Why You Need a Pharmacy Specific CFO
Growth increases the complexity of pharmacy accounting. This makes working with a CFO with pharmacy experience critical for your independent pharmacy’s continued growth. CFOs with pharmacy experience understand the metrics and pharmacy KPIs. In this video, Scotty Sykes, CPA, shares the benefits of outsourcing your CFO role versus hiring an individual directly and some things to look for in that relationship.
If you prefer to read this content, the video transcript is below.
Why would a pharmacy wanna look at a CFO and if you’re going that route are you gonna hire or you gonna outsource that role? First of all, outsourcing generally speaking, is the way to go if you’re looking at adding a CFO in your pharmacy operations. The outsource option is affordable, you’re able to use technology, you’re able to find CFOs who have nothing but experience in pharmacies.
So the benefits of outsourcing are pretty significant as compared to hiring someone in house, that maybe is coming from manufacturing that has nothing, that has no idea what pharmacy is or the industry itself because then you’re gonna have to train them, teach them and et cetera. So high outsourcing is typically the way to go when looking at a CFO position.
Now, when determining what’s a right CFO for you, obviously industry experience is critical, is pretty much the top thing you wanna look for but of course you wanna look for, you know, responsiveness, you know, are they proactive? Are they kinda looking forward the whole time, they’re not reactive. A lot of times you’ll find some CFOs who are somewhat reactive, they get the information, they analyze it, and they tell you what it means. Well, that’s half of it, the other part is taking that information and projecting forward and being proactive.
Well, a good CFO is going to have some accounting experience, they’re gonna be able to analyze financial statements, compare your financials, compare your numbers, your cash flow, your profitability to your peers, your margins, be able to understand the industry. I mean that’s very important. What are DIR fees? Why is my margin the way it is? How is this specialty that I’m getting into, gonna impact my overall financial performance? What is DME and how do I need to set that up and you know, are my prescriptions taxable or not in the state I’m working in? So just, the list can go on and on as far as what to look for but it obviously, the industry experience is gonna be critical. You know, what KPI’s does my CFO need to be aware of when analyzing my pharmacy? Do they work with other pharmacies and if so, you know, how am I comparing there? And just again, the list can go on and on, on what those advantages are of having a CFO who knows what they’re doing and has that industry experience.