Discuss how the knowledge of financial and managerial accounting can help managers like pharmacist working in different practice areas.
Financial and managerial accounting are not only helpful in the business setting, but also contribute significant impacts in the pharmacy field. Regardless of one’s role in the pharmacy setting, understanding financial and managerial accounting is critical, not only for economic success, but also to ensure the sustainability of our expanded professional role. For example, pharmacy managers must analyse the price of a particular pharmaceutical care service or take into consideration how much inventory (inventory management) to order as these will impact the service level provided to patients and customers. In terms of financial statements, the payroll is also of equal importance and tightly controlled in all pharmacy practice environments. With accounting, pharmacy managers in varied areas can best decide which medications to put on formulary, purchase new bar coding administration system, or manage personnel properly.
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Having knowledge about basic financial and managerial accounting at the very least helps pharmacy managers to be able to track and record their operations, such as income and expenses. With such a system, correcting any errors and inconsistencies in their record can be made easy. Financial and managerial accounting can allow pharmacy managers identify what step or decision is good for them financially, like looking for investments and sponsorship, as these can serve as evidences regarding a business's status and stability. It can also provide information to external users, such as consumers and government agencies, that can aid in the development of the company that the pharmacy manager is involved in.
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The pharmacy profession does not only focus on the service aspect but also in the product selling aspect, which might be considered as the business aspect. Having sufficient knowledge in the financial and managerial accounting would allow pharmacists to have a good understanding on how to manage or help in managing the businesses and companies they will be involved with. It may range from collection of accounting data to create financial statements (financial accounting) to keeping track of internal processing of business transactions (managerial accounting). Knowledge in these areas can help decide pricing of products on how to compete in the market, payroll for employees, scouting for suppliers, etc. These skills will certainly allow pharmacists to have more career opportunities in the pharmaceutical companies to even owning one of their own.
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The pharmacy profession does not solely focus on dispensing and manufacturing safe, efficient, and good quality medicines. The pharmacist can also be managers in different practice areas such as in the community, hospital, or industry. Pharmacy managers are needed in large organizations, such as pharmaceutical manufacturing companies, hospital pharmacies, chain community pharmacies, and many more. Pharmacy managers, like any other manager, are the ones responsible for planning, controlling, organizing resources, and making decisions in order for their organization to meet their end goals. They should be equipped with knowledge about financial and managerial accounting in order to make cost-effective decisions for their organizations. As pharmacy managers, many of the decisions that they are going to make involves financial implications, which is about obtaining and using the financial resources of their organization. Some basic examples of these decisions are: how to set up prices, what raw materials to use and where to order them, which drugs to include on a formulary, and many more. These decisions made by pharmacy managers should have a good impact on the company’s financial income while making sure that their drug products are safe, efficient, and are in good quality.
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Knowledge of financial and managerial accounting is important for pharmacists because every pharmacy is involved in the purchase and sale of materials, products, and/or services. In the community setting, products and services are exchanged for cash. In hospitals, purchases are made with cash, and sales are made through hospital billings to patients. Accounting can not only help the manager be updated on the current status of the pharmacy's cash resources, but also show how well the pharmacy is maintaining its expenses and achieving profit.
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In the community pharmacy setting, managers make decisions about purchasing products, setting prices, inventory, etc. This is also the same case with the hospital pharmacy setting. In the industrial pharmacy setting, managers also make decisions about purchasing raw materials and equipments, maintenance of machineries, quality control and assurance, personnel training, etc. A knowledge of financial and managerial accounting will ensure that pharmacists in all these areas will not incur loss but still deliver quality products and services.
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In reply to Bienvenido Balotro
Re: Financial and Managerial Accounting
Financial and Managerial Accounting is now an essential part of the pharmacy curriculum. Especially today, since the pharmacy profession is expanding its career paths, the need for pharmacy managers are also increasing. Knowledge in these two accounting branches help pharmacists in different areas of the profession make appropriate decisions about acquiring financial resources and how to properly utilize these resources. By being able to make wise financial decisions, they help the businesses, companies, hospitals, organizations that they are working with, maximize the use of their resources while simultaneously minimizing expenses by avoiding careless financial mistakes.
