ApothecaryRx
| Company: | ApothecaryRX |
|---|---|
| Solutions: | Infor FMS, Infor PM |
| Product: | SunSystems, Query & Analysis |
| Industry: | Healthcare |
| Revenue: | US $90 Million |
| Employees: | 300 |
| Country: | USA |
About the company
Small-town pharmacies tend to have deep connections to their communities. They deliver exceptional levels of service and have a personal relationship with their customers. Store owners hoping to sustain this level of community commitment even as they face retirement now have a solution.
ApothecaryRx, based in Golden Valley, Minnesota, buys and operates retail pharmacies often in proximity to clinics, hospitals, medical office buildings, and healthcare campuses. A subsidiary of Graymark Healthcare, the company acquires independent pharmacies and enables them to remain successful by leaving intact the features that have led to their success: the name, the staff, and their style of customer service. Spearheaded by entrepreneur Lew Zeidner, ApothecaryRx has been growing at an extraordinary clip. It now owns and operates 18 pharmacies in 5 states generating approximately $90 million annually.
Setting the strategy
Given ApothecaryRx’s rapid growth over a two-year period, it was not surprising that its early reliance on Intuit’s QuickBooks as a financial solution would prove untenable. While the software enabled the company to get off the ground, the demands and complexities of the business soon overran the application’s capabilities. “We needed a robust financial solution to handle the number of sites we own and the sheer volume of transactions we have to track,” says Kerrie Hughes, Controller, ApothecaryRx. “We knew our current solution was not really viable in terms of where we were headed. Within six months, we had outgrown the system and it was becoming very painful.”
With its parent company planning to go public, ApothecaryRx needed a financial platform that would provide proper controls and support management decision-making. “The challenge was to find a solution that would grow with us,” says Grant Christianson, Vice President, Finance & Accounting. “We needed a system that would prove effective for a $50 million company and equally effective for a $500 million company. The search was on to find a system that would go to the next level when our company went to the next level.”
Getting business specific
ApothecaryRx was encountering several types of system limitations. For instance, the finance team needed to make repeated entries into Accounts Receivable and Accounts Payable, as opposed to a single journal entry into an account that would reflect multiple items. This added numerous steps to the accounting process, diminishing the group’s productivity and adding frustration. “Instead of posting just one journal entry” says Hughes, “we had to post 50 journal entries to get the same result. It was a significant resource drain to keep up with our transactional volume.”
The company was also challenged by the weak reporting capabilities in the existing software because it could not be effectively integrated with its Microsoft® Excel®-based reporting activities. To enable staff to easily create reports, a robust report writer would be essential. Such capabilities were necessary not only to establish proper financial controls, but also to provide the reporting and analytics to support management decision-making. “Management needs appropriate reporting to manage the business in a timely fashion,” says Hughes. “We needed to be able to easily load information such as detailed plan and forecast data and key statistical metrics into our financial reporting system. Consolidated forecasting for all sites-or even site-by-site forecasting-wasn’t possible with our old system.”
To address such challenges, ApothecaryRx conducted a market search to identify appropriate solution providers. After narrowing the field to three possible financial software solutions, it ultimately chose Infor FMS SunSystems, which most effectively met its selection criteria. “Infor FMS SunSystems offered the most flexibility and addressed our specific needs,” says Christianson. “The other systems addressed our criteria, but weren’t as efficient or clean. The Infor solution offered features for reporting as well as massaging and working data, which was lacking in the other systems. To us, it made a huge difference. The ability of Infor FMS SunSystems to help enhance our process efficiency, saving us time and effort in our day-to-day work, were key factors in our decision.”
Seeing results
ApothecaryRx’s finance team, comprised of just three people at this point, was clear about what it wanted to accomplish in the implementation. With the assistance of one of Infor’s partners, Minerva Business Systems, Inc., the company was able to implement the software in just six weeks through a rigorous 10-stage process. Minerva managed and participated in all phases of the project, led the design workshop that re-designed the company’s chart of accounts and analysis dimensions, and provided training to the accounting users.
