Bookkeeping is often considered a basic business function and rarely gets the attention it deserves! For our Accountants this baffles me, as it’s so disastrous when bookkeeping is completed incorrectly.
I would argue that bookkeeping is one of the most critical business functions for your pharmacy. It translates every single activity, interaction, decision, and conversation that happens in your pharmacy, into a single concise snapshot. For it to operate properly, it takes considerable training and skill.
Let’s dig into this more:
1. Determining the value of your business relies upon the accuracy of your financial data.
2. To obtain funding for equipment finance, a new family home, acquiring a new business, bringing in a new partner, all depends on accurate financial data.
3. Meeting all your ATO, ASIC, State Revenue and other local, state, and federal government obligations relies on accurate financial data.
4. And let us not forget probably the most important aspect, business management decisions.
In my role, from both doing over 75 valuations annually and my pharmacy consulting, I am exposed to a lot of financial records, and the quality range of these reports are enormous! Some clients send through beautiful data, it is always accurate and can be produced quickly. Furthermore, any queries I have are addressed quickly. When that happens, the valuation can be turned around promptly and with great certainty, which helps everyone.
Then there are those that are, let me say, the opposite. Let’s call them the problem children! There are so many problems, nothing makes sense, and takes forever to get any information. Lastly, any questions I have can sometimes take months to be answered. (By the way, in case you are wondering, 9 months is the longest time it has taken me to do a valuation).
Also, unfortunately over the course of my career when I have seen businesses go under, (which is not something any of us want!) poor financial records are a common issue. This is because the business owner doesn’t have clarity over how the pharmacy is actually performing.
With bookkeeping being such a critical function, it is important that it is completed properly. Pharmacy owners, and or untrained family members doing their own accounts late at night is not good practice (Though in saying that, I do know some pharmacy owners who produce financial data of such high quality, that would rival even the best.)
Generally, you need someone to undertake this function, who are professionally trained, and subject to the highest of quality practice standards. My view is that all pharmacy owners should be outsourcing their bookkeeping function, and here is why.
