What Your Accountant Should Be Doing for Your Pharmacy—But Probably Isn’t
As a pharmacy owner, you rely on your accountant to manage the numbers, ensure tax compliance, and keep the books in order. But in today’s competitive and complex market, your accountant should be doing much more than that. While basic accounting services are essential, there are key areas where your accountant can provide strategic value that you may be missing out on.
At Pharmatax, we believe that an accountant should be a trusted business advisor—someone who helps your pharmacy grow, optimize profitability, and plan for the future. In this post, we’ll highlight what your accountant should be doing for your pharmacy and why it’s essential to go beyond just the numbers.
1. Proactively Managing Your Tax Strategy
Tax season isn’t the only time you should be thinking about taxes. Your accountant should be proactive in helping you optimize your tax strategy throughout the year.
Tax Planning: Your accountant should regularly assess your tax position and make recommendations on how to minimize your tax liability. This includes helping you take full advantage of any available tax reliefs or incentives, such as Capital Allowances or Research and Development (R&D) tax credits.
VAT Optimization: Pharmacies often deal with complex VAT rules for medicines and related products. Your accountant should be helping you navigate these rules and advise on the most tax-efficient methods for managing VAT.
Avoiding Tax Pitfalls: Your accountant should keep you informed of any changes in tax laws that could impact your pharmacy and help you stay compliant to avoid costly fines.
Why This Matters: A proactive tax strategy can save your pharmacy significant amounts of money and ensure you’re not overpaying. This should be a continual process, not something that happens only at year-end.
2. Providing Meaningful Financial Analysis and Forecasting
Many accountants simply prepare financial statements and reports without offering much in the way of analysis. But your accountant should be providing more than just numbers—they should offer insights that help you run your pharmacy more efficiently and strategically.
Key Performance Indicators (KPIs): Your accountant should be tracking essential KPIs like profit margins, overhead costs, and sales trends. By evaluating these metrics, they can help you identify areas for improvement or growth.
Cash Flow Forecasting: Managing cash flow is crucial for pharmacies, especially with fluctuating income from NHS prescriptions or seasonal variations in sales. Your accountant should provide forecasting tools to help you predict cash flow, plan for slower months, and ensure you can meet operational needs without financial stress.
Scenario Planning: Accountants should offer scenario planning, modeling different future financial scenarios (such as a growth in sales or a rise in costs) to ensure your pharmacy can weather any potential storms.
Why This Matters: Without clear financial insights, it’s easy to miss opportunities or fail to notice areas of concern. With the right forecasting and analysis, you’ll have a clearer picture of your business’s future and how to navigate it.
3. Helping You Optimize Profit Margins and Costs
As a pharmacy owner, one of your main goals is maximizing profitability. Your accountant should help you do this by identifying cost-saving opportunities and offering strategic advice on how to increase margins.
Cost Control: Your accountant should regularly review your pharmacy’s expenses and suggest ways to reduce them. This could involve renegotiating supplier contracts, improving inventory management, or automating certain processes.
Product Pricing Strategy: A good accountant will help you assess your pricing strategy, ensuring that your prices are competitive while still ensuring profitability. They should analyze the pricing of both prescription and over-the-counter products to ensure you’re maximizing revenue without losing customers.
Expense Allocation: Many pharmacies struggle with managing discretionary spending. Your accountant should help you allocate resources more efficiently by distinguishing between essential and non-essential expenses.
Why This Matters: Without a detailed review of margins and costs, small inefficiencies can add up over time, eroding your bottom line. A proactive approach can help you boost profitability and run a leaner, more efficient operation.
4. Advising on Business Growth and Expansion
Whether you’re looking to grow your pharmacy by adding more locations, expanding your services, or diversifying into new markets, your accountant should be there to help you navigate the financial side of expansion.
Investment Analysis: If you’re considering investing in new equipment, expanding your premises, or hiring more staff, your accountant should help you assess the financial feasibility of these investments, ensuring they provide a good return on investment (ROI).
Mergers and Acquisitions: If you’re thinking about buying or selling a pharmacy, your accountant should assist with valuation, due diligence, and the structuring of deals. They should ensure you’re getting a fair price or making the most out of a sale.
Financial Modelling for Growth: Your accountant should be helping you model different growth scenarios and analyze the costs involved. Whether it's scaling your business locally or expanding into other regions, they should help you map out the financial implications.
Why This Matters: Growing your pharmacy requires careful planning and financial analysis. A growth strategy without proper financial backing could lead to unnecessary debt or poor decision-making. Your accountant should ensure that you’re on the right path to sustainable expansion.
5. Implementing Financial Technology for Efficiency
In 2025, pharmacies need to be leveraging technology to stay competitive and streamline their financial operations. If your accountant isn’t helping you implement financial technology, they may not be providing you with the tools needed to thrive.
Cloud Accounting Software: Your accountant should help you transition to cloud-based accounting software, which allows you to access your financial data anytime and anywhere. This software provides real-time financial insights, making it easier to make informed decisions.
Automating Repetitive Tasks: From payroll to tax filings, automation can help you save time and reduce human error. Your accountant should assist in setting up automated processes that save you time and reduce operational costs.
Integration with Other Systems: Whether it’s integrating your financial systems with your pharmacy’s inventory management or customer relationship management (CRM) software, your accountant should ensure that all your systems are working together to improve efficiency.
Why This Matters: Technology not only improves efficiency, it also reduces the risk of errors and frees up your time to focus on running your business. Without the right tools, your pharmacy could be falling behind in today’s fast-paced market.
6. Helping You Navigate Regulatory and Compliance Issues
Pharmacies operate in a highly regulated environment, and your accountant should be helping you stay compliant with the latest rules and regulations.
HMRC Compliance: Your accountant should ensure that your tax filings and VAT returns are submitted on time and in accordance with HMRC guidelines. This reduces the risk of penalties or audits.
NHS Reimbursement: Pharmacies often deal with NHS funding and reimbursement for prescriptions. Your accountant should help you maximize your claims and ensure you’re getting the full amount of funding available.
Industry-Specific Regulations: There are many laws affecting pharmacies, such as those related to the handling of medications, data protection, and health and safety. Your accountant should help you stay compliant with these rules and avoid costly fines or reputational damage.
Why This Matters: Compliance is crucial for any pharmacy, and failing to adhere to regulations can result in financial penalties or operational disruption. Your accountant should be your guide through the maze of pharmacy-specific regulations.
Why Pharmatax?
At Pharmatax, we go beyond just bookkeeping and tax returns. We’re here to be your strategic financial partner, helping you optimize your profits, grow your pharmacy, and manage the challenges of an ever-evolving healthcare landscape.
If you’re ready to take your pharmacy’s financial management to the next level, contact us today:
📞 Call us at 02476017778
📧 Email us at info@pharmatax.co.uk
🌐 Visit our website at www.pharmatax.co.uk
By ensuring your accountant is offering comprehensive, proactive services, you can unlock the full potential of your pharmacy. Don’t settle for just the basics—let your accountant be an integral part of your pharmacy’s success.
