Where did all this paper come from?
A great example of optimisation is the management of financial documents (eg. pharmacy invoices) in your business.
– Pharmacy Invoice Document Management Example
Is there a way to minimise the number of times a piece of paper is passed through the pharmacy team, your administration through your bookkeeper and accountant, and also archiving? There absolutely is. Let’s start with the documentation that we encounter when we’re ordering products in our pharmacy. One of your team may on an ad-hoc basis or a daily basis order products into your pharmacy via your wholesaler, or a direct supplier. A purchase order needs to be generated, and that can be done from your point-of-sale system. It can also be done via a phone order, a fax order, or even a representative coming into your pharmacy and proposing an order that you may then send on to your supplier. Or they may do that on your behalf. But nonetheless, there should be a record in your pharmacy of that order being placed, so that your stock or inventory manager can monitor the order process as it goes through your supplier. You then have the ability – if you are using your point-of-sale system – to transmit that order, and get a notification whether that order has been transmitted successfully. You may also be able to view this via a customer-facing portal, where you are able to view all outstanding orders you have placed with that supplier. Most wholesalers and direct suppliers offer this now, and you are also able to update your details there. You can get a delivery notification slip that you can print off if you choose. You may also then receive a notification from that supplier once the order has been dispatched, which may be directly from them or from a logistics partner. You may then also receive an electronic invoice, as the consignment may not include a printed invoice to save your supplier money in paper and printing. You may need to print that out. So, your stock or your inventory manager may need to have the purchase order, the invoice, and then you may receive also a receipt of delivery from the logistics partner or an internal courier from the particular supplier. That may include a picking slip that you are also able to reconcile with the other two documents: the purchase order and the invoice. That’s already a lot of paperwork!
Your staff may then use an electronic device, such as a radio frequency scanner, or a manual method of ticking off the individual invoice to ensure that all products ordered can be reconciled against the purchase order and the invoice. They can also note any discrepancies, so that if the wrong products have been delivered – by either user error or by supplier error – that can be brought to the attention of the supplier at the earliest possible point, so you can apply for a credit or a return authorisation… generating yet another document in the process.
From this point, the stock can be put away in the store and your stock levels within your point-of-sale system can be updated by entering that invoice into your point-of-sale system, either automatically – if you are using a radio frequency scanner – or manually. You may also at that point note any price discrepancies, whether that be a reduction or increase in cost price. You will then need to update your margins. From that point, you may also need to generate shelf labels if there are new products or new prices that need to be applied, and the invoice will be accepted into the system.
The invoice generally will then be put aside, and entered by the same person from scratch again into your accounting system, ensuring that all GST codes have been accounted for, special accounting codes have been attributed to that order, and that the total of that order matches what you have received from that supplier. Obviously if there are discrepancies, such as being short sent or applying for credits, these issues need to be flagged so that your accounting entries in your general ledger are 100% correct when compared to your point-of-sale.
The majority of us don’t have on-site bookkeepers, or even a trained person in the pharmacy business, to be able to manage all of those processes. It is quite labour intensive and highly administrative and not very patient focused. In these tough times, we can only afford to employ staff who are able to engage with our customers, so we may look to outsource our bookkeeping. We currently may have an accountant do everything for us, including the entries. But they don’t live inside your four walls of the pharmacy. So then that document needs to be shipped off in paper form to that accountant or bookkeeper for it to be re-entered. This can cause significant delays. Once it is entered, it will then go into an archive box which – for the majority of invoices and purchase orders – we need to keep for seven years. This is a very long and convoluted process – as you can see! The documents move many different ways and stay in circulation for a long period of time. Now the document doesn’t stop there! After seven years, it needs to be securely destroyed, so someone needs to be able to recognise when that seven years is due and make the necessary arrangements for that document to be securely destroyed. Only then have we completed that document workflow journey, seven years later. There must be a better way. Stay tuned for Part II…
This is excerpted from Transpharmation: How to embrace technology to build a smarter, more successful 21st Century Pharmacy before it’s too late.., by Robert Sztar, 2014. You can buy the book here
