Accounting Challenges in the Life Sciences Industries – (Pharmaceutical, Cosmeceutical, Nutraceutical and Medical Supplies)
Life Science companies tend to be global in nature; that is they purchase materials from, and sell products to, various countries around the world. This requires an ERP that is both multi-lingual and multi-currency.
Lot/Serial Number Traceability
The most critical challenge to any organization in a Life Science industry is the tracking of all materials through the entire purchase and sale cycle by lot number or serial number. The raw materials of each item sold must be easily traced to their source.
Life Science industries are strictly controlled and audited by various governmental agencies, each of which have their own reporting requirements. Companies selling products to a global market must comply with the regulations in each of those markets.
Each product purchased and sold must be carefully controlled according to their release and expiry dates. Certificates of Analysis (COA’s) must be attached to each individual item record and accompany Bills of Lading and other documents as dictated by customers and regional legislation.
Depending on the organization’s fulfillment strategy, product (existing and future) may need to be assigned as orders are received on either a FIFO or LIFO basis. This requires software with complex algorithms and the reporting capability to display all movements, past and future, of a specific lot.
Product pricing must be flexible to allow for standard and customer-specific pricing models. Pricing should also be subject to any one of various structures including customer type, volume discounts and negotiated contracts. Due to currency fluctuations, prices need to be re-evaluated and modified frequently.