MEETING THE NEEDS OF AN ENTREPRENEURIAL PHARMACY

401 E. Church St. | Suite 300 | PO Box 1050 | Edenton, North Carolina | 27932

P 252.482.7644 | F 252.482.2556 | E ollin@sykes-cpa.com

www.sykes-cpa.com

Members of Private Companies Practice Section of American Institute of Certified Public Accountants & North Carolina Association of Certified Public Accountants

Why Work With a Pharmacy Accountant“The most successful pharmacies are taking full advantage of innovation in their accounting. With affordable comprehensive accounting systems, industry specialized CPAs, cloud-based products and virtual controllership/CFO services, pharmacists are able to spend more time focusing on their patients and growing their business.”

Scotty Sykes, The Unaccountable Pharmacy

A powerful accounting team for independent pharmacies

SYKES & COMPANY, P.A., IS THE PREMIERE ACCOUNTING FIRM FOR INDEPENDENT PHARMACIES ACROSS THE U.S. WE ARE INVOLVED IN EVERY ASPECT OF THE ACCOUNTING NEEDS OF INDEPENDENT PHARMACIES AND THEIR OWNERS.

“[Before independent pharmacy owners start to work with us], they simply don’t have a clue where they are… If you know where you stand, you can plan for where you want to be. But if you don’t fundamentally know where you stand currently, it’s very difficult to plan where you’re heading.” – Ollin Sykes, “Blunders in Independent Pharmacy Accounting”

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5 Simple Steps to Becoming a Happy Pharmacist

Questions to Ask a Prospective CPA

• Do they normally file timely tax returns for their clients?

• How many community pharmacies do they work with?

• Are they aware of the pharmacy financial benchmarks made available by NCPA?

• Do they understand the industry?

• How do they utilize cloud technologies to help them be more efficient and save costs?

• How proactive are they in assisting community pharmacies they work with in regard to meeting the pharmacy owner’s needs, wants, and desires with financial, cash flow, and tax issues in advance of year end?

• Do they review the month end script audit logs from the pharmacy and explain what these reports mean to the pharmacist?

“A pharmacy financial dashboard includes key statistics that should be available to all pharmacists on an ongoing basis that gives them an idea of where they stand. The basic accounting systems that are in place today should provide this. Regardless of the accounting software that you use, any CPA who deals with multiple pharmacies should be able to help and advise you.”

– Ollin Sykes, “Creating a Financial Dashboard for Your Pharmacy”

“Cloud-based accounting has been used for a number of years, but there are tools that are available that you can tie in that you couldn’t do before. These tools are ever-changing, ever-evolving and you just have to make sure you’re staying on top of that.”

– Ollin Sykes, from “Creating a Financial Dashboard for Your Pharmacy”

For more information:Call us at 800-729-5405. We love talking to independent

pharmacy owners and those seeking to buy an independent pharmacy.

Watch our free educational videos online at: http://www.sykes-cpa.com/news-blog/

“I like giving the pharmacist that first phone call after we get the financial statements roughed out and give them an education because that’s what they’re paying for… they’re not paying for a bookkeeping service. They need to understand where their money is, where their money has gone and where their money’s going.”

– Kathy Blanchard, “Getting Started with Sykes & Company”

Pharmacy Accounting Services — Category 1MONTHLY REVIEW SERVICES WITH MINIMAL SET-UP TIME REQUIRED AND ONGOING ASSISTANCE

This level of service is a good fit for you if:• Your pharmacy or pharmacies have up-to-date, well-working, established accounting systems• You need a monthly accounting review and general advisory services

Category 1 services include:• Client’s current accounting file will be converted to

a cloud-based QuickBooks accounting environment utilizing Right Networks, an enterprise based hosting service, which will allow secure, 24/7 internet access to the company data files by the client and by Sykes & Company, P.A. Training as necessary will be provided. Initial work may require general review, adjustments, and financial statement format changes.

• Pharmacy staff handles some or all of cash receipts posting, accounts payable processing, payroll check writing, payroll tax reporting, sales tax requirements, etc. internally, or may request that Sykes be responsible for some of these duties. In-house controls and established workflow are in place and only need reviewing and/or minor tweaking.

• Monthly financial statement preparation is performed by client and minimal accounting review and support required from Sykes on a regular basis.

