Managing Pharmacy Overhead and Expenses
Pharmacy inventory, payroll and DIR fees are the three biggest expenses that community pharmacies typically incur. In this video, Megan Perry, CPA and Kathy Blanchard of Sykes & Company, P.A. share a few ways you can manage overhead and expenses in your independent pharmacy. They also discuss how technology can be incorporated to help manage these expenses.
If you prefer to read this content, the video transcript is below.
What is a pharmacy’s most critical overhead or expense?
In our experience, inventory and payroll and DIR fees are the three biggest expenses that a pharmacy incurs. With payroll, it’s important to understand how to schedule your staff for maximum efficiency. Getting to know the patterns in your stores, what days of the week, what times your store is busiest can help you to maximize the number of hours your staff are in the building to serve your customers.
And when it comes to a pharmacy’s inventory expenses, it’s all about how well you buy your inventory and how fast you can turn it. The latest NCPA Digest released shows that the average pharmacy is turning their prescription inventory 12.3 times a year. And it’s also about your mix of generics and brands and about adding the right tertiary products and services for your patients. You don’t want to add something that you haven’t done research on. And you also want to make sure you ask your advisers and local healthcare providers before you add something.
Also, technology investments can help maximize your payroll expenses and increase efficiency. So the question is can you afford to add new services or new technology? That research tool is important.
What technology can a pharmacy incorporate to help manage expenses?
While technology and equipment can be a larger up-front expense, it can quickly pay for itself by creating greater filling efficiencies, lower payroll expenses, and reduced risk. For example, patients can call in their prescription after hours. There are some robots that will process that prescription or refill overnight and have it ready in the morning for the pharmacist to review before putting it the bottle. In addition, some robots take a photo of the prescription before it goes in the bottle, which reduces the risk to the pharmacy. When investing in robotics, it’s important to be sure the pharmacy has the volume to support the investment.
And here at Sykes & Company, we can advise the pharmacy on how to position for major investments and make sure that it’s a good fit for your store.