If you own a pharmacy then your bookkeeping needs are unique. There are times you need to focus and times to dream. In business, you must have time for both.
But focusing in a busy pharmacy environment can be difficult. Distracted staff make mistakes and take longer to get the job done. A distracted bookkeeper could cause serious short-term and long-term problems for the business.
Bookkeeping is one of the most vital tasks a small business needs to do. It is also one of the most time consuming and critical tasks because it is essential to have an accurate overview of your financial situation and to stay out of trouble with the taxation department. That is why you should really outsource your bookkeeping.
For the companies who outsource their books, the decision means saving time and money and receiving high-quality bookkeeping services at the same time. When you have people with specialist knowledge looking after your accounts, you remove the risks typically involved with relying on in-house staff. You are also more secure protected from making inadvertent mistakes that could result in a tax department investigation.
Does outsourcing make sense for you? Here’s a closer look at the specific advantages it may offer:
It’s no surprise that outsourcing work to an outside provider, versus hiring a full-time employee, saves you money. When you outsource, you match the work hours/amount of projects to your needs and avoid typical employee expenses like benefits, insurance, payroll taxes, unemployment taxes, paid time-off, etc.
You don’t have to provide work space, office furniture, computers or software, either. Even with the costs involved in farming out work, the financial savings are still significant.
Think of the weekly hours it will take to manage in-house bookkeeping staff—taking away from the time you can spend on business- and relationship-building activities more directly aligned with your company’s mission. Outsourcing alleviates this need. You don’t have to deal with the typical headaches involved with recruiting, hiring, retaining and overseeing staff because that’s what the service provider will handle. That means you’re free to focus resources on what matters most.
Take a few minutes and consider how you spend your time. Are you sitting at your computer at night entering figures late into the night the best use of your time? And do you have the time to keep up with the complex and constantly changing taxation and superannuation laws?
Peak Industries regularly review changes in the law as they happen so you’re protected. We specialise in the Pharmaceutical and Medical Industry, which means that we are the experts in that field.
Expert Services means security
Third-party service providers specialise in the work they do, so they’re the perfect resource for getting projects done. What’s more, service providers keep their skills fresh to keep up with the competition, ever increasing the quality of their work. This means when you go to a bookkeeping service, you can trust that your accounting will be handled well. Reference
Because our team have the knowledge and experience, we keep you up-to-date and safe.
Make the best of your time, save money and get the experts specialising in the Pharmacy & medical industry to handle your bookkeeping and accounting needs. Contact John from Peak Strategies today.
The most difficult task a business owner faces is the financial management of the business. Bookkeeping is particularly in retail with stock control, staff management and a multitude of other issues that make running your business extremely time-consuming. Bookkeeping is one of those huge time eating stress creating tasks.
Because of time pressures, most often bookkeeping is done after hours when you really should be relaxing, reading a book or spending time with your family.
Doing your books after hours is stressful and impacts on the quality of your sleep. You can’t get a refreshing sleep if your brain is too active with numbers and accounts tumbling around in your mind.
This overwhelm can result in your books being left until the last minute exacerbating the problem.
Outsourcing your business’s bookkeeping operations frees up valuable time enabling you to spend your time more productively.
Back-end office functions can be a heavy distraction from the day-to-day running of things and having your bookkeeping in-house can lead to a conflict of interests. All of these time-wasters and distractions need to go—out of sight, out of mind.
But there are a couple of other even more relevant reasons to outsource your bookkeeping. If you're relaxed 1) you'll make better decisions and 2) you will be more creative in your thinking.
The more relaxed you are, the better your decisions. The term ‘sleep on it’ now has a basis in science.
Most good ideas and insights come after you have had a good sleep. Wagner U1, Gais S, Haider H, Verleger R, Born J. confirmed that this in their 2004 study conducted by Sleep inspires insight. http://www.ncbi.nlm.nih.gov/pubmed/14737168?dopt=Abstract
Participants in the study were given a task that included a shortcut.
They found that only 20 percent of the participants were sharp enough to spot the shortcut even though most wrestled the task for several hours. The key part of the experiment was that Wagner and Born let some of the participants sleep between experimental trials. To their surprise, 59 percent of the participants in the sleep condition found the shortcut. The research team concludes that sleeping and dreaming “facilitates extraction of explicit knowledge and insightful behavior.”
In 2004, the neuroscientists Ullrich Wagner and Jan Born published a paper in Nature that examined the relationship between sleep and problem solving. In one experiment, they tasked participants with transforming a long list of number strings. The task required participants to apply a set of algorithms that would scare off most save a handful of math geeks. However, the researchers integrated an elegant shortcut that made the task easier. How many people, Wagner and Born asked, would catch it? Reference
Wieth and Zacks conducted another interesting study. Their study also established a strong link between a relaxed state of mind, creative thinking and insights.
