Fixing Your Independent Pharmacy Accounting Mystery
Is the accuracy of your independent pharmacy financial statements a mystery? Maintaining monthly accrual-based financial statements helps to ensure that your accounting information is up-to-date and accurate. Ollin Sykes, pharmacy CPA, describes the information you will want to collect monthly to better support future business decisions.
Accurate bookkeeping can also better support your independent pharmacy with tax planning. Learn more about our tax planning support.
If you prefer to read this content, the video transcript is below.
Ollin: An independent pharmacy not having accurate information suggests to me that they’re running their pharmacy out of a checkbook or their bank balance. And nothing could be further from how an entrepreneurial pharmacy in today’s marketplace should be operating.
If a pharmacy does not have accrual-based financial statements monthly with third party receivables adjusted, with perpetual inventory adjusted, all payables and notes adjusted correctly. Of course, banks adjusted. If that information is not adjusted correctly then the profit wall schedule that you’ll look at in your QuickBooks file is not going to contain accurate information. And you will be operating essentially only with your bank balance. And that doesn’t give you an indication of what your pharmacy, how well it’s performing by any stretch of the imagination.
So, we highly recommend that your integrity of your financial reporting system be upgraded to have accrual-based fundamental financial information. Again, with this key balance sheet items adjusted monthly, not annually but monthly, and that you should have the advice and counsel of those that know what they’re speaking about with respect to accounting and pharmacy to advise you about this process.