4 Pharmacy Accounting, Tax Tips

FreshBooks offers the accounting tools you need to easily manage your books. Automatically record business expenses by linking your business bank account and credit card. Easily record your employees’ work hours with simplified time tracking.

  • Going far beyond the standard accounting and tax services, our CPAs specialize in several industry areas and are in tune with the opportunities and challenges faced by each.
  • Your payroll system will automatically deduct federal, state and local taxes so there are never any errors on employee paychecks.
  • The FreshBooks mobile app lets you work on your business finances on the go, whether you’re running a report on the bus or tracking inventory while out of town for a conference.
  • We’ll also touch on how to read your financial statements and discuss the key pharmacy performance indicators you need to know.

IRx Accounting prides itself on the timely and accurate delivery of your financials – every month. We often hear from pharmacists who are frustrated due to the very late or almost non existent financial free invoice templates for contractors reporting they receive. IRx Accounting promises monthly delivery so you can make timely decisions. Get started using simple cloud-based accounting software for your pharmacy with a free 30-day trial.

I think most of us hear these terms a lot in meetings about our pharmacy’s financial performance so I wanted to clear them up. Sales revenue is the total amount in sales that you have generated before any deductions; net sales is sales revenue minus allowances, returns, and discounts. 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 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). Once you have cleaned up the accounts to date and have a solid foundation to start with, the next step is to implement daily and monthly processes so you do not fall behind again.

The CFO advisory for pharmacies we offer includes tax planning for pharmacies, an explanation of financial statements, and general accounting. As a CPA for pharmacies, we can help you look at your current accounting methods and recommend changes to minimize liability and increase revenue. Cash basis accounting is where revenue and expenses are recorded during the period where the cash was actually received or spent. There may be times when a pharmacy needs to make large expenditures for products that will not be sold until a future date.

“Accenture Reports Strong Financial Results for Q3 FY2023 with Revenue Growth and Increased Earnings”

Budgeting and forecasting are pivotal to ensuring the growth and sustainability of any pharmacy business. It seemed like every month that I was having meetings at work I was hearing terms and concepts I had just read about. Additionally, via your personal data dashboard, we also provide notable highlights and insights each month to explain significant financial changes in your business. We can also refer you to companies that can help you with marketing, claim reimbursements, financing and other aspects of running a successful pharmacy business. With the right strategies and a partner who understands the nuances of the pharmacy industry, you can set your practice up for long-term success. By analysing past trends and current data, you can predict future sales, identify potential challenges, and plan accordingly.

We’re obsessed with giving pharmacy owners exactly what they need in order to manage their books with ease. That’s why our accounting software now includes double-entry accounting – an industry standard feature that helps you keep all of your debits and credits in check. 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.

Pharmacy Accounting Services to Guide Your Profitability

Your payroll system will automatically deduct federal, state and local taxes so there are never any errors on employee paychecks. Cloud accounting software can alleviate the headache of managing large quantities of stock, tracking expenses and even analysing demand. By forecasting these trends, pharmacies can ensure they have adequate funds during lean periods and can invest surplus during peak times.

Typical best practices for inventory management include buying better, frequent cycle counts with a perpetual system in place as well as biannual actual physical counts. These processes will give you solid data points and historical trends to help your pharmacy CPA make better accounting adjustments on your books. This will give you confidence in your accounting and financial statements. Once you have an understanding of your current accounting system, take advantage of any technologies or processes to improve the accounting back office. Furthermore, having timely and accurate information will open the door to proactive tax strategies you will not be aware of with a reactive accounting system.

Cashflow management

Sykes has empowered hundreds of pharmacies across the country to boost their profitability and bottom line by helping them improve performance across multiple facets of their operation. American Pharmacies is proud to have partnered with Sykes on a series of higly informative webinars aimed at empowering our members to take charge of their pharmacy finances. Once your tax returns are reconciled to the books, which can be extremely complex, the next step is to start reconciling the balance sheet. This involves going through each and every balance sheet account and reconciling, which can be quite complex depending on the condition of your books. For example, you may be several years behind in bank reconciliations or you may have several dozen outstanding checks that have not cleared your bank account.

The list of potential issues can go on and on, but making sure each account is reconciled is crucial to updating your accounting foundation and bringing integrity to the system. Staying in compliance with tax laws while making smart choices to minimize your tax burden is essential to keeping your business healthy. We provide a full array of tax services from Tax Strategy & Planning to Tax Preparation & Filing.

The Power of Financial Literacy: Key Financial Issues Founders Should Know Before Starting a Business

Technologies may include cloud-based options such as a hosted accounting file, automated bill paying process and workflow, as well as outsourced payroll processing. The old way of doing accounting is out the door; update to technologies that allow you to stay current and proactive. In order to address the many complex areas of pharmacy accounting, it is vital to have a solid foundation to work with. We provide pharmacy accounting services and consulting but we also own pharmacies, so our financials include DIR fees, rebates and revenue lines for each payer. To be successful, pharmacists need to free up as much time as possible to spend with clients.

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. There’s of course no way to know exactly which coffee you sold because you just poured it all in the coffee grinder as you needed it. Do you report your cost at $6/pound, $7/pound, or even in the middle at $6.50/pound?

This allows us to create and provide you business tax returns quickly and accurately. Running a busy pharmacy means you need to be able to do important work from anywhere. The FreshBooks mobile app lets you work on your business finances on the go, whether you’re running a report on the bus or tracking inventory while out of town for a conference. FreshBooks stays in sync across all your devices, so you always have access to the latest financial data. Upload receipts and respond to clients and vendors directly through the app, from wherever work takes you.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top