By Rachel Teichberg, CVPM, CVBL
The relationship you have with your inventory is complicated. It plays such a major role in the practice, and often seems to have a mind of its own. Managing your inventory may often leave you frustrated, confused, and irritated. The trust between you and your inventory tends to waver as your software reporting can be questionable, and sometimes you feel like it’s simply out to get you. You’ve put many hours into improving systems and processes no to avail and feel like you just need to throw your hands up. I get it. I’ve been there. But it’s time to put your differences aside and work together to improve your relationship.
The reality is that your Cost of Goods Sold expense (COGS) is your second largest expense in the practice and can play a significant role in your overall profitability. If you’re looking to improve your bottom line, we often find unnecessary percentage points hidden in this category. The great news is that this is your lowest hanging fruit. Meaning, that controlling expenses in this area is the easiest starting point compared to your compensation or facilities/administration expenses. This is because, despite all of the complications outlined above, you have a lot of control over your inventory and can immediately implement change that can directly affect your overall profitability. Time for you and your inventory to get on the same page and start working together!
From the start, setting expectations regarding what you need from your relationship will be critical. In order to have a successful relationship, let’s first define what success looks like. Having a clear picture in your mind of what you’re looking to achieve will ensure that you’re creating a solid plan that will help you get there. Success could be measured by a combination of some of these examples: