Establishing Your Community Pharmacy Accounting Best Practices

First Financial Bank
Nov 4, 2022
If you are looking to buy or start your own community pharmacy, establishing your accounting processes and procedures are key to your future success. But you can’t do it alone.

Owning and operating a community pharmacy has its own unique challenges, especially in managing financials. Your accounting processes and procedures need to accommodate a variety of revenue and expense streams, insurance reimbursement processes, and with increasingly complex internal controls required to be effective, efficient – and compliant.

To leverage the best accounting practices for pharmacies and create an accounting infrastructure that works for your business, you’ll need help.

Finding Expertise

There are many great financial consultants out there: accountants and tax specialists who are hardworking, ethical, and with many years of experience. But you need someone who specifically understands the sophistication and intricacies of community pharmacies, in addition to having stellar accounting skills. There are two potential options: find an accounting firm that specializes in community pharmacies; or find a consulting firm that specializes in providing operational guidance and support, including accounting, for community pharmacies.

Specialized Accounting Firms

You may have a long-standing relationship with an accountant for your personal finances, but it is unlikely that, no matter how good they are, that they will understand this business. But there are firms that are focused on pharmacy accounting. They understand:

  • How benchmarks such as WAC, AWP, and AAC influence what you charge and are reimbursed for pharmaceuticals;
  • What the reimbursement process can do to your cash flow and ways to mitigate the negative effects;
  • The appropriate options for minimizing your tax commitment;
  • How to assess the financials for a pharmacy you are considering acquiring; and,
  • All the “usual” things an accountant can do for you – process invoices and payments; file tax returns; and help you establish internal controls.

When looking for accounting firms specializing in community pharmacies, check with one or more of these resources:

These resources will have professional contacts or members that can help you identify specialists and/or help you understand how to assess a potential accountant’s expertise.

Consulting Firms Who Specialize in Community Pharmacies

In addition to providing specialized accounting services, a consulting firm specializing in community (or independent) pharmacies can provide you with other services, experience, and training to help you optimize your business processes.

Consultancies such as Independent Rx can be there to support you for the lifecycle of your business. From identifying a potential acquisition through the start-up phase and ongoing management – and ultimately to selling the business to its next owner. Along the way, they provide services to augment your team, plus guidance and training (including CE credits) for you to acquire the expertise you need to run your business effectively. Having both operational and accounting experience in community pharmacies, these kinds of firms can be a valuable resource to you.

Getting Started

As you start to consider your options, begin by reaching out to your current trusted advisors for their insights and recommendations. They can help you assess your specific requirements and what type of help you will need to establish and address your community pharmacy’s accounting and operational needs.

Want to discuss your plans? Let’s chat!

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