“I’ve seen a situation where the bookkeeper in a particular store wrote a check for $2,000, removed the cash and showed the pharmacist a $10,000 deposit at the end of the day. The bookkeeper went to the bank the following morning, made the deposit, pulled out the check they wrote to make the deposit balance the previous day and then only deposited $8,000 in checks coming in from third parties. So they were $2,000 short that particular day.

Every day they were short the amount of cash that was being removed from the balanced deposit slip the previous day. Because the pharmacist didn’t go in to check the following day online to see how much was deposited and check that back to the point of sale report from the previous day, they got away with all the cash.”

– Ollin Sykes, “Fraud in Independent Pharmacy Accounting”

Pharmacy Accounting Services — Category 2MONTHLY REVIEW SERVICES WITH ADDITIONAL REQUIREMENTS ON FRONT END OR IN PROCESSING

This level of service is a good fit for you if:• Your pharmacy or pharmacies may be using an accounting system that needs updating and/or clean-up

work, but otherwise is in pretty good shape• Accounting/financialstatementreportingmaynotbeexactlycurrentandtaxadjustmentsnotinsystem• Pharmacystaffneedshelpindeterminingdailyworkcontrolsandflow• Youmaynotbecomfortablewithpreparingorunderstandingfinancialstatementsandjournalentries

Category 2 services include:• Client’s current accounting file will be converted to a

cloud-based environment as explained in Category 1. After initial training, the client handles everything with close supervision from Sykes & Company, P.A. Learning curve on client side is minimal, but may require changes in work patterns and workflow.

• Financial statements will be prepared by Sykes in client’s cloud-based QuickBooks file and also available to the client through the client’s own secure portal at Sykes. Client may or may not need direct monthly assistance in keeping the accounting system up to date going forward.

• Sykes may or may not absorb some of the payroll check writing reporting and sales tax preparation duties. An additional enhancement of the accounts payable processing management could be interjected using the cloud-based Bill.com payables system as detailed in Category 3.

“At month end, that’s really where we would come into play. We would take that information that’s been reconciled, we would log into your Right Networks account online – there’s no transferring of data, everything is available 24/7 through the cloud – we would make whatever adjustments are necessary, whether it’s depreciation, whether it’s amortization, and then produce financial statements. We make those available via a portal site that only the pharmacist or anybody they designate would have access to, then we get on the phone at month end and review what we see.”

- How Much Time Should My Pharmacy Accounting Take (part 1)

For more information:Call us at 800-729-5405. We love talking to independent

pharmacy owners and those seeking to buy an independent pharmacy.

Watch our free educational videos online at: http://www.sykes-cpa.com/news-blog/

Pharmacy Accounting Services — Category 3FULL CONTROLLERSHIP SERVICES

This level of service is a good fit for you if:•Yourpharmacyorpharmaciesdonothavesufficientin-houseaccounting/bookkeepingstaffinplaceorbusinessgrowthhasexceededin-housecapabilities

•Accountingsystemmaybeindisarrayandfinancialreportingisnotcurrent• Situation may or may not involve multiple locations/stores

Category 3 services include:• Sykes & Company, P. A. is engaged to provide full

Controllership Accounting services and will be the one-source provider for accounting data in-house controls and reporting responsibilities. The client is responsible for:o Sending daily deposit and sales information to

Sykes for posting, bank reconciliation, and cash flow management.

o Uploading accounts payable invoices for processing to a secure cloud-based accounts payable system called Bill.com, and payments will be processed by Sykes as approved by client or based on cash flow availability, depending on the level of participation desired by client.

• Financial statement preparation will be handled by Sykes using the cloud–based QuickBooks accounting system and copies of completed statements will be posted to client’s secure portal. The client may or may not desire or need access to the accounting system; however, training can be provided.

“The thing that surprises pharmacists the most is that… no one has ever taken the time to share with them, or even has the knowledge base that pertains to the niche of independent community pharmacies. They completely lose track of what is happening. They get so tied up in the day to day functions of being a pharmacist and taking care of their patients that they miss the big picture.”

– Ollin Sykes, “Cash Flow Management Tips When Money is Tight”

“We can do as little or as much as a pharmacy owner needs. It doesn’t have to be an either or situation. If you start out and think. ‘Well, I can handle everything. I don’t need you all’… but it doesn’t quite work out that way, we can step in and provide the controllership accounting.”

