December is almost here, and that means it’s time for the year-end inventory count. It isn’t anyone’s favorite task. Still, it’s one of the most important things you can do for your practice’s books. Inventory is usually one of the biggest expenses in a veterinary practice. If the number in your system doesn’t match what’s on your shelves, your cost of goods sold, your profit, and your tax return will all be off.
A good count also tells you about more than taxes. It shows where product is expiring, going missing, or not being charged for. And it only works if the right people are counting and the right people are posting the adjustments.
Below is the SOP we share with our ezyVet clients. It covers how to pull the report, how to enter your counts, and who should and shouldn’t be involved. Plan for the first count to take a while. After that, it gets much easier.
Inventory should be counted when the practice is not in operation, this can be done before the start of the day, at the end of the day, or on a day that clinic is normally closed. For pill counting feel free to utilize app like Pilleye, where bottles are emptied on a counter top and picture is taken with this app or similar app and it will tell you how many pills are on the table. Super easy and makes this much faster and accurate process. Only count open bottles and have at least 2 people performing inventory count.
Print or open a report from ezyVet: Head to Reporting, then search for the Inventory Value report.
Then select Excel as the format, check boxes – ‘Display unit cost price’ and ‘Use current cost price’:
Once spreadsheet is loaded add a column – Actual Quantity on Hand
It is recommended to hide or remove the tab with current quantity on hand, so people who count don’t assume that is the number and count it.
And this is where the quantity is added. The spreadsheet can be organized based on Product group, which is helpful as usually many medications are stored based on type on shelf anyway, such as flea & tick, etc.
Use Ctrl+F to find the product on the list.
The spreadsheet is then utilized to create an adjustment directly in ezyVet. Usually, the whole entry is done it one sitting. And yes, it is very time-consuming, especially for the first count ever. It should get less time consuming, once platform is integrated as physical counts will be matching the quantity on hand for the most part.
Let’s say the actual count shows 200 tablets on hand.
Head to Financial Tab in ezyVet:
And scroll down to Inventory Adjustment:
Pick a date the inventory was counted and start entering your counts. Caution. Do not leave this unsaved. It will go away! Personal experience….
Since in this case, the amount on hand is only 200 tablets, the adjustment is negative 427. See below:
For a reason – add physical count.
Once done, head to Reporting, then search for the Inventory Value report and reprint the report with the date of inventory count – it should match your count sheet. If not, another adjustment is needed.
Heads up – batches will take much longer as you will have to zero down every batch.
For internal control:
Who should and should not count
The counting team should be at least two trained staff members, such as technicians, assistants, or CSRs. One person counts and the other records, then they switch roles halfway through. Each count sheet should be initialed and dated by both people at the end.
The person who orders and receives inventory should not count alone. They can be on the team, but they should always be paired with someone who has no purchasing duties. Anyone who has the right to enter adjustments in ezyVet should not count at all, or should only record while someone else counts.
Do a blind count if you can. Hide or delete the system quantity on hand column before you print or share the spreadsheet. Then the team counts what is actually on the shelf instead of checking the number they expect to see.
Controlled substances should be counted separately. The DEA registrant or a designated DVM should be present, and the count should follow your controlled substance log procedures.
Who should and should not enter adjustments
Only one or two people should have permission to post inventory adjustments in ezyVet. Usually that’s the practice manager and/or the owner or medical director. Turn off this permission for everyone else in ezyVet user permissions.
These people should not have adjustment rights:
- The person who orders and receives inventory
- Anyone who took part in the count
- General staff who don’t need it for their daily work
Before posting, the person entering adjustments should review any large variances with the count team. A recount should be done for high-value items or for any item off by more than a set amount.
After posting, the owner or medical director should review the inventory adjustment report. Keep the signed count sheets with it for at least a year.