One lesson from Wieth and Zacks study is that when it comes to moments of insight, it’s important to approach a problem with a relaxed state of mind. Historical examples of this include Henrí Poincaré, who conceived non-Euclidean geometry while boarding a bus; Arthur Fry, who thought up the Post-It note while singing hymnals in his church choir; and Archimedes, whose eureka moment came during a bath (though this is likely a myth).
Repose, not Red-Bull, is key when it comes to moments of insight. Reference
One of the most common reasons business operators stay awake at night is because of the books. Bookkeeping, BAS returns, wages, and taxation issues all contribute to after hours work that reduces relaxation time and quality of sleep and increases stress.
Reduced relaxation time and quality of sleep: The consequences
If you're not careful, stress can be a catalyst for a vicious cycle of sleepless nights: You're stressed, so you can't sleep. And then your lack of sleep makes you more stressed, and so on. According to the Anxiety and Depression Association of America, nearly three-fourths of adults say that their stress-induced sleep problems have caused an increase of stress or anxiety in their lives. Reference
Outsourcing accounting services does make sense, but the benefits don’t end there.
If you outsource your bookkeeping you save money, have specialist expertise on your side, and experienced staff focussed on your business. You contract a team to help you grow your pharmacy.
For more information contact peak Strategies because we specialise in the Pharmaceutical and medical industry.
When you outsource your pharmacy’s bookkeeping, you get to work on your business - not in your business. You get to 'think outside the box.'
Because you get more help you get more time to relax which means you’ll solve more problems, sleep better, get more insights into your business, and make better decisions because you will be working on your business not in your business.
For more information contact John Thornett from Peak Strategies, specialists in the pharmaceutical and medical industry.
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It should never be underestimated how important good financial reporting systems are. It has a huge impact on a whole raft of business issues. Yet somehow for many it is largely neglected. Often it’s cast aside because it’s too hard, can't be bothered doing it late at night, takes up too much time etc. The whole function for many small businesses is down played as not important enough. From my perspective seeing many businesses, both successes and failures, the best decisions are based on the best data. It's unfortunate but I have seen it more than enough times of decisions being made on poor financial data which more often than not ends in trouble. Think about the potential list of issues you have to deal with that this data relies on.
Simple ATO compliance with Business Activity Statements, GST, PAYG Withholding, year-end income tax returns and the cost in meeting your obligations.
Finance applications whether it be for equipment finance, refinancing loans, buying another business, home loans etc.
Bank reporting covenants.
Determining Trading Performance, cash flow monitoring etc
Business valuations and sale of your business together with the associated due diligence scrutiny.
The list goes on and on. It's a fact the critical element common in most businesses that struggle financially is poor financial records. I see it time and time again. Of course that combined with gross ignorance and inept management. As I say "garbage in, garbage out." How can you make important financial decisions if you have no reliable information on which to base your decision on? Sadly it happens all too often.
But really it's not all that hard. The financial processes are relatively simple. And your accountant, who should know this stuff back to front, are only too happy to help and give you some direction. They don't want to trawl through your rubbish. It's not only extremely costly for you in terms of accounting costs, but you end up becoming unprofitable for them too. Subsequently, if you don't make the changes required your account becomes more difficult to handle and cost pressures start building. So be smart, be humble, and ask for help. Although I must point out the failings of today's technology and education systems is that most recently graduated accountants do not fully understand basic bookkeeping systems. Sad as it is, young accountants have to learn this stuff from scratch after they graduate.
So for business owners, here are some tips for how to improve your financial systems.
Be humble and be honest with yourself. We aren't good at everything. We have different skill sets and sometimes bookkeeping isn't one of them. Don't kid yourself. Call your accountant and ask for a referral to a good bookkeeper. Note here, go for quality, don't skimp by going for someone who used to do some bookkeeping for a mate as a favour. Again it will cost you buckets. Get a proper bookkeeper who knows their stuff. Yes it will cost more, but don't think of it that way. Think about how much it will save you in accounting compliance costs. Think about the benefits of having accurate data. Think about all the other areas you could focussing on that would have greater benefit to the business. Think about what else you could be doing with your time than doing book work at 10 o'clock at night. Be smart, not ignorant.
Use technology to your advantage. Don't be afraid of it. This is coming from an IT challenged person too. Technological development in software systems is just amazing at the moment. Especially cloud based software such as Xero and MYOB. Personally I find MYOB Accountright Plus more in line with pharmacy needs, but this is a personal thing. I'm sure others will disagree. There are many efficiency gains to be had with most recent features such as direct bank feeds, and cloud software. Simply allowing you, your accountant and/or bookkeeper to view the same data file at the same time has huge benefits. And the direct bank feeds really speeds up processing time. It's very achievable to have a $5m turnover pharmacy having its bank reconciled monthly from go to woe in less than an hour if done correctly.
Use a checklist every month to know you have done everything. It's easy to become complacent, and we all forget things. Get help from your accountant to put together a comprehensive month end checklist.
