Don’t give it away

Practices should spend significant time and effort establishing and nurturing relationships with their key suppliers.  These relationships, along with well-negotiated supplier agreements and close working relationships, will yield many opportunities for your practice to grow and improve profitability. 

Your suppliers have many capabilities to help improve the efficiency and effectiveness of your workflow.  Working closely with them can help you to reduce labor costs, improve inventory management, and reduce inventory costs.  All of these outcomes will drive additional profit to your bottom line.  Improved profit makes available more cash to reinvest in your practice to help it grow.  Profits help you hire good people and pay them well, purchase good equipment to improve the quality of medicine you can provide, and provides added financial security for all of those involved with your practice.

When you negotiate added discounts over and above normal pricing for the products and services you purchase to run your practice, it is usually recommended that you ask your suppliers to print the regular price of the product or service alongside your preferred price, side by side on every invoice.  Then, when your team enters pricing into your management system, use the regular price as your baseline in your system.  This allows you to capture the extra discount as added profit to help you grow your practice.  Don’t give it away.  You’ve worked hard to establish key relationships and supplier agreements.  Put those to work to return added profits to grow your practice.

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