toll on your team.

Tips to Prevent and Manage Bad Debt

While you can’t control the economy or clients’ finances, you can take steps to reduce bad debt and handle it effectively:

Be transparent about fees: Give clients clear estimates and cost explanations before treatment. Many disputes can be avoided if pet owners know what to expect. Make sure your team is comfortable discussing fees up front (with empathy and clarity).
Set and enforce payment policies: Establish a clear payment policy (for example, payment due at time of service or a deposit for costly procedures) and communicate it to clients. Include these terms on forms or treatment plans that clients sign – a signed agreement “provides you with a backup” if they later refuse to pay.
Offer payment plans selectively: If a client cannot pay the whole bill immediately, you might agree to a short-term instalment plan or connect them with a credit service. Do this only with a formal agreement and for trusted clients. It’s better to get paid over time than not at all.
Follow up on overdue accounts quickly: Don’t let unpaid invoices linger. Send friendly reminders soon after a payment is missed – often a gentle nudge is all that’s needed. Debts addressed promptly are much more likely to be recovered than those left unaddressed for months.

Even with these measures, some debts will still occur. For those tough cases, professional help can make a big difference.

Considering a Specialist Debt Collection Agency

When you’ve done all you can in-house and still aren’t getting paid, a professional debt recovery agency can step in to help. Specialists like DSL (who focus on veterinary practices) typically recover debts more effectively – often by acting quickly – and they spare your staff the stress of chasing clients. Importantly, they handle collections with tact, so you can maintain client relationships while still getting paid.

Conclusion: Bad debt may be on the rise, but with proactive management and the right support, you can keep it from undermining your practice. By communicating clearly, enforcing payment policies, and bringing in expert help when needed, you’ll protect your clinic’s financial health. Don’t let unpaid invoices pile up – if your practice is struggling with bad debt, consider seeking professional help with DSL – to get back on track.