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Knowledge in financial and managerial accounting equips pharmacists with the skills needed to maintain and expand a business. This means keeping track of income, salaries, production costs, and the like. Pharmacist Managers in the pharmaceutical manufacturing business should know not only know how to produce but also to manage production costs from the raw materials, up to the salaries of the manufacturers and regulators. It is essential for pharmacists to be knowledgeable so that they can keep up with the complex structure of pharmaceutical industries. Pharmacist Managers in the pharmacy should also be properly skilled in accounting so that the pharmacy they own or manage does not go under and so that they can keep track of the costs of the drugs or products in their pharmacy. These are only some examples of pharmacist managers that need the knowledge of managerial and financial accounting.
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The field of pharmacy can also be involved in the field of business. May it be owning a pharmacy or manufacturing pharmaceutical products, pharmacy is greatly involved in the world of business. Learning financial and managerial accounting is crucial for pharmacists to be successful in this field. It is like learning a new language for one to be successful and profitable in this area. Learning accounting may help in the decision-making regarding transactions, investments, partnerships and whatever factor that could help a business grow. Having this knowledge will surely be beneficial in the long run.
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A solid knowledge when it comes to handling financial and managerial accounting enables managers to better manage the business. Accounting is needed to run a business because it helps track income and expenditures, and also can be used in making business decisions by providing investors or management with quantitative financial information. When running a business, may it be a pharmacy or in the pharmaceutical industry, financial managers need to understand what expenses to deduct, how much taxes to pay and when to pay those taxes. Poor financial recording could lead to the company being audited and could land you in unnecessary legal trouble.
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Financial and managerial accounting is beneficial in the pharmacy profession, especially for pharmacy managers and pharmacy owners, because it helps in the financial management of their company or business. Having a comprehensive understanding of these aspects will enable pharmacy managers and owners to regulate their income, monitor their losses, plan for investments or opportunities, and manage their financial performance. Proper execution using financial and managerial accounting comes with integrity and transparency of the financial status of the business or company. Good pharmacy practice and good business operation both aim to serve safe, efficacious, and high-quality drugs to improve the health of the general public.
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What is so great about the Pharmacy profession is how it is multi-facets it is. There is a broad range of possible fields in pharmacy whether it be in the hospital, in the industry and even from a business standpoint. That is why knowledge of financial and managerial accounting can help managers like pharmacists working in different practice areas. It is important to be familiar with the inventory, book keeping and other administration work in order to find a balance to making sure that the best service is provided to its consumers and at the same time allow for there to be profits to keep business afloat and care for their own employees.
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The knowledge of financial and managerial accounting is significant for pharmacy managers in order to effectively manage the business. Not only do we look after the health of our patients, but we also want to attend to the economic health of the pharmacy business in order to continue providing our patients the healthcare they need. When pharmacy managers understand their pharmacy's financials, they'll be able to make better business decisions. Furthermore, knowledge of financial and managerial accounting will be able to help pharmacy managers become fully aware of the money coming in and out of the business. If something goes wrong, they can be able to troubleshoot and find possible solutions right away. When pharmacy managers are well informed of their income statements, then they will be able to regulate the cash flow happening in the business. Through this, there is a less risk of having large liabilities and they'll know where to responsibly allocate the money throughout the business.
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The responsibilities of the pharmacist, be it in a hospital, community, or industry setting, has a wide range of requirements that do not only revolve around making sure that the patient or customer gets the appropriate medicine that they need based on their health situation. Pharmacists also act as managers in different kinds of pharmacies such as hospital pharmacies and chain pharmacies just to name a few, wherein they supervise the various activities including the dispensing of medicine and monitoring the work and tasks of technicians. As managers, pharmacists also have an extended responsibility of making important financial decisions and making sure that these decisions are well-thought of since these would greatly impact the pharmacy or any institution that they are working in. These financial decisions carried out by the pharmacist include concerns regarding inventory, supply, prices, equipment, and more. This is the reason why it is important for pharmacist managers to have a deep knowledge and understanding on the concepts and processes involved in financial and managerial accounting. By ensuring a proper planning process in the accounting of a pharmaceutical company, it will allow the said company to predict future expenses and necessary costs for projects. This altogether allows a company to work at maximum efficiency at the least amount of expenses, and produce high quality products for the patients.
