Cash Flow Optimization Tips for Pharmacies
“Cash flow is vital to the success of a business,” said Brent Rollins, RPh, PhD, Associate Professor of Pharmacy Practice at the Philadelphia College of Osteopathic Medicine Georgia Campus School of Pharmacy. “More often than not, when you look at the health of a business, the cash flow statement is just as important if not more important than anything else.” (Pbahealth)
It is often thought that profitability equals success, however it is more complex than that; a company can be profitable and still fail. And, cash flow does not equal profitability, all the time.
What is cash flow?
Cash flow can literally be thought of as “money in the bank”. The definition of cash flow is “the net amount of cash and cash equivalents being transferred in and out of a company.” (investopedia.com)
“The better your cash flow, the more money you’ll have on hand to invest in your business, pay your bills, and prepare for unexpected expenses. In short, cash flow keeps your business sustainable.” (Pbahealth)
Eventually profit translates to cash, however the main difference between cash flow and profit is timing. Sometimes, things like overstock, out-of-stock medications and giving the wrong medication can affect cash flow immediately, and profit eventually. And other times, you may need to mark down inventory in order to increase cash flow to make a payment urgently, which then decreases the profit you make on that item.
Below, we have listed some things that may be affecting your cash flow and ways you can improve upon them, and in some cases eliminate completely, in order to increase your “money in the bank”.
Things that may be affecting your cash flow:
How mismanagement of cash flow can impact customer service and customer retention:
How can I improve cash flow with better will-call management?
Will-call management is a cost-effective way to improve pharmacy efficiency in order to improve cash flow and ultimately, profitability.
With a will-call management system such as scripClip™ once a prescription has been filled and verified, a bag clip is scanned and attached to the completed bag. This bag is then placed into will call in any order, eliminating the need for alphabetizing and giving your pharmacy an beautifully organized will-call area. scripClip™ performs a final verification by checking that all prescription vials and paperwork match and belong to the customer’s order.
scripClip™ can also be integrated into a hanging bag format. At pickup, pharmacy staff simply keys the customer information into their consoles and the appropriate scripClip™ tagged prescription will light up. Different colored lights are uniquely associated with each POS console, supporting multiple, concurrent transactions.
>scripClip™ pharmacy will call management also helps make quick work of un-retrieved and expired prescriptions that must be returned to stock. On command, the scripClip™tags on all un-retrieved bags simultaneously light up, enabling staff to quickly locate the bags for restocking.
Benefits of scripClip™ will-call management:
Reduce return-to-stock time by up to 78%
Optimizing Labor Resources
Once you understand your financials you can improve processes in order to increase cash flow. Even with small changes such as implementing a will-call management system you can generate enough cash for your pharmacy to weather any storm, whether it be a slow in business or rapid growth.