At the heart of Infor FMS SunSystems is a single, integrated ledger that combines the functionality of general ledger, receivables and payables ledger, project ledger, and cashbook and user-defined ledgers. This ledger provides for a powerful, real-time financial transaction processing engine that is immediately updated by any financial posting.
For ApothecaryRx, this elegant solution led to an array of process efficiencies. Hughes points to the company’s new ability to rapidly upload financial data. “Previously, everything had to be hand-keyed,” she explains. “Now, we’re able to easily upload daily sales information from each of our sites. That’s critical.” The company also streamlined its finance and accounting processes. Vendor invoice reconciliations that previously took 8 to 16 hours now take a single hour. “That’s a huge resource savings,” says Hughes. “We can reallocate those resources to other areas that we need to focus on.”
Additionally, ApothecaryRx is realizing substantial benefits in terms of reporting and analytics. Using Infor’s PM Query & Analysis reporting module, end users and managers can quickly access the data and produce meaningful reports by “slicing and dicing” the data in many different ways. Reports can be generated directly in Excel spreadsheets, and can be combined with other data that is entered directly into the spreadsheet. Since accounting staff are familiar with Excel, this is a more intuitive interface than other non-user friendly report writers. Reports can also be produced directly as Microsoft Word documents for financial reporting to the SEC. If an adjustment is entered into Infor FMS SunSystems, the Excel or Word files are immediately updated, avoiding a complex series of adjustments through multiple spreadsheets that occurs in most other financial reporting systems.
“Reporting activities that once took me a day can now be handled quickly and efficiently,” says Christianson. “The key win for us is the ability to play a more strategic role and provide better management guidance. Instead of spending 95% of our time trying to put data together, we’ll end up spending 95% of our time analyzing and working with the data and reporting to management. This is a significant leap forward relative to what we had been doing.”
Now, the finance team can quickly and easily track and analyze business drivers such as prescription volume and type, headcount and hours worked, and gross margin on a site-by-site basis. Statistical and trend analysis of this sort assists the company’s operations team as it heads out into the field to provide guidance and support at its various sites. “We now can be more of a strategic partner to our operational group,” concludes Hughes. “Instead of chasing data, we now provide insight. We enable them to look at how the sites are performing and ensure they are implementing best practices. Those capabilities often translate into profitability.”
Doing business better
What’s ahead for ApothecaryRx? The finance team will be developing standardized reports to provide deeper insight into the business and enhance the company’s planning process. This analysis will further enhance the company’s acquisition strategy as it hones its understanding of what to look for in a new acquisition target, how to improve the due diligence process, and how to bring best practices to bear after an acquisition. Finally, the finance team expects to realize new process efficiencies that enable team members to spend more time in the field supporting operations. “Our acquisition sites are still important, but tending to existing sites is just as important,” says Christianson. “The finance team can help those sites grow and develop, and Infor has provided the right tools to help us.”
Post Script
Minerva has continued to support ApothecaryRx after the initial project, and has implemented additional modules to meet ApothecaryRx’s requirement for continuous improvements in its business processes. The Vision Budget Management module was implemented to enhance the budgeting and forecasting processes. This module allows staff to manage the workflows of the budget cycle and automates the upload of budget and forecast data into SunSystems. An automated bank reconciliation module (PA Bank Reconciliation) was implemented to reduce the time taken to reconcile the multiple bank accounts, and this has led to bank accounts being reconciled on a daily basis, eliminating the effort required at month end. In addition, the PA Bank Reconciliation module was used to reconcile the insurance billings to the daily sales summary numbers. This process used to take a long time at month end and has now been streamlined. Overall, ApothecaryRx has been able to reduce the month end close from 12 days to 3 days, allowing staff to spend more time analyzing data and providing support and guidance to its sites and at the same time providing faster and more relevant management information. Hughes summed it up this way: “we have been able to use the management information we get from SunSystems to improve the profitability of our existing sites”.