In some states, as little as 30% of pharmacy owners are utilising the benefits of a pharmacy accountant. This can be problematic for several reasons and costly if the right advice is not being sought.
Given the highly competitive environment that pharmacies operate in, it is crucial for pharmacy owners to engage a pharmacy specific accountant to ensure they are receiving the most appropriate advice in line with industry regulations.
So why use a pharmacy accountant?
The pharmacy industry is constantly evolving and brings with it a range of complex challenges that require specialist knowledge to navigate. From changes to location rules and ownership laws and PBS reforms – you need a partner who you can trust to provide you with the right advice to help you grow your business.
Whilst a standard accountant can assist with tax compliance and other standard accounting requirements, their lack of industry knowledge can be costly. An industry accountant understands the challenges that are faced at every stage of pharmacy ownership and will provide you with the right solutions tailored to your pharmacy. Furthermore, pharmacy accountants also work with a network of industry professionals from lawyers to finance providers who can help get you on your way to managing a successful pharmacy business.
Let’s explore in more depth how an industry accountant can add value at each stage of your pharmacy journey.
Purchasing a pharmacy
Purchasing a pharmacy is a significant investment, especially given the high value of pharmacies in Australia. There are two essential things to consider when purchasing – due diligence and structuring. A pharmacy accountant can assist you with the due diligence process to ensure that the price you are paying for your pharmacy reflects the true value of the pharmacy and that you aren’t overpaying. They will also advise you on the best way to structure your pharmacy in line with your state’s ownership rules. Getting the right structure from the outset is essential for your overall business strategy and will ensure you not only protect your assets but also are legally paying the least amount of tax on profits made by the pharmacy.
In addition, they can also assist with:
Running a pharmacy
When it comes to operating your pharmacy in the most efficient manner, a pharmacy accountant can provide valuable insights to build your pharmacy to what you want it to be. Pharmacies are sometimes subject to more tax liabilities than other types of businesses, and an experienced industry accountant can usually help the owner minimise the amount of tax they pay.
Understanding the factors impacting the pharmacy sector, and how others are performing, can be a great gauge for how your pharmacy is tracking. Benchmarking allows you to understand how your pharmacy measures up and where the opportunities for growth are. Pharmacies can be benchmarked on areas such as gross profit, EBITDA, stock turnover, wages, and scripts per day, just to name a few. KPI reporting is another service that is becoming more and more important for pharmacy owners to get insight into their business performance, and ultimately gain a competitive advantage in the market. A pharmacy accountant can also assist you with:
Selling a pharmacy
When it comes time to step away from your pharmacy, a pharmacy accountant will work with you to achieve the maximum sale price for your pharmacy and reduce the amount of tax you pay on the way out. They can also help you explore succession planning, including partnership structures if this is something you would like to consider. Additionally, if they are a firm that also offer financial planning, like Yield Advisory does, they will work with you through the financial planning process to ensure you achieve the retirement you wish for.
Conclusion
Whether you are purchasing your first pharmacy, looking to expand, or selling; a pharmacy accountant is invaluable in ensuring you get the best advice possible at all stages of your pharmacy journey. A specialised team with extensive pharmacy knowledge is what sets the high performers apart from the average performers. The question you need to ask, is can you afford to be without the advice of a pharmacy accountant?