Independent Pharmacy Accounting

How it All Began with Ollin Sykes, CPA.CITP, CMA

We get asked all the time about how Sykes & Company, P.A. got started, so we invited Ollin Sykes, CPA.CITP, CMA – the pioneer himself – to tell us how it all began.

Join Ollin, Bonnie Bond, CPA, Kendell Harris, CPA and Scotty Sykes, CPA, CFP® on this episode of The Bottom Line Pharmacy Podcast as they talk about how Sykes & Company, P.A. grew their niche assisting independent pharmacies nationwide.

The Bottom Line Pharmacy Podcast is your regular dose of pharmacy CPA advice to fuel your bottom line featuring pharmacists, key vendors, and other innovators. Stay tuned for future podcasts airing soon wherever you subscribe to podcasts.

As always, ask Sykes if you have any questions pertaining to pharmacy accounting.

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If you prefer to read this content, the video transcript is below.

Kendell: So, we have a special guest today that we are highlighting: none other than Ollin Sykes, CPA.CITP, CMA. Ollin, we can see that you are real happy to be on the podcast today. So, we just started to have fun with it.

Bonnie: Ollin, we know you are ready to get your day started for work and help some pharmacies, but we are going to have a good time today.

Kendell: Be in a good mood.

Ollin: There you go. Absolutely, always.

Kendell: So, we just wanted to highlight you and learn a little bit about yourself, your history, and everything that is going on. To kind of kick it off, Scotty, you said you wanted to talk about the travel, trade shows. Ollin, any big highlight from all the travels?

Ollin: Any big highlights?

Bonnie: Or takeaways. Anything you have learned from the trade shows over the last six, seven weeks you have been on the road.

Scotty: What are your trade show takeaways this year? If you had to pick three.

Ollin: That pharmacists were certainly eager to get back out on the road, not only with themselves, but also with their families. Obviously, the events at Disney World, excuse me Orlando, brought the kids to Disney World, the Amerisource event, of course, the D.C. event, McKesson and Vegas, as always Vegas, for Cardinal. These bounce around year by year. But obviously technology is center stage. Everyone is looking for employees that they cannot find, and when they find them, they cannot afford to pay them what they are being asked. There is a lot of job hopping going on within the industry. But I would say that center stage is the equipment and technologies out there that can be a fixed cost that does require investment on the front end. Those that are not doing it definitely need to be doing it, those that are just filling scripts, or looking at other income areas of clinical services. But those are the kinds of things I think we saw at the trade shows, is something that I can remember.

Scotty: Yep, that is a good takeaway, I think we had that same takeaway as well. But especially technology, when you think pharmacists are being asked to do more, staff are being asked to do more beyond filling scripts, technology has to fill that role to free up that time. Well, let’s move on here. Dad, tell us a little background about how you got started in accounting and pharmacy in particular. Everybody, that is an interesting question you hear sometimes, or we hear as well, how did we get started?

Ollin: Long story short, when I graduated from Mars Hill University many moons ago, I went to Virginia Tech to get into the master’s program of accounting. I go to the master’s program and what I learned is everybody who was there was a.) going to be an auditor, b.), going to go to D.C., because that is where most of the students went when they graduated was to the D.C. area. And I knew, kind of, at that time, that a.) I did not want to be an auditor, and b.) I did not want to go to D.C.

So, I stayed in that program about six months. I lived in a place in Blacksburg, called the University Club, which was kind of an old, huge B&B where a lot of graduate students lived. I enjoyed that, but I just said, “Nah, this ain’t for me.” So, I quit, came back to my hometown of Raleigh, where I grew up, picked up the “Raleigh News Observer” one morning, and saw an ad in the paper for an accountant at a firm in Glenwood Village in Raleigh. I made a call, went down there the following Monday morning, and the gentleman, Doug Holland, hired me on the spot and said, “Okay, start two or three days from that point, and we are going to take you to Edenton where we have some audit work going on with Chowan County.” So, I said, “Okay.” So, I came to the fair town of Edenton, which is where we are today, and worked on that audit during the summer.

Scotty: And we do not do audits.

Ollin: And we have not done audits in 35 plus years, but that is how I got started here. And they had just moved a gentleman down here by the name of J.P. Timberlake, who unfortunately is no longer with us today. And after that summer of commuting between Edenton and Raleigh, which at that time was about a three-hour drive, on weekends, they said, “Well, why don’t you just move down here?” And I had an MG Midget at that time that I bought when I was in school, and that little MG Midget and I did a fair amount of traveling.