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Much more than being a healthcare service, Pharmacy is also a whole industry that involves financial planning, management, and taxes. The practice of accounting in Pharmacy basically provides the Pharmacist records of transactions, kept and updated, to be used in the analyzation, planning, and organization of the next managerial move designed to sustain enterprises such as pharmacies, hospitals, research centers, and the like.
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Like with any business, accounting is crucial aspect to the success of company. Aside from its usefulness in keeping track of the payroll for employees and taxes, pharmacy managers in the community setting can use financial and managerial accounting to make decisions about what products to stock or how to price them. Likewise hospital pharmacists may use accounting to analyze inventory and budgeting to determine what drugs should be stocked. The production process of pharmaceutical manufacturing is reflected in financial records, and industrial pharmacists may analyze these records to help them monitor the financial status of the company and make the appropriate decisions to fix any potential losses.
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Pharmacy practice extends far beyond the typical healthcare setting. It involves a variety of different potential areas one may consider pursuing, which is why it is regarded as a particularly versatile career option. However, in spite of this, the knowledge of accounting definitely remains consistent among these various practice areas under the umbrella of pharmacy. With that being said, upholding accounting is definitely to the pharmacist's advantage, such that it allows them to keep track of all resources to be used within the pharmaceutical company--from purchasing, to detailing the inventory, sales, and payroll, among several other pertinent aspects. In addition to that, thorough preparation of organized financial statements would allow for traceability to make sure losses are avoided as much as possible. Most importantly, accounting stands as an essential foundation for the maintenance of a pharmaceutical business, such that it gives backing to any resolutions that would be made which pertain to financial matters.
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Financial and managerial accounting is needed by both nonprofit and for-profit making firms to use resources efficiently and maximize the value and effectiveness of the corporations. Managers are responsible for planning, organizing, and controlling resources. They need knowledge in financial and managerial accounting to make intelligent decisions. The decisions they need to make that require knowledge in accounting include management of inventory, choosing sources of supply, and setting prices.
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Financial and managerial accounting is a study of flow, of monetary or other things of worth. For any business setting, or even settings that simply deal with people, this is a universally useful skill.
Pharmacists may find themselves, say, in a manufacturing plant. In this setting, one might be expected to account for equipment, raw materials, or perhaps personnel costs. In a hospital setting, pharmacists need to keep a close eye on inventory for the most part. In community settings, a pharmacist is expected to have the knowledge to manage most if not all financial matters of the business: inventory, accounts, financial statements, investments (especially if they own the business themselves), and others. No matter where they are, a pharmacist will make use of accounting knowledge.
Pharmacists may find themselves, say, in a manufacturing plant. In this setting, one might be expected to account for equipment, raw materials, or perhaps personnel costs. In a hospital setting, pharmacists need to keep a close eye on inventory for the most part. In community settings, a pharmacist is expected to have the knowledge to manage most if not all financial matters of the business: inventory, accounts, financial statements, investments (especially if they own the business themselves), and others. No matter where they are, a pharmacist will make use of accounting knowledge.
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That's correct our knowledge of financial and managerial accounting is useful in all pharmacy practice settings. It will also have personal practical applications.
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Financial and managerial accounting involves the management of cash flow, inventory, liabilities, and other related aspects in general accounting as it is applied in businesses that will allow them to analyze situations and make predictions. This is a significant skill for pharmacists in general because it can be applied in various ways specific to the setting that they are working in. For instance, community pharmacists can use this knowledge to keep track of their inventory and to discern what kinds of medicines they must have more of. Hospital pharmacists can make use of these skills to not just keep track of their inventory, but to see any trends in the kinds of cases that their institution is handling often. Of course, industrial pharmacists use this often to detect changes in consumer behavior and to foresee what kind of drug product they should market or innovate next. All these situations and many more are reasons behind why financial and managerial accounting is helpful for pharmacists.
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