Get yourself a good scanner, and set up a document file structure. Again there is good technology around, use it. For our bookkeeping clients, we got ourselves a ripping $1,400 scanner, and save all their documents monthly using some file sharing facility. Dropbox works fine for us. There are other facilities around too. The important issue here is no paper, all paper documents get scanned, stored and shredded. Save your bank statements, customer debtors, Script analysis reports, GST reports, credit card statements, stock value reports, departmental sales reports.....whatever you like. No paper. And note, have the world’s best backup systems.
Never assume. Don't just post random transactions somewhere and think "that'll do, close enough, the accountant will pick it up". Never assume we will. What's wrong with popping your queries on an email and asking? Most decent accountants won't charge for email. Why put a barrier on you communicating with us? Problems aren't created when you ask first. Problems are created when you ask questions after you have stuffed something up.
Account for PBS debtors correctly. You must record outstanding PBS Claims at the end of each month. Also don't forget the little GST amounts on some PBS Payments.
Insist on recording the movements in the monthly value of stock on hand. Now for something so relatively simple you'll be surprised at the complexity of this. Stock value reports per your Point of Sale system are notorious for being wrong. As a lot of distortion can come from simple things like timing issues and the accuracy of the data being entered in. The true test of stock value is a physical count. But doing this every month is costly and just not practical. Choosing to use the stock value report is the most practical, but be careful of the error margins. One option is reconciling your stock to a GP margin. But that can be fraught with danger too.
Insist on separating dispensary from retail sales. And if you also have a post office or newsagency, separate that as well.
Lastly, work diligently on making your Point of Sale data as accurate as possible. There is a whole wealth of information that can be extracted from, and used extensively, for information trading performance.
I could go on and on, and there is so much more I could talk about. But make the effort to get it right and you and your business will be rewarded. Good decisions come from good data. Be humble and realise we aren't good at everything, just ask my wife. But when there's something we don't know much about, go find someone who knows about it more than you. Then learn and learn well. For that is what life is all about.....learning.
Smile and have fun John
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I write this on a Saturday night, completely exhausted. Not physically, but mentally. To the point I couldn't even help my daughter with her homework. I had nothing more to give to anyone. I could only lie on the coach, footy on the TV watching the inside of my eyelids. This followed from a week from hell. I won't go into details but let’s just say it made me think about whether people going into business realise what it’s really like. I don't consider myself a good businessman. I just try really hard and am damn stubborn and persistent. There are lots of business owners out there far better than me. But I think of the times the young bucks and does come to see me wanting to buy into a pharmacy. They are super keen, ask heaps of questions and are so enthusiastic. It’s great to see. But unfortunately, as is often the case, they see the world like new lovers, when the world is full of joy and wonder with pink rose hues. They see the successful pharmacy owners and want to have a life like theirs. So when they ask for advice, the first thing I say to them is this. "Do not under estimate how hard this is going to be. It will test every single ounce of mental and physical strength you have."
I recently saw a great picture representing the truth of running a business. Like an iceberg, the 10% of the iceberg above the surface is the success. The 90% below represents the exhaustion, the tears, frustrations, countless failures, loss, heartache, long long hours, sacrifice and at times loneliness. It will test every ounce of mental and physical strength you have. Then when you are bug eyed awake at 3am thinking why the hell am I doing this, the answer lies in bed next to you, and further down the corridor in your kids bedrooms. You do it for them. It is what puts food on the table. It's what pays for your children's education. It provides your lifestyle. It is what sometimes enables you to go on those nice holidays. And see your kids play footy or dance, or go to school assemblies to see your cherubs get an award. It's what you do for your family. Every now and then business will remind you of the joy and fulfilment we get and why we started this damn thing in the first place. It's like a game of golf - 17 holes of pure crap, with 1 hole that gives you a faint glimmer of hope that you might actually know what you are doing.
We all hope there is that one day it will be worth it. Sometimes it is, sometimes it isn't. That is business. It is a cruel harsh beast. There have been plenty before you that have been left with not much and business has failed. But when I talk to successful business owners, many of them comment on their failings. Of lost business ventures, failures and financial hard times. These are the lessons we need to learn if we want to be successful. Whatever success means to you.
So if you are thinking of taking the plunge, think clearly whether you are prepared for whatever lies ahead of you. Success or failure. What are you prepared to give up to pursue that dream?
But like any dream to reach the top of a mountain, the joy is in the journey. Just sometimes we may stub our toe, trip over or whatever. But we get up, patch ourselves up and keep going. That is how we grow and get stronger. If you keep stubbing your toe, you’re really not learning quick enough are you?
Good luck to you young bucks and does wanting to give it a shot. I applaud you all for your guts. Some of you will be successful, some may not. Some will be lucky, some may not. But the 90% of crap you are about to go through on those 17 holes are worth it.
