Why supplier accounts get messy
A medical store usually buys from several distributors, sometimes from the same distributor several times a week. Each delivery comes with an invoice, some come with free goods or schemes, and every few weeks there are returns for breakage or near-expiry stock. Payments are made by cheque, bank transfer or cash, often in round amounts that do not match any single bill.
After a few months, many owners are not sure what they owe. They rely on the distributor's statement, which may or may not include every return. A clear supplier ledger on your side fixes this.
Enter every purchase bill the same day
The most important habit is entering purchase bills on the day they arrive. If bills pile up in a drawer, stock in your system is wrong, expiry lists are incomplete and you cannot check the distributor's statement properly.
- Enter supplier name, invoice number and invoice date
- Record each item with batch, expiry, quantity and rate
- Note free quantities separately from billed quantities
- Attach or file the paper invoice with the entry number written on it
Record payments against bills
When you pay a distributor, record which bills the payment covers. If you pay a round amount, mark the bills it clears and leave the balance open on the last one. This makes it easy to answer the question every representative asks: which bills are still pending?
Write down the payment mode and reference number, such as cheque number or bank transaction ID. If there is ever a dispute, this saves a lot of searching.
Track returns and credit notes
Returns are where most money quietly disappears. You hand over a bag of near-expiry items, the representative signs a slip, and then the credit note takes weeks or never arrives.
Record every return against the supplier the day it leaves your store, with batch numbers and quantities. Then keep a list of returns that have no credit note yet. Bring this list up when you next talk to the distributor.
Match your ledger with the distributor's statement
Once a month, ask each main distributor for a statement and compare it with your ledger. Go line by line. Differences usually come from a few common causes.
- A bill entered twice, or not entered at all
- A payment the distributor has not yet applied
- A return credited by them but not recorded by you, or the reverse
- Rate differences between the order and the invoice
- Scheme discounts promised but not shown on the bill
Plan payments by due date
Most distributors give a credit period. Sort open bills by due date and plan payments for the week. Paying on time keeps the relationship good and often means better service when stock is short. Paying early without a reason, on the other hand, ties up cash you may need for fast-moving items.
Common mistakes to avoid
These cause most supplier disputes in small pharmacies.
- Paying from the distributor's statement without checking your own records
- Not recording which bills a payment covers
- Forgetting returns once the bag leaves the store
- Mixing personal and business payments in the same entries
Watch schemes and rate changes
Distributors often run schemes such as free quantity on a minimum order or a lower rate for a limited period. Note the scheme terms when you place the order, then check the invoice when goods arrive. If the free quantity or rate is missing, raise it with the representative that week, not at the end of the quarter. Also keep an eye on rate changes for items you buy often. A small increase on a fast-moving item adds up over a year, and it may be worth comparing with another distributor.
Keep it simple and regular
You do not need an accounting background to keep good supplier ledgers. You need the same few steps done every day and a short check every month. If you have an accountant, share purchase records with them regularly rather than once a year, because it also makes GST filing easier.
How VegaMed helps
VegaMed keeps a ledger for each supplier with purchase bills, payments and returns, so open bills and pending credit notes are easy to see. Purchase entries also feed batch and expiry tracking and GST reports. To see it with your own suppliers, ask for a free demo on WhatsApp at +91 95116 38160.
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