What to Do with Out-of-Control Inventory Costs
Drugs, medical supplies and food costs are some of the biggest expenses a practice incurs and these costs are increasing in most practices. What should the practice do if these costs are too high? First of all, it is important to drill deeper into the accounting and PIMS records to truly understand whether the costs are too high and WHY this is so. Secondly (and most importantly), changes need to be made in the practice to improve inventory efficiency and costs. Inventory control is sometimes seen as a boring and tedious task, but it can have a huge impact on your profitability and is actually one of the easier things to do well in a practice.
- 1. Learn how to identify problems in the practice’s balance sheet accounting and practice information management system accounting that are making it impossible to determine if the practice has an inventory problem
- 2. Determine what is causing inventory costs to be higher than normal
- 3. Outline changes in the practice that are necessary to correct out-of-control inventory costs