Pharmacy Inventory Software for India

Item-wise stock is not pharmacy inventory — batch-wise is

Most "stock management" software, pharmacy-branded or not, keeps one number per product: how many units of Paracetamol 650mg you have. That number is an item-level total, and for a pharmacy it is not enough to run the shop on, because it cannot answer the two questions that actually matter — which of those units expires first, and which purchase invoice they came from.

Batch-wise stock stores every receipt as its own row: batch number, expiry date, quantity, purchase rate and the distributor it arrived from. The item total becomes a sum of batches rather than the only thing recorded. That is what makes an accurate expiry report possible, what makes a return-to-distributor claim have the right batch number on it, and what makes a recall actionable instead of a guess.

This is not just good practice — the record-keeping rules assume it. Under Rule 65(3)(1)(f) of the Drugs and Cosmetics Rules, 1945, the sale record for a drug in Schedule C, H or H1 must additionally give the manufacturer's name, the batch number, and the date of expiry of potency. Rule 65(4)(4) requires the same at the purchase end — every purchase record must show the batch number and manufacturer, not just a quantity. An item-wise total physically cannot produce either record. Software that only tracks totals is not a lighter version of pharmacy inventory software; it is missing the part the law is checking for.

FEFO vs FIFO — the difference that decides what expires

FEFO — First Expiry, First Out — dispenses whichever batch expires soonest, regardless of when it arrived on the shelf. FIFO — First In, First Out — dispenses whichever batch arrived earliest, regardless of its expiry date. In most retail categories the two amount to the same thing, because stock generally arrives in the order it will expire. In pharmacy they routinely do not: a delivery that lands today can carry a shorter dating than a pack that has been sitting on the shelf for two months, because manufacturing dates and supply timing don't move together.

Picture a pharmacist restocking a fast-moving antibiotic. The new carton from the distributor has four months left on it; the half-strip still on the shelf from three weeks ago has seven months left. Sell in arrival order (FIFO) and the short-dated carton sits underneath the long-dated one until it is too late to return. Sell by nearest expiry (FEFO) and it clears first, while it is still someone's medicine and still within the distributor's return window if it doesn't.

The only honest test of whether software actually implements FEFO is what happens at the counter: is the batch chosen automatically by expiry, or does the person billing pick from a list? A dropdown of batches is not FEFO — it is FIFO with an extra tap, because under pressure at a counter, people take the first row. See our glossary entry on FEFO for the short version.

Reorder level: the basics, and why a flat "low stock" number is a trap

A reorder level (or reorder point) is the stock quantity at which you should place a fresh purchase order, set so the new stock arrives before the old runs out. The standard formula is:

Reorder Level = (Average Daily Usage × Lead Time in Days) + Safety Stock

Average daily usage is how many units of that exact medicine you typically sell in a day. Lead time is how long your distributor takes to deliver once you order. Safety stock is a buffer against a slower delivery or a busier-than-usual week. All three inputs need real sales history to be meaningful — this is the part inventory tools tend to skip.

Here is the trap: a flat rule like "alert me when stock falls below 10 units" looks like a reorder level but isn't one, and it fails in both directions. For a fast-moving medicine selling four strips a day, 10 units left is barely two and a half days of cover — the alert fires too late. For a slow mover selling one strip a month, 10 units is ten months of cover; a "low stock" badge on it is not just unhelpful, it points a pharmacist toward reordering the one item that is actually at the highest risk of expiring unsold, not restocking. The unit itself can also be ambiguous — "10" might mean 10 tablets, 10 strips, or 10 bottles, depending on how the pack size was recorded, so a bare count can be misread before the demand question is even asked.

The honest position is: a reorder level is only as good as the sales history behind it. A shop with a few weeks of real billing data can size one properly. A shop with none cannot, and software that invents a confident number anyway is guessing on your behalf. Our own reorder level glossary entry and the free margin calculator are useful alongside this once you have a few weeks of billing to work from.

What the September 2025 GST cut changed about your stock's value

If your inventory software is still valuing stock against a 12% GST slab on branded medicines, it is now wrong. Before the reform, HSN 3004 medicines were split across slabs — WHO/NLEM-listed essential formulations at 5%, most branded and OTC formulations at 12%. At its 56th meeting (3 September 2025), the GST Council recommended cutting GST on "all other drugs and medicines" from 12% to 5%, effective 22 September 2025 — moving the great majority of pharmacy stock onto a single 5% slab in place of that older split. The same reform took GST to nil on 33 specified lifesaving drugs, and from 5% to nil on 3 lifesaving drugs used for cancer and other severe chronic conditions.

For inventory software this isn't just a tax-filing detail — GST is part of how landed cost and margin get calculated on every batch you receive, and it changes your GSTR-1/3B input credit workings too. Any stock valuation, margin report or purchase-cost calculation still assuming the pre-reform split is quietly overstating tax on most of what's on your shelf as of this writing (September 2026). It's also a reminder that HSN and GST on medicines are not something worth maintaining by hand per product — they belong in a table that gets updated once and applies everywhere, not retyped on every purchase entry.

