In-House vs Outside Lab Revenue: What AAHA Benchmarking Actually Wants
'Laboratory' isn't one number. The AAHA/VMG Chart of Accounts splits in-house from outside reference lab on purpose, and that split tells you where your real margin (and your real inventory) lives.
If you lump all of your lab work into one "Laboratory" line, you're hiding one of the most useful numbers in your practice. Because in the AAHA/VMG Chart of Accounts, the public best-practice framework behind clean veterinary categorization, the Laboratory revenue center is deliberately split into two very different things: in-house lab and outside reference lab. They look similar on an invoice. Economically, they're night and day.
Why the split exists
The two kinds of lab work behave nothing alike:
- In-house lab is work you run on your own analyzers. It carries real inventory (reagents, cartridges, slides, controls) and real equipment cost, but once that's covered, the margin on each result is strong. You control turnaround, and you control cost.
- Outside reference lab is a pass-through. You send the sample out, the lab bills you, you bill the client. There's little to no inventory and typically a thinner, more fixed margin, because you're reselling someone else's capacity.
Roll those together and you get a blended "lab margin" that's true of nothing. Split them, and you can finally see which side of your lab is actually making money, and where.
The AAHA Laboratory revenue center, simply
At the top level, AAHA separates In-House Laboratory revenue from Outside Reference Lab revenue. You don't need the full accountant's chart to benefit. You just need to stop treating "lab" as one undifferentiated bucket.
What the split tells you
Once your lab revenue is split, a few decisions get a lot more obvious:
- Are you sending out what you could run in-house? If a high-volume test is sitting in your outside-lab bucket, you may be paying pass-through margin on something your own analyzer could do at a better return.
- Is your in-house equipment earning its keep? In-house revenue against the reagent and equipment cost tells you whether an analyzer is pulling its weight.
- How do you compare? Knowing your in-house-vs-outside mix lets you benchmark against industry norms instead of guessing, which is the whole point of using a standard chart of accounts in the first place.
The inventory angle StockSolve cares about
Here's where this connects straight to your stocking math. In-house lab supplies are trackable inventory. They have a cost, they run out, and they belong in your reorder analysis. Outside-lab send-outs are not. They're a service pass-through and should stay out of it (more on taming those in IDEXX vs Antech: cleaning up your outside-lab line items).
A common, costly mix-up
If your in-house reagents get categorized as a "service," or your outside send-outs get treated as inventory, your reorder points and your shelf valuation both go wrong. Categorize the two sides correctly and each flows to the right place: in-house supplies into your ordering math, send-outs into your services.
Get the split without the spreadsheet surgery
You can separate these by hand, but it's exactly the kind of line-by-line sorting nobody on the floor has time for. StockSolve's free Setup Assistant does the first pass for you, tagging in-house lab supplies as trackable inventory and grouping outside send-outs under your reference lab, then hands you a quick review. It's built on AAHA's public best practices, so your lab lines come out organized the right way, and the rest of StockSolve just works. Your raw data and prices never leave your browser.
Curious what clean categories do to your real numbers? Run a free baseline audit and see the cash sitting on your own shelves, calculated right in your browser.
StockSolve is an independent software provider and is not affiliated with AAHA, VHMA, or any veterinary organization. The AAHA/VMG Chart of Accounts is a public industry standard.
Written by
Neil Leinen
CVPM, Multi-Site Director of Operations
Neil Leinen is a Certified Veterinary Practice Manager who spent two decades on the practice floor before building StockSolve. He writes about the practical math behind running a calmer, more profitable inventory.
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