Start-up pharmacists have a lot on their plate to run a successful operation, but some daily duties and responsibilities are critical. From setting up a perpetual inventory system to confirming bank deposits and monitoring refunds at the register, details matter when managing your operational costs.
In this video, Ollin Sykes, CPA.CITP, CMA, and Bonnie Bond, CPA, share stories of start-up pharmacies that experienced unintended costs and losses. Their simple tips will help you manage your operational risks while gaining efficiency through a perpetual inventory system and outsourced payroll.
CTA: Sykes & Company, P.A. offers an entire series on start-up pharmacy topics and operational guidance. View a variety of articles and videos here.
If you prefer to read this content, the video transcript is below.
What are some signs of a well run, start-up pharmacy?
Bonnie: So from the very beginning it’s really important to make sure that a few operational things are in place when you open the store, one of those being perpetual inventory. It’s very important that the pharmacy understand how it’s operating. And one of the key things with that is to know exactly how much inventory you have on the shelf. And to do that you really need a perpetual inventory system in place, so that you can track that information and you can pull a report at any point in time and be able to figure out what that value is.
Again, working with a CPA that works with pharmacies, you can use that information to make sure you have up to date, real time information so that you can monitor how the pharmacy is operating. Because if you don’t have that accurate information, you’ll have no idea of your inventory value. You won’t have any idea about your gross profit for the pharmacy and therefore the bottom line. So it’s just really important to make sure that you start that process from the very beginning when you open the store. In addition to that, having an accounts receivable third party reconciliation service is also very key. And it’s important to start right from the ground up. These services are inexpensive. You can have these put in place from the first script you fill. It just keeps, it makes it easier on the owner to make sure that these…having a weekly reconciliation service to make sure that all the claims, that you’re collecting all the money that you’re filling the scripts for.
What should the pharmacist watch for regarding deposits and point of sales?
Ollin: And Bonnie, I think also adding to the importance of the perpetual inventory system and the third party reconciliation system for the receivables — those are key items without question — are the daily cash controls.
Ollin: With at the register, at the point of sale registers and with the bank. There needs to be daily bank deposits period. You may think it’s too small, you may think you can just wait and do it once a week. But the money needs to get into the bank each and every day. You need to verify that if a third party is putting money in the bank, that you’re going online and checking those deposits have been made, intact with what the deposit slip was when it left the pharmacy. We’ve seen numerous situations in embezzlements when the pharmacist has not been checking on this. It takes 10 seconds to check it once a day to make sure that deposit got in intact.
Ollin: And those hundred dollar bills are not removed as it went across the street. That’s critical. Another thing operationally is important is on refunds. The register you might think that’s not a big deal. But the PIC and or the PIC owner needs to approve any and all refunds at the register. We’ve seen, saw one situation where over $50,000 was removed when a clerk was giving refunds out to one of their friends over the course of three months.
So each and every refund in that point of sale system needs to have some type of verification ticket in that register, to say that the owner/PIC has approved it. Also one other quick item, accounts payable. We like to use cloud based systems for everything we do. And there are numerous accounts payable systems that will allow you to track and pay bills electronically. I’m not talking about bill pay systems through banks. That’s not what I’m talking about. I’m talking about workflow systems that are out there on the marketplace that allow you to just handle, cut down time 75 to 80% on the processing of payables and linking everything up. And then that ties very closely into the payroll mechanism.
Why is outsourcing payroll a good idea?
We outsource all payroll for every pharmacy across the country that we deal with, with some of the national payroll providers. We think payroll needs to get out of your pharmacy. We think payroll should be electronically paid. No, no, not weekly, but every other week or twice a month. One exception for one person saying that I don’t have a bank account doesn’t work. That person needs to get a bank account or they need to get a prepaid debit card that you can receive from the, from the payroll providers. But having these systems in place for a successful start-up is very important. And these are all baseline systems that we’d like to put in and make sure you have in place, as you begin as your journey with a start-up pharmacy.