ROI & IRS Code Section 179 Decoded

Return on investment (ROI) from the RxSafe 1800 pharmacy automation solution is achieved in several ways, from the features of the equipment and technology itself, to the very real tax benefits afforded by IRS Code Section 179.

Our Equipment and Technology

To begin with, the RxSafe 1800 enables one pharmacy technician to accurately fill up to 120 scripts per hour. In addition:  RxSafe 1800

  •        There is less fill labor
  •        Restocking is handled and tracked automatically
  •        Restocking and storage happens in expiration date order
  •        No lost or expired inventory means less waste

A two-tower RxSafe 1800 system holds up to 3600 stock bottles in just 30 square feet of space.  This means that simply by installing an RxSafe 1800, additional retail floor space can be made available!  More retail space means more revenue.

Narcotics in the RxSafe 1800 are locked and every employee “touch” is tracked. In fact, the RxSafe system is so secure it has U.S. Department of Defense approval for CII narcotics storage. Further, it can limit access to any drug by worker classification.  No losses to theft or diversion mean more profit, and more ROI.

Inventory is tracked in real time, so what needs to be ordered (and when) is exact, requiring less on-hand inventory.  Item-level inventory is managed by the system, so tracking occurs no matter the location of the goods, in or out of the safe. RxSafe is the only secured and monitored system of its kind on the market. Less on-hand inventory + no waste = less expense and increased profits.

Tax Savings Decoded

IRS Code Section 179 provides significant and immediate savings to businesses and individuals acquiring capital equipment.  The Section 179 tax deduction has  tax savings for pharmacieshelped small business owners offset the cost of capital equipment for years. In 2016, more good news for business owners came about with the passage of the PATH Act — making permanent the $500,000 purchase price tax savings limit afforded by Section 179.

Regardless of the overall return on investment, the immediate purchase decision of any equipment has to take into account a pharmacy’s available cash on hand.  The IRS Code Section 179 deduction is a huge boon to cash flow, and can significantly offset the purchase price of pharmacy automation equipment. Of course, your accountant is your best source for information specific to your pharmacy, but at RxSafe, we can help guide you to some tools and experts to help you “decode” IRS Code Section 179 and apply it to your unique situation.  For example, you can use RxSafe’s Section 179 calculator to figure out the hard savings available through this program.

You may also like to know what financial expert Peter Davison at Advantage Financial Services has to say about IRS Code Section 179, as applied to the capital equipment cost of RxSafe 1800.  It’s really good news!  Peter has been working with RxSafe and independent pharmacy owners since 2012. In this video, Peter explains how IRS Code Section 179 can be used to put cash back into your pharmacy’s register right away. Here is a math-made-simple scenario from Peter’s video:

If you take just some simple math on a two-tower RxSafe system at a 25% tax bracket, $200,000 in expense would equate back out to approximately $50,000 in tax savings come April.  That’s a significant cash flow.  What’s nice about that is, if you’re using an equipment lease or a financing agreement, you may actually be cash-flow positive just from that experience. Example: a $200,000 investment on a capital lease on a seven-year term is approximately $15 per thousand or $3000 per month, plus or minus. On a five-year term it might be more like $20 per thousand or in the neighborhood of $4000 per month.  If you just do some simple math, $4000 times 12 months is $48,000 on a tax savings of $50,000, that could be a positive income, not to mention all of the benefits you’d get from the RxSafe.

In a companion video, RxSafe customers weigh in on how they applied the IRS Code Section 179 deduction in their purchase of the RxSafe 1800 to affect cash flow positively and take advantage of the ROI benefits offered by our pharmacy automation system.

RxSafe technology positively impacts your pharmacy’s ROI in so many ways.  Our technology means cost savings related to less theft and diversion, expired products, inventory carrying costs, and increased narcotics security and management.  In addition to contacting your accountant, we invite you to use the features (videos, graphs, and the calculator) on our website to learn more about how IRS Code Section 179 can be used to get your RxSafe pharmacy automation system working profitably for you in as little as 12 months. Feel free to contact us with questions or for more information at 877-797-2332.

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