Have you ever looked at the accounts for your pharmacy, desperately trying to find some way to take yourself out of the red and into the green? Do it too frequently, and you might start finding that the figures are bending to your desires, rather than the reality: You could have become another victim of accounting confirmation bias.
However, there is a solution at hand. Here at DBS Accountants, we can take the stress, worry and difficulty of accounting for your pharmacy’s incomings and outgoings and ensure you are getting the full, realistic picture.
What is confirmation bias?
If you run your own pharmacy, you have likely run into more than one or two scenarios where the stress has been overwhelming – especially if you are also in sole charge of the accounts. According to the Australian Psychological Society’s 2015 survey, finances topped the charts of most-stressful things in the modern person’s life.
But this doesn’t just affect your blood pressure. Worrying about and trying to adjust your financial situation can end up doing serious damage to your business outcomes. When you worry too much about something and don’t see a solution, you might start trying to interpret current evidence in a way that already confirms what you believe about your business, whether positive or negative. This is the definition of confirmation bias – focusing in on data that confirms what you already think.
How does confirmation bias affect my business?
Any of these issues could have been revealed by the right accounting process.
Accurate data about your payroll, your costs and your profits in your pharmacy is an integral part of interpreting where your business needs adjustment – if it needs it at all. If you are misinterpreting that data for whatever reason, you could find that you are hiding a serious problem in your overall business strategy.
For example, did you know that from 2014 to 2015, the Australian Securities and Investments Commission identified that the most common reason for pharmacy insolvency was poor strategic management of business? That was followed by poor cash flow, and poor financial control. Any of these issues could have been revealed by the right accounting process, but confirmation biases may have skewed perceptions to the point where it appeared that nothing was wrong.
Solving business confirmation bias
There is a way to avoid confirmation bias, however. Put your trust in an accounting professional such as those at DBS Accountants. We’re specialists in pharmacies and other medical businesses, so you know we can identify your unique issues. Don’t rely on confirmation bias, get in touch with one of our team today.