A WaypointRx Company
For our fifth and final installation of the Can You Leave It AND Keep It blog series, we will be reviewing your financial controls within your company. To review our previous blogs, click one of the links below.
- First factor is your willingness to delegate (Click Here to Read This Blog)
- Second, do you have an employee driven pharmacy or an owner driven pharmacy?
(Click Here to Read This Blog)
- Third, your pharmacy culture (Click Here to Read This Blog)
- Fourth, the strength of your systems (Click Here to Read This Blog)
- Fifth, your financial controls
In the first blog, we discussed delegating your tasks to others to help free up some of your time. However, monitoring financials should always be something that you focus on as part of that 20%.
- You need to make sure that you maintain the financial controls.
- This doesn’t mean that you have to make all of the financial decisions.
- What are the one, two, or three things that you need to monitor to ensure that the store is operating efficiently?
- Do you have your financial reports in place so that you can see them, understand them, and access them when needed?
- If you manage the accounting yourself, be sure to invest in software that offers reporting to help you easily track spending habits.
- If someone else manages your accounting, request that they send you the same reports. It is recommended that you review them at least monthly.
- Do you know the important ratios to monitor?
Its an unfortunate situation, but we have occasionally seen that a few times owners and managers relinquish some financial controls to employees who abuse the system. In one specific instance, an employee began embezzling petty cash. They only took small amounts at a time, but over the course of 6 months were able to take over ten thousand dollars. Even with some financial audits in place, if you don't review your spending and receipts closely, and regularly, it can end up costing you big time in the long run.
Another common example we see is corporate credit cards. If the same person who is responsible for paying the credit card is the person who is abusing it, it can become a significant loss for the company if no controls are in place to monitor the spending on it.
There is an article written by David Finkel for Inc.com which reviews some financial controls to safeguard your company and protect your bottom line. Click here to read the article. While some of the items mentioned are specific to larger companies, there is some good information for you to consider as well.
As it says above, maintaining financial controls does NOT mean you have to make all of the financial decisions. There are some things that others can handle on your behalf. Your role in monitoring financial systems is critical to its effectiveness. Managers and owners, like auditors, don't have to look at every single piece of information to determine that the controls are functioning and should focus their monitoring activities in high-risk areas. Spot-checking transactions or basic sampling techniques can provide a reasonable level of confidence that the controls are functioning as intended.
When it comes time for you to leave your pharmacy, it is important to make sure there are financial controls in place to help ensure no foul play is happening in your absence. By implementing regular, and sometimes random, internal audits and having reports reviewed regularly - you can rest easier knowing your company is in good hands.
For questions or help getting started on the path to leaving your pharmacy, feel free to contact us today.
We have also developed several tools to help you prepare yourself, your team, and your store. Click on the Visit The WaypointRx Store button to download the tools.
At TransitionsRx (a WaypointRx company), it is our mission to ensure you enjoy the greatest possible personal, ownership, and financial success. As champions of independent pharmacy ownership across America, we have amassed a tremendous amount of experience along with the most comprehensive toolbox of resources and solutions you can imagine. Our Inspired Independence Program has helped hundreds of pharmacy owners take full advantage of all their opportunities inside, outside and after their life in pharmacy.
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