What’s Really Draining Your Cash Flow (And How to Take Control)

Let’s talk about cash flow.

If you’re an independent pharmacy owner, you’ve likely felt it. Those tight weeks where payroll, drug bills, and reimbursements don’t quite line up. You’re doing everything right, filling scripts and taking care of your patients, but somehow the numbers don’t add up at the end of the month. That stress is real, and it’s happening to a lot of owners right now.

Cash flow is one of the biggest challenges our members face, especially in today’s environment. But the good news is, there are things you can do right now to gain clarity, free up dollars, and start to feel more in control. I’ll walk you through the most common cash flow problems I see and share some simple steps. IPC can help you every step of the way.

Reimbursement has always been a moving target, but right now it’s more complicated than ever. We’re seeing the effects of DIR fees going away, which caused a major cash flow disruption. The Inflation Reduction Act starts in January. Your margins are getting tighter. And on top of that, the timing of your revenue and expenses might be completely misaligned.

If your wholesaler pay terms don’t line up with when you receive payments from insurance companies, it creates a lot of financial friction. You might be paying out before the money ever hits your account. And unless you’ve got a strong handle on those big cash movements—when money comes in and when it goes out—it’s really tough to manage.

When cash is tight or unpredictable, the most common place owners lose control is inventory. You have to know how many dollars are sitting on your shelf. If you’re not paying attention to what’s being ordered, especially branded drugs, you could be tying up way more cash than you realize.

Just a few overbuys here or there? It adds up fast.

Labor is the other big one. Your people are one of your biggest costs, which makes them one of your biggest opportunities. If you’re overstaffed or not operating efficiently based on your prescription volume, your labor dollars aren’t working as hard as they could be. Every pharmacy is different, but being intentional about your staffing levels and workflows is key to improving your bottom line.

If you’re not sure where to start, begin with your inventory turns. It’s a quick calculation that gives you immediate insight and often quick wins.

Here’s how to do it:

• Look at your total drug purchases over the last 12 months.
• Divide that number by the current inventory value on your shelf.

If that number is below 12, you probably have too much inventory. That’s cash you could be putting back in the bank.

If you’re a GPR customer with McKesson, a GPR score over 100 also tells us you’re carrying too much inventory. And if you’re not sure how to calculate it or interpret it, just reach out. My team and I are happy to help walk you through it.

This is where IPC comes in. We’re not just a warehouse. We’re your business partner. And we have a whole suite of tools and services designed to help you run leaner and smarter.

• Pharmacy Marketplace, RxAssassin, and SureCost: These tools help you buy smarter. That means better inventory control, contract compliance, and the right product at the right price for your deal.
• Financial Reviews: My team can sit down with you, go over your financials, and show you how you compare to the market. We look at key metrics like labor, inventory turns, and purchasing strategy, then give you a roadmap to improve.
• Strategic Support: If you’re trying to grow or pivot your business, we’ll help you build a plan that doesn’t put more strain on your cash flow. It’s about sustainable progress, not short-term patches.

One of the easiest and most overlooked ways to improve cash flow is understanding your pay terms and timing.

Too many owners don’t really know when their money is coming in or when it’s going out. You need to know your revenue schedule from insurance companies. You need to know exactly when you owe your wholesaler and when payroll hits.

If those dates are off and money is going out before it’s coming in, you’ll always feel like you’re behind.

Getting those timelines aligned can immediately free up cash and give you more room to work with. And again, we can help you figure out where things stand today and how to improve the timing so your money works better for you.

We talk to owners every day who feel like they’re doing all they can but still aren’t getting ahead. If that’s you, start by reaching out.

A financial review costs nothing. We’ll walk through your numbers with you, identify the areas that are hurting your cash flow, and help you find the right tools and strategies to fix them.

This isn’t about adding more to your plate. It’s about giving you visibility, control, and support so you can make confident decisions for your business.