Boosting Practice Profits with Strategic COGS Management
Dr. Sharma's medical practice was experiencing declining profit margins despite a steady patient flow. She suspected that rising supply costs and inefficient inventory management were contributing factors but lacked a clear understanding of her actual Cost of Goods Sold (COGS). This uncertainty hindered her ability to negotiate better rates with suppliers or implement effective cost-cutting measures.
Using the Cost of Goods Sold Calculator, Dr. Sharma meticulously tracked her direct medical supplies, lab expenses, and a portion of her staff salaries directly involved in patient care. The calculator revealed a significantly inflated COGS, prompting a renegotiation with her primary medical supplier, resulting in a 7% discount on key supplies. Furthermore, she streamlined her inventory management, reducing waste and obsolescence, contributing to an overall $12,000 annual reduction in COGS.
Dr. Sharma inputted her beginning inventory value, purchases of medical supplies, and ending inventory value into the Cost of Goods Sold Calculator. The clear and concise output provided a detailed breakdown of her COGS, highlighting areas for improvement and enabling informed decision-making.
$12,000 annual reduction in Cost of Goods Sold, increasing net profit by 4%.
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