– “Working with Sykes – The First Year”

4 Traits of Successful Pharmacy Owners1. Confirm that the daily point of sale reports and bank

deposits at end of the day tie into the actual daily deposits that are made at the local bank.

2. Enter the daily point of sale reporting information into QuickBooks. This can be done by the pharmacist and/or the staff in the back office.

3. Review daily dispensing summaries for any kind of rebilling opportunities that occur on a daily basis. This can be done by a pharmacist or highly competent tech.

4. Stay up-to-date on technology that supports their efforts to buy correctly and efficiently, and keep perpetual inventory at optimal levels, whether they have one store or multiple locations.

Pharmacy Accounting Services — Category 4EXTENSIVE SETUP AND BOOKKEEPER ASSISTANCE (INITIAL & ONGOING)

This level of service is a good fit for you if:• Your computer system is either incompetent or out of date• Pharmacy bookkeeper is overwhelmed, behind and is not maintaining current system• Taxreturnsmaybedelinquent;journalentriesnotpreparedandgeneralchaosprevailsintheoffice• Clientwishestoretainin-housebookkeepingstaff,whichcouldrequireextensivetrainingand

assistance

“A pharmacist had a popular script management system and the acquisition cost information in that computer system was completely fouled up. They typically get daily feeds from the wholesalers into their systems – but the way she was pricing her script sales was totally out of sync with her competition and her region. We were able to get an expert there, on site, who was able to fix the cost acquisition information in her computer, fixed the way she was pricing her scripts. She has completely turned around that situation and today she’s about seven or eight percentage points higher – this is about a $5 million store – than she was when we walked into the store because she’s taken the bull by the horn and she’s made these changes happen. When we walked into that store, she was basically bankrupt, she just hadn’t realized it.” – Ollin Sykes, “A Gross Margins Success Story”

Category 4 services include:• Initial process includes determining exactly where

accounting is, what is needed, reviewing prior years, and/or determining beginning point of reconciliation in system.

• Client’s accounting system will be converted to cloud-based system as outlined in the previous categories, then cleaned up as needed.

• Bookkeeper training will be provided for daily functions and controls, as well as on-going maintenance of accounting file.

• Sykes & Company, P.A. may absorb some of the payroll check writing, reporting and sales tax preparation duties.

• Once client is up-to-date, monthly accounting review and assistance and continual support will be provided. Financial statement preparation will be handled by Sykes as outlined in previous categories.

“Hitting on these key items: the perpetual inventory systems, the daily processes of making sure money gets in the bank, following up on third party claims and the reconciliation of those using technology tools… there are cloud-based items in the background that can help you be more profitable.”

– Ollin Sykes, “A Gross Margins Success Story”For more information:

Call us at 800-729-5405. We love talking to independent pharmacy owners and those seeking to buy an

independent pharmacy.

Watch our free educational videos online at: http://www.sykes-cpa.com/news-blog/

Pharmacy Accounting Services — Category 5TURBO-CHARGED CATEGORY 4

Basic Category 4 situation turbo-charged with multiple stores, locations and or other extenuating circumstances

“By filling so many scripts, so many different price structures, so many NDC codes, etc. it’s just so difficult to make sure that you’re maximizing your profitability in all of these areas. Things continually evolve with independent community pharmacies and the people and entities working around them. You have to keep your eyes open about these things. This is just an example of the kinds of things that we do and constantly bring to our pharmacists’ attention.”

– Ollin Sykes, “New Technologies Help Pharmacies Recover Lost Revenue”

“A lot of times the controls on cash are not there. In the heat of doing business, you forget… you should be watching everything and you don’t want to not trust people, but you have to have certain checks and balances in place. That’s just good business.” – Sheila Anderson, “Walking Through Your Pharmacy Numbers”

For more information:Call us at 800-729-5405. We love talking to independent pharmacy owners and those seeking

to buy an independent pharmacy. Watch our free educational videos online at: http://www.sykes-cpa.com/news-blog/

“We’ve been working with pharmacies for many years. It’s not only that we understand the numbers, we understand what they mean and what they mean to you and your industry.”

– “Working with Sykes – The First Year”