Unfortunately, many pharmacies are literally not getting what they paid for when they receive products from their vendors.
Each year, SureCost analyzes purchasing data from over 5,000 pharmacy professionals across the country and shares our findings in the annual Smarter Purchasing Report. And every year, we see pharmacies losing money due to discrepancies between the invoices they pay and the actual value of the goods they receive.
But we also see how pharmacies avoid these pricey errors by leveraging a smarter purchasing solution. In this blog post, we’ll explain why these errors are so common and so costly. Then, we’ll show you how successful pharmacies harness smarter purchasing to guarantee they always receive—and only pay for—the right product at the correct quantity for the agreed-upon price.
Costly Discrepancies in Received Goods
It’s safe to say you’re not the only pharmacy buying from any vendor. They’re serving multiple pharmacies, and like anyone who gets busy, vendors make mistakes. In some cases, they may accidentally pack less than the amount you ordered. They may even forget to include an item.
If you don’t catch these discrepancies, you end up paying more money for less product and may short your patients on their prescriptions. You’re losing money and affecting your patients’ health treatment and your relationship with them.
In some cases, the errors are subtler. For example, pharmacies reported receiving invoices listing higher prices than their contracted or negotiated prices. Siloed processes make it harder to spot this issue. If the pharmacy staff receiving goods and accounting staff paying invoices aren’t looking at the same data, you may literally pay more than you bargained for. Pharmacies also reported unintended expenses due to “miss-picks”: vendors filling incorrect items while still billing pharmacies for what they ordered.
None of these errors were intentional, but as the data above shows, they all add up to substantial financial cost for pharmacies. They also cost them time. Vendors will correct their mistakes, but the burden remains on pharmacies to spot the error, compile the right documentation to show it, communicate the issue to the vendor and then wait to get back money they never should have spent in the first place.
The Solution for Efficient Receiving
There are several issues when it comes to accurate receiving. Yet no one has the time to painstakingly compare every package with the initial purchase order and then against each line item on an invoice. The right technology makes all the difference.
A unified purchasing solution tracks every step of the process—from uploading purchase orders to receiving items through paying invoices. Successful pharmacies use a single interface to purchase from multiple vendors. When items are delivered, they instantly compare what’s in the package with what they put in their purchase order. Once the order is confirmed, integration with Accounts Payable allows these pharmacies to approve invoices for payment. Throughout the process, the system monitors for problems and alerts them if there are any issues.
You no longer have to spend hours manually cross-referencing different lists and multiple systems or risk missing these costly mistakes. You also receive notifications regarding other issues such as vendor substitutions or failure to honor GPO pricing. Spotting these issues early on and having a built-in virtual “paper trail” allows you to address the issue with the vendor as soon as possible.
Selecting Best-in-Class Solutions
This streamlined approach only works if the technology you select integrates with existing systems (like accounts payable and pharmacy management systems). You don’t want to add work to your team’s process. And you don’t want to keep using siloed processes with multiple steps.
Smarter purchasing removes the financial risk from receiving. Pharmacies can be confident they’re not paying more than they should and can quickly and easily rectify any issues. Their teams can now work smarter using an efficient, integrated procurement. Most importantly, always getting the correct amount of the right product means patients get their prescription when they need them.
Successful pharmacies harness smarter purchasing for even greater benefits. As this year’s Smarter Purchasing Report explains, even as they continue to face numerous challenges, pharmacies can overcome these obstacles to drive savings, efficiency and better patient care.
