Auditable Pharmacy

transactions and Services

(APTS)
Chapter Six-Managing
Pharmaceutical Transactions: D.
Pharmaceutical Inventory
JUSH
in collaboration with USAID/SIAPS
 Outline of presentation
Objectives of presentation

What inventory is

Purpose of inventory
Steps to take inventory

summary
 Objectives
At the end of the session participants
will be able to:
Illustrate inventory taking steps
Explain advantages of taking physical
inventory
 Topic outline:

Preparation for Inventory:

Formats for inventory
Steps of recording the inventory at the store
Steps of recording of inventory at the dispensaries,
wards and other service units
The importance of expiry date, cost, strength, dosage
forms of pharmaceuticals for inventory
Inventory of Medicines
Taking physical count at the store and dispensaries
The advantages of Bin/Stock cards during inventory
Finalizing the Inventory:
Completing the inventory
Reporting the inventory
 Purpose of inventory
The purpose of inventory is to ensure:
Continuous availability of essential medicines at
all times in adequate quantities

To monitor losses (expiry, pilferages, etc) and

over & under stocks.

For proper inventory to take place there has to

be an appropriate recording of transactions at
the store and dispensary.

 Inventory
Stock card and bin cards are used to track
the movement of stock (issues and
receipts) from and to the pharmacy store.

While credit sales tickets and or registers

and cash sales tickets are used to monitor
the stock movement and value of
inventory at the dispensary and other
service delivery units.
 Inventory
The inventory at the pharmacy store and dispensing

outlets is carried out by doing physical count.

In order to conduct physical inventory, two distinct

inventory forms are applied (one for the pharmacy

store and the other for dispensing outlets).

The tools used to conduct inventory at the store and

dispensary are slightly different (refer both pharmacy

store and dispensary inventory forms).
 Inventory
The main reason for using different
tools is because of the differences in
the type of information available at
the dispensary and pharmacy store.

Stock card balance, discrepancy and

cost of medicines can be easily
obtained from the store whereas
physical count and retail price are
readily available at the dispensary.
 Inventory
As a result, the cost of medicines at the
dispensary can be calculated from the
retail price after doing the physical count.

The inventory at the pharmacy store is

valued based on the cost of medicines;
whereas the inventory at the dispensary is
valued based on retail prices of medicines.
 Inventory
In order to balance the total transactions
(receiving, issuing and use) of the health
facility, the cost of medicines at the
pharmacy store and dispensing outlets
including service units should be added up
together.
In doing so, the monetary values (total
selling price) of the physical inventory at the
dispensing outlets should be converted into
 Inventory
The total cost of the ending balance of the previous quarter

+
The total cost of stock received during the current quarter

-
the total cost of sales

=
should be balanced to the total cost of the stock at hand
obtained during physical inventory of the current quarter.
 Inventory
Physical inventory is carried out every
quarter. (at end of September,
December, March and June of the
budget year)
The inventory should better be taken
on weekends whenever possible.
 Inventory
Before inventory:
Members of the group doing the inventory are assigned
by the head of the health facility.(The pharmacy
accountant, who should always be part of the group)
the stock at the pharmacy store and dispensary should
be arranged in such a way to facilitate physical count
(i.e. grouped according to expiry dates, codes, cost,
etc).
medicines at store and dispensary should be registered
in their respective inventory forms
 The group assigned to carry out the inventory
should:
make sure that all sections of the inventory forms
(that need to be filled before and during the
inventory) are properly completed, signed and
submitted to the concerned authorities of the health
facility.
The physical inventory group should identify
information in the inventory form to be filled:
Before inventory
During inventory
After inventory
in the store and dispensary
 During inventories
Actual physical count should be carried
out in the presence of the responsible
persons in the respective locations (e.g.
store manager, dispensers, etc).
 After inventories
The pharmacy accountant, who should
always be part of the group, has to
complete the section to be filled after the
inventory.
The authority of the health facility should
assign an internal auditor to verify all the
findings of the physical inventory.

In the store and dispensary

Inventory
 Questions
If the total sum of the inventory
taken at price in the dispensary is
equivalent to 125,000 birr,
Then what was the total cost of the
medicine in 25% profit margin
What are the main reasons that
inventory takes lots of time ? Or how
can we finish in few days?