Setting up inventory correctly in a veterinary practice management system is critical for ensuring accurate financial reporting, efficient operations, and informed decision-making. When inventory is properly configured, practices can track usage, control costs, prevent stockouts or overstocking, and align purchasing with actual demand. It also supports precise cost of goods sold (COGS) calculations, which are essential for evaluating profitability and setting appropriate pricing. Moreover, integrating inventory with other systems—such as invoicing and supplier platform streamlines workflows and reduces manual errors. A well-organized inventory system ultimately empowers the team to deliver better patient care while maintaining strong financial health. Here is a guide to help you set up inventory in Shepherd veterinary practice management software.
How to Set Up Inventory
Unit of Measure (UOM) – This is how you track the product in inventory, not necessarily how it is ordered.
- Example: For tablets and injectables, use per tablet or per ml instead of per bottle. This allows flexibility when switching between different bottle sizes (e.g., 50-count vs. 100-count tablets or 100ml vs. 50ml vials).
- For vaccines and food, use per case or per tray, as vendors typically sell them in fixed quantities.
Unit Count – The number of individual units within the UOM.
Example:
- If your UOM is box and each box contains 6 tablets, the Unit Count is 6.
- If your UOM is tray and there are 50 doses per tray, then the Unit Count is 50.
Type (Selling Unit) – This is how you plan to sell the product.
Example:
- If a box contains 6 tablets, but you sell them per tablet, then the Type is tablet.
- If a tray contains 50 doses, but you sell them per dose, then the Type is dose.
Cost Per UOM – The total cost of the UOM.
Example:
- If a box of 6 tablets costs $60, then the Cost Per UOM is $60.
- If a tray of 50 doses costs $210, then the Cost Per UOM is $210.
Cost Per Sold Unit – The cost per individual selling unit.
Example:
- If you sell by the tablet, and the box of 6 tablets costs $60, then the cost per tablet is $10 ($60 ÷ 6).
- If you sell by the dose, and the tray of 50 doses costs $210, then the cost per dose is $4.20 ($210 ÷ 50).
This setup ensures accurate tracking, pricing, and reorder levels, even when dealing with different packaging sizes.
Setting Reorder Levels
Your minimum and maximum reorder quantities should be based on the unit type you purchase while considering how you track inventory.
- If you buy tablets in bottles but track them per tablet, set your reorder levels based on tablets, not bottles.
- Example: If you buy bottles of 100 tablets and want to reorder when you have 50 tablets left, your minimum reorder level is 50 tablets, not 1 bottle.
- If you buy vaccines in trays but sell them per dose, set your reorder levels based on doses.
- Example: If a tray contains 50 doses, and you want to reorder when you have 10 doses left, your minimum reorder level is 10 doses.
Setting Up Inventory for Selling Both Single-Dose and 6-Month Dose Preventatives
Since Shepard does not allow a single inventory pool to be used for different packaging options, you have a few options for managing this efficiently:
Option 1: Hold All Inventory Under the 6-Month Dose (Manual Adjustments Required)
- Keep all inventory under the 6-month dose count.
- When dispensing a single dose, manually adjust inventory:
- Reduce one 6-month dose from inventory.
- Add six single doses to the single-dose inventory.
- This method requires manual tracking but ensures you don’t overcount inventory.
Option 2: Separate Inventory for Single and 6-Month Doses
- Physically separate stock on shelves:
- Left side: Full 6-month doses.
- Right side: Opened boxes for single doses.
- You must manually transfer doses from the 6-month stock to the single-dose stock when breaking down boxes.
- This method prevents confusion but requires extra tracking.
Option 3: Sell by the Dose Instead of Packaging (Recommended for Simplicity)
- Track and sell everything per dose, rather than by 1-month or 6-month packs.
- Set pricing accordingly:
- Charge per dose and multiply for bulk purchases (e.g., 6 doses = 6x price).
- Offer discounted bundles for 6 or 12-month purchases instead of tracking them separately.
- This avoids the need for manual inventory transfers and simplifies tracking.
Best Practice:
Most clinics use Option 3 (selling per dose) to avoid manual adjustments. If you need to run promotions, you can create bundled discounts instead of managing a separate inventory for different package sizes.
Need help? Reach out to our team. They can guide you through the process.