The return window, not the expiry date, is your real deadline

The printed expiry date tells you when a medicine legally stops being sellable. It does not tell you your actual deadline, which is your distributor's return-acceptance window — commonly some months before expiry, after which the pack becomes your loss rather than theirs. That window is set by commercial terms with each distributor and varies by company, so there is no single number to quote; check your own purchase terms.

There is one statutory boundary worth knowing alongside the commercial one: under Section 34 of the CGST Act, 2017 (as amended by the Finance Act 2022), a credit note issued for a sales return — including an expired-stock return to a distributor — must be declared in the GST return by 30 November following the end of the financial year in which the original sale happened, or the date of filing the annual return, whichever is earlier. That is the outer limit on when a return can still be tax-adjusted; your distributor's own commercial window will usually close well before it.

Because the deadline that matters isn't a single date, a useful expiry view has to work in bands rather than one alert: stock 90 days from expiry is still returnable almost everywhere and worth acting on now; at 60 days the paperwork needs to already be moving; by 30 days most distributor terms have closed and it becomes a pricing or placement decision rather than a return; past expiry it comes off the shelf entirely — selling it is prohibited, and Section 27 of the Drugs and Cosmetics Act, 1940 makes stocking or selling a drug that is adulterated or spurious in a way likely to cause harm a serious offence, with contraventions of the Act's other provisions (including sale of expired stock) carrying imprisonment and a fine in their own right. See our expiry returns glossary entry for the mechanics of raising a claim.

The stock register: what the law actually asks for, in one format

Underneath all of this is a paper (or digital) obligation: Rule 65(7) of the Drugs and Cosmetics Rules requires pharmacy records to be preserved for not less than two years from the last entry, and Rule 65(3)(h) sets a longer bar for Schedule H1 drugs — sale must be recorded in a separate register at the time of supply, giving the prescriber's name and address, the patient's name, the drug name and the quantity supplied, kept for three years and open to inspection. For Schedule X drugs, Rule 65(9)(a) also requires the prescription itself to be retained. None of these clocks run from when you set up software — they run from the date of the entry itself, which is why a register you can search and export beats one you're hoping never gets asked for.

In practice this means a compliant stock register needs, at minimum: medicine name, batch number, expiry date, manufacturer, quantity in and out, purchase and sale dates, and — for H1 items — the prescriber and patient detail on a register the software keeps separately rather than folded into ordinary stock movement. Building that column-by-column by hand is exactly the kind of thing worth not doing manually, and it's also where a lot of registers quietly go wrong — a column left blank because nobody had the batch number to hand at the time. We publish a free, ready-to-use pharmacy stock register format with the right columns already laid out, useful whether or not you end up using software for the rest of it.

How Nesayo handles pharmacy inventory

• Batch-wise by default, not as an upgrade. Every receipt — typed, imported from a CSV or Excel export, or read from a photographed purchase invoice — is stored as its own batch with its own expiry, quantity and distributor, drawn from a catalogue of 2,54,034 medicines so most items resolve without hand-typing manufacturer, pack size or HSN.
• FEFO at the counter, automatically. The soonest-expiring sellable batch is selected when a medicine goes on a bill — on the till, in chat, and by voice — so nobody is choosing from a dropdown under pressure.
• Expired stock is refused, not warned about. Nesayo refuses to bill a batch once its expiry month has passed, on any surface. This follows directly from Section 27 of the Drugs and Cosmetics Act, so it isn't a setting you can turn off.
• Schedule H1 sales are logged automatically at billing, separately from ordinary stock movement: date, medicine, batch, quantity and bill number, with the patient and prescriber names entered on the bill. Nesayo does not record the prescriber's address yet, so the pharmacist adds it to complete the Rule 65(3)(h) register.
• Reorder signals only appear where the evidence supports them. Nesayo does not show a "low stock" badge from a bare unit count. A days-of-cover figure is computed only once there is enough real sales history behind a medicine to size it — consistent with the trap described above, we would rather show nothing than show a confident-looking number with no data behind it.
• Checked on a schedule, not only on request. The Expiry Guard agent re-reads every batch every six hours and surfaces what has entered a returnable window.

Billing, batch tracking, FEFO, expiry blocking and Schedule H1 sale logging are part of the free tier — they're compliance, not an upsell, and the free plan has no card requirement and no time limit. The AI agents — Expiry Guard, Refill Radar, Payment Advisor, Stock Sense and Morning Briefing — come with the Full plan at ₹549/month as of October 2026 (the ₹249/month Essential plan adds voice billing, prescription scanning and Refill Radar, not the full five-agent suite); new pharmacies get the Full plan free for their first 1 month, with no card; after that, the Free plan is manual billing and manual stock, with no AI features.