And when I moved Edenton, then one of the very first accounting jobs that Mr. Timberlake put me on was doing bank reconciliations for the pharmacy across the street, Mitchener’s Pharmacy, which is no longer with us today. They actually sold out to CVS years ago, but there was a gentleman there by the name of John Mitchener who had a manual accounting system, which is to say he checks three-to-a-page. He wrote everything on stubs. And end the month, I would go get the check stubs, the bank statements and cancel checks, and I would reconcile the bank account and enter the information into what we called DP at that time, data processing. I noticed that-

Kendell: This is why you love QuickBooks so much, because of that experience of doing the manual things.

Ollin: QuickBooks was not even a thought at that time by anybody. There were pretty much some mid-level software as that at that time, but I cannot even remember what they were. I do remember this pharmacy had some pretty good margins, like in excess of 60%, and I thought to myself, well, you know, that is pretty good. And, of course, this gentleman had his own way of accounting. He was ex-mayor of the town, and it was like a multiple-generation pharmacy. And just learned a lot from this gentleman about pharmacy, certainly not much about accounting from him. But that was the very first incident that I had in dealing with accounting and pharmacy.

Scotty: So, that is how you got started in pharmacy accounting. And then from there, kind of explain how we went, grew from there and went regional, and expanded the pharmacy accounting.

Ollin: Yeah, then once I had that experience with the Mitchener Pharmacy, another pharmacy down the street, who is still a client of ours today, Blount’s Pharmacy engaged us. And actually, I lived right across the street from that gentleman, Jim Blount, who is still a very good friend of mine today.

Scotty: A very good pharmacist.

Ollin: His daughter is the pharmacist there. Yeah, and his son is now an orthopedic surgeon in Raleigh area, who is a good friend of one of my oldest sons, Chris. And, ultimately, he got us to the buying group of NC Mutual Drug, which was a regional wholesaler at that time, and still is today with about 500 plus stores in the Carolinas, Virginia and West Virginia. And there were some people there that began to recognize what we were doing, and said, “Well, hey, can you fix some problems we have at some pharmacies that we have issues with that have cash flow problems?” And we said, “Sure, we will be glad to try.”

And they sent us to a group of pharmacies in Elizabeth City that was having some issues. We were able to fix those issues and get the pharmacies cash-flow positive. And those pharmacies flourished until they sold out just last year. So, that was about roughly 50 years, give or take, no 40 years, give or take, that those pharmacies flourished and grew. So, the Elizabeth City pharmacies that we helped actually just sold out last year to a big box. But in the meantime, we started working with some other pharmacies in eastern North Carolina, and other pharmacies through the state that were in the NC Mutual system. And that went on for 15, 20 years, and actually a bit longer. And our firm was involved in a whole host of activities at that time.

But more and more, we were picking up pharmacies across the state and actually started going across lines in some cases, like in South Carolina. And fast forward a little bit until about 2010, 2011. And that time we met with the Live Oak Bank personnel, I cannot remember how we actually met them, probably a trade show…

Scotty: I will tell you how we met them.

Ollin: I think it was, how we met them.

Scotty: He was in a, they had a front-page ad in the NCPA Digest, and they were listed in Wilmington, and we had a road trip…

Ollin: We reached out to them, didn’t we?

Scotty: So, we stopped by and lined up lunch.

Ollin: That’s what we did. And so, I remember us eating on the river down there one day for lunch. It was with Jimmy Neil, was it not?

Scotty: No, it was with Brian, Brian Faulk and Chad, maybe?

Bonnie: Brian, Brian Faulk.

Ollin: Yeah, Brian Faulk. I think maybe was. So, ultimately, we got involved through their help, and then with NCPA, with the Ownership Workshop Program that NCPA sponsors three times a year, typically, sometimes they have done it four times a year all over the country. And we started speaking there in 2011. I remember it was August of 2011 in Minneapolis. And we have further met them, and other vendors in the industry, and other specialists in the industry that were working. And we began to take on more pharmacies. And, obviously, over the last 10 or 12 years, it has grown much more dramatically. And to the point that today we are 100% doing nothing but retail, independent pharmacies, their owners, and the entities that they own, like real-estate activities, that many of them are involved in for their stores.

Bonnie: I want to say, Ollin, that year, 2011 in the fall, that was our first NCPA trade show there in Nashville.

