Industry sector:

Pharmacy: Cash sales

'Cash Sales' means all income from your main business activity which is received at the time of sale. Your main activities will be dispensing NHS prescriptions, providing NHS services and selling a range of healthcare items, toiletries and so on. If your pharmacy is located in England, you'll receive prescription charges from some patients at the time that you dispense their prescription and these amounts should be entered here, as should payments received from customers buying things from your shop. Don't enter in your cash flow forecast the monthly reimbursement for NHS work that you will receive. This goes under 'Cash from debtors'.

Although many customers may pay you in cash, remember that cash sales also include:

  • debit and credit card payments
  • cheques, if you accept them

To prepare your cash flow, you will need to estimate how much income you will receive over the next 12 months. To do this, estimate how much NHS work you will do and how much income you will receive from non-NHS retailing activities, including VAT.

There are a number of things to consider when you make your estimates:

Your business

  • where will your premises be. It is very important that the pharmacy is easily accessible to a wide range of customers. Ideally it should be located in a residential district, a busy shopping parade or near a GP's surgery or health centre
  • by law there must be a pharmacist present when the pharmacy is open - you will need to consider where you will get locums from and what methods you will use to monitor their performance
  • how big will your premises be. This will affect the amount of non-NHS stock such as toiletries, health care products, cosmetics and so on that you can display. You will need to provide a consultation area for patients if you want to offer Advanced services such as Medicines Use Reviews (MUR)
  • what will your opening hours be. The NHS pharmacy contract requires you to provide at least 40 'core' contractual hours per week
  • what security measures will you put in place to protect your stock

Your products and services

  • apart from dispensing NHS and private prescriptions, what other services will you offer
  • what product ranges will you stock
  • will you offer digital printing services, for example by installing an instant photo kiosk
  • will you sell by mail order or online
  • will you offer a prescription collection and delivery service


  • what will be your pricing policy for the retail side of your business. You must be able to cover your costs, overheads and drawings
  • will you offer discounts (for example to pensioners) or special offers


  • any counter staff you employ to serve medicines to customers must have received training to Royal Pharmaceutical Society standards. Pharmacists and pharmacy technicians must speak English well enough to practise safely
  • what will be your policy on staff discounts
  • how will you monitor staff theft

Future developments

Demand for community pharmacies is likely to remain reasonably strong because of the growing number of elderly people and because the government is keen to encourage people to take advantage of the healthcare services that pharmacies offer. However, bear in mind that funding cuts mean that pharmacies are being asked to do more for little or no increase in payment. On the retail side, independent pharmacies face strong competition from supermarkets, pharmacy chains and online pharmacies and this is likely to increase.

To help with your decisions, click on the checkpoints for guidance. Once you have worked out a Cash sales figure add it to the relevant field in your cash flow forecast.