Enterprise Resource Planning (ERP) Business Management Software for the Medical Device Industry
Helping Medical Device Manufacturing and Wholesale Distribution Businesses Meet the Excise Tax Challenges Head On
For more than thirty years, leaders within the Medical Device Manufacturing and Wholesale Distribution Industries have relied on Cornerstone’s dream team of specialists for cutting-edge software and technology solutions. As we’ve collaborated with manufacturers and wholesale distributors over the course of many years, we understand just how dramatically the medical device industry has been devastated by a 2.3% excise tax the government imposed.
What is the Medical Device Excise Tax?
The government has imposed a 2.3% tax that medical device companies are required to pay regardless of if a manufacturer has made a profit or not. The tax is assessed on gross sales of medical devices as opposed to profits. The 2.3% excise tax took effect on Jan 1 as part of ObamaCare. As a direct result of the excise tax, leaders of medical device manufacturing businesses have been struggling with losing such a large amount of their profits to the government, laying off employees, ending the production of new products, and more. Regarding the severity of the impact this tax has had, Mark Leahey, President and CEO of the Medical Device Manufacturers Association stated, “Each day that goes by with the medical device tax in effect is a major roadblock for patient care, job creation and innovation.”
Please see:
How is the Medical Device Tax Affecting Medical Mobile Apps?
Medical Device Excise Tax Impact on Mobile Apps
What is the IRS’ Definition of the Medical Device Excise Tax?
Medical Device Excise Tax Defined by the IRS
What is the Position of the Medical Device Manufacturers Association Regarding the Medical Device Excise Tax?
The MDMA is against the medical device tax and is in support of a full repeal of the tax. They work with elected officials to eliminate the tax so as to make patient care more affordable for patients.
What is Being Done to Repeal the Medical Device Excise Tax?
Repeal of the Medical Device Excise Tax
How Will Obamacare Affect Medical Device Manufacturers?
Medical device manufacturers that have tried not to lay people off for so long may have to start laying people off because of the taxes incorporated into Obamacare. For example, ADM Tronics, a medical device company, had to reduce overhead as a direct result of Obamacare. Andre DiMino told FoxNews.com, “We bought the company in 2004, never had a layoff. In fact, even during the recession, we added jobs. It wasn’t until this tax hit us that we had to do it.”
As the government has decided to take 2.3% tax on the gross sales of medical devices, this has negatively affected the growth of small, medium sized business and large medical device manufacturers as well as wholesale distributors. Manufacturers have prepared for the tax by both laying people off and putting production of new products on hold.
Some other issues that affect medical device manufacturers must comply with are:
- Inventory control- Medical device companies are required to track all items
- Tracking quarantined items- Out of spec. materials have to be put in a designated area
- Strict industry regulations- Any changes made to an original document must be tracked whether it is a documented procedure or a form
- Intellectual property- The royalties frequently have to be tracked (because of the owner of the IP, for example, the inventions or concepts that are used in the products they manufacture)
How Does Cornerstone Consulting Help Medical Device Manufacturers and Wholesale Distributors?
For many years, Cornerstone has collaborated with Medical Device Manufacturers and Wholesale Distributors to help them grow. The software and technology solutions Cornerstone provides can streamline and automate the business management processes of your entire enterprise. The integrated and automated software simplifies the processing of materials resource planning, customer relationship management, inventory control, warehouse management, sales, and financial accounting. For those companies within the Medical Device Industry, the device tracking is what sets this software apart from all the rest. Not only does the SAP Business One software solution streamline sales, financial, inventory, purchasing, planning and production management, it is also designed to support your research and development as well as your compliance teams.
Enterprise Resource Planning (ERP) Software for Medical Device Manufacturers and Wholesale Distributors
The SAP Business One ERP software system offers Medical Device Manufacturers and Wholesale Distributors a single platform of unified data, simple interface, easy navigation, cutting-edge dashboards and cockpits, mobility, and Crystal Reports. In addition, this software system is designed to help your business remain compliant as requirements and regulations change. With Business One you can: take control of your inventory; forecast and plan better than ever before; instantly know the exact location of your items; precisely manage the path your products; easily adjust batches; process error-free transactions and dramatically improve your bottom line.
- Bin management
- FDA compliance
- Material Requirement Planning
- Production Planning
- Purchase Planning
- Quality Control
- Lot traceability
- Costing
- Routing
- Financial management
- Data collection
- Bill of materials (BOMs)
Helping Medical Device Manufacturers and Wholesale Distributors More Efficient With Better Business Software
If you are the leader of a Medical Device Manufacturing or Wholesale Distribution company in need of an integrated, automated and streamlined business enterprise system, please call us.