Once you subtract your cost of goods sold from net sales you are left with gross profit. If you take gross profit and subtract operating pharmacy accounting expenses (payroll, utilities, taxes, etc.), you will be left with net income, also known as net profit. You can also calculate gross and net profit as percentages (also called margins).

Pharmacy Accounting Services to Guide Your Profitability

Learn more about the ins and outs of pharmacy ownership from the experts at First Financial Bank. You have access to an executive team to help guide you on everything from daily operations, cash flow, new lines of business, personnel, cost control, and much more at a fraction of the cost. We formulate a tax strategy throughout the year based on your individual situation. This allows us to create and provide you business tax returns quickly and accurately. This is a great starting point to see what you’re doing—or aren’t doing—compared to other pharmacies. “Instead of waiting, you need to be proactive now,” said Scott Sykes, CPA, of Sykes & Company, P.A., an accounting firm focused on independent community pharmacies.

Pharmacy Accounting, Data Dashboards, Taxes, & Management Consulting

By prioritising regulatory compliance, you safeguard your pharmacy’s reputation and ensure uninterrupted operations, allowing you to focus on providing quality customer care. Monitoring KPIs helps you stay informed about your pharmacy’s performance and guides you in making strategic adjustments to enhance profitability. Effective inventory management is critical in a pharmacy setting where managing stock levels and expiry dates can be complex. Accrual accounting is preferable for most pharmacies as it offers comprehensive financial insights, helping you plan and make informed decisions effectively.

• Accrual accounting is preferable for most pharmacies as it offers comprehensive financial insights, helping you plan and make informed decisions effectively.
• Let’s work together to achieve your business goals and make your pharmacy successful.
• Most of the time, pharmacy owners will reflect the discount at the POS but not in their Kroll or Fillware report.
• Tracking all the moving pieces that go into developing and distributing pharmaceutical products means processes must be efficient and precise.
• We hope you find value in them and of course would be happy to discuss these topics with you.
• Prepaid expenses aren’t liquid in the same way as your other current assets, but the prepayment frees up cash for other uses.
• Incorporating technology into your accounting practices can greatly enhance efficiency and accuracy.

Webinar – How Pharmacies are Modernizing the Customer Experience to Lower Costs and Drive Growth!

FreshBooks accounting software allows you to set up billing schedules so your clients can pay for prescriptions automatically and securely by credit card, without having to think about it. Your clients save time and your pharmacy gets the financial security of knowing exactly when Bookkeeping for Painters payments come in. Pharmacies need a steady cash flow to pay their expenses and cover payroll. FreshBooks makes it easier than ever for clients to pay their invoices, so you don’t have to waste time chasing down payments. Get paid 11 days faster with convenient payment solutions that work for your pharmacy and your clients. These daily processes and technologies allow an experienced pharmacy CPA to make the necessary accounting and tax adjustments at the end of each month.

Bookkeeping Software Built for Your Pharmacy

Outsourcing your pharmacy accounting services lets you benefit from the experience of experts, and lets you focus on your core strength – providing superior pharmacy services. While normal balance another type of business may have inventory, the added controls, requirements and other considerations that pharmacists need to address for drug inventories is much more rigorous and complex. Outsourcing accounting functions to experienced professionals ensures compliance, accurate bookkeeping, and efficient tax management. A pharmacy must track salaries, taxes, benefits, and overtime to ensure proper payroll accounting. For managers and leaders, you’ve already proven your ability to handle the day-to-day responsibilities.

Performance Dashboard

Staying in compliance with tax laws while making smart choices to minimize your tax burden is essential to keeping your business healthy. Pharmacy Information Request ListA listing of the documentation independent pharmacies should compile when meeting with their CPA for the first time. Get your questions about the financial side of your independent community pharmacy answered with these helpful websites. Many owners shy away from this because pharmacy school didn’t teach proper business fundamentals, and just want to focus on helping their patients.

Accounting Basics for the Pharmacy Manager

Your accounting should include technology enhancements to streamline your efforts and to make your accounting more efficient, timely, accurate, and transparent. Also, the CPA industry is moving toward a more niche-based service model, which will make it easier—and prudent—to find CPAs who specialize in pharmacy accounting. We talked with Sykes about what CPAs wish independent pharmacy owners knew and what questions owners need to be asking their CPAs. Let’s say you own a coffee shop and you want to prepare the income statement for December 2016. You need to figure out your Cost of Goods Sold — how much you spent on the coffee you sold that month. Let’s also say that on December 1, 2016 a pound of coffee costs you $6, but on December 31, 2016 a pound of coffee costs you $7.

From Our Clients

• Automatically organize expenses, track time and follow up with customers.
• A streamlined system, with a good workflow, and reconciled and synchronized numbers on a daily basis is critical.
• Payroll is the largest expense after drug costs, but what is the proper payroll level for my type of store and my volumes?
• In traditional accounting roles, tasks such as examining financial statements, preparing and filing tax returns, forecasting, risk assessment and bookkeeping are par for the course.
• Wages PayableUnless you pay your employees every single day, you’ll have to account for wages payable on your balance sheet.

Using pharmacy-specific accounting software can streamline bookkeeping, sales tax tracking, and inventory reconciliation. Accounts PayableAccounts payable are typically the largest current liability a pharmacy carries. When you purchase inventory for your business, the supplier hands you an invoice that tells you they must be paid in a specific time frame (usually 30 days). Until you pay for the inventory, you are temporarily in debt to the supplier, which makes accounts payable a liability. They include everything the pharmacy owns that make it possible for the business to turn a profit — from the equipment that helps you fill prescriptions to the cash used to buy inventory.

Use Financial Statements for Strategic Decisions

“You’re lost from a managerial perspective without a good grasp of your gross margin,” Sykes said. A lot of pharmacies give discounts to patients by reducing some or all of their co-pay amounts. Most of the time, pharmacy owners will reflect the discount at the POS but not in their Kroll or Fillware report. Having a good accounts receivables system from a specialized accountant can help you track the amount of discounts you are giving patients throughout the year.