Ollin: Yeah, I cannot…

Bonnie: Was our first big show.

Ollin: I cannot remember whether it was in… it might have been 2011.

Bonnie: I believe it was.

Ollin: But yeah, we started attending trade shows…

Scotty: You want to talk about travel.

Ollin: At the national level.

Scotty: That very first trade show, that is when I drove across North Carolina.

Bonnie: That was a rookie travel. We flew and you drove the banner.

Scotty: And I drove with this 12-foot pole in the car over a mountain into, what was it, Nashville? I tell you what.

Bonnie: Oh, man.

Ollin: Yeah, Nashville.

Kendell: Oh, wow.

Scotty: That was rough.

Bonnie: We are glad that you took one for the team, Scotty. We all flew there direct.

Scotty: Never do it, that was terrible.

Bonnie: And you drove the banner in for us.

Kendell: I have never heard any of these stories before.

Bonnie: You have never heard this… man, we have come a long way.

Kendell: I have been here for five years.

Bonnie: Since 2011.

Kendell: So, this is exciting.

Ollin: We started back then going to multiple trade shows a year, getting ourselves invited to speak. It is a slow process because we learned that when you speak at a trade show, it affects the number of folks that come by your booth. And obviously now, we desire to only go to trade shows that we do speak at, so that we can hopefully draw larger crowds. And obviously during all this period of time, we worked on social media platforms, webcasting platforms, webinars. Now we are doing these podcasts. We have got some really fine…

Kendell: I have something for you, Ollin.

Ollin: Okay.

Kendell: I got something for you.

Ollin: All right.

Kendell: So, you said around that time.

Bonnie: It’s always scary when he says that.

Ollin: Oh, Lord.

Kendell: 2013.

Bonnie: Man.

Kendell: Some things do not change.

Ollin: Is that from-

Kendell: Yes, you still have the headset.

Bonnie: That is Rachel.

Ollin: That was Rachel. I remember her.

Kendell: Look at this brick background.

Bonnie: I forgot about that.

Kendell: And this is good stuff. Yep, so this is throwback, Ollin. So, you have been doing the videos for about 10 years.

Ollin: 10 years.

Kendell: No doubt something that was going to help grow you. And I know just that recently at a trade show you did some videos on PPP, and the kind of feedback you get from people we meet about the power and the impact that these videos have had on them is amazing. What you all are doing for the pharmacy community just by producing these YouTube videos…

Bonnie: Yeah, Ollin was doing videos before people were really doing videos.

Ollin: Yeah, we were.

Bonnie: Yeah, he is the pioneer.

Ollin: Yeah, we started using ooVoo, I remember that.

Scotty: ooVoo.

Bonnie: Yeah, it is funny.

Ollin: But it has been a long road, and, obviously, we have an excellent team of folks, like folks on this call here, and others that we have here inside the company, and having good leadership here. About seven years ago, we hired a chief operating officer, a young lady who has helped us take it to a whole other level. Her name is Sue Osborne. She is with us today. And she is able to help take care of the business affairs in the firm and coordinate some of the marketing activities from the outside with Ingenuity Marketing Group, a group we use out of Minneapolis. But we have had some really good folks working with us that make what we do possible.

Scotty: That is absolutely correct.

Kendell: Yeah, people here are amazing.

Scotty: I guess we are getting kind of towards our hour here, guys. We usually wrap this up with the bottom line. What is the bottom line takeaway? And so we will start with you, dad. What is your bottom line for you today?

Ollin: The bottom line takeaway is the industry is changing pretty dramatically. It has gone away from a fill-the-script industry to clinical services with using a lot of technology. The opportunities in pharmacy, I think, are as good if not better than ever before, even though the reimbursement and the DIR fees situation is really tending to offset some of the positives that are taking place in the industry. Obviously, COVID had a major impact. PPP money has had a major impact. Some of the EIDL funding from the SBA during COVID had a huge impact. It still does today. But I still think that pharmacy has a really good opportunity to be the help center for many small rural and suburban areas of this country that we see, that they are affected.

Scotty: Could not agree more. Well, all right.

Bonnie: Thank you, Ollin, we appreciate it.

Scotty: Great job. Thank you, bye-bye.

Bonnie: Thank you guys.

Ollin: It has been my pleasure.

NEXT VIDEO – FINANCIAL ESSENTIALS: YEAR-END PHARMACY ACCOUNTING STRATEGIES

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