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 cost to bring the values at
the store and dispensary into same unit.
 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?