As a retailer, you know that your success involves more than just exchanging products for money. You must be an expert in customer service, inventory control, marketing, advertising, and more. And then you have accounting.
Retail is unique in some ways. You have to stock a lot of different products to be successful, have money coming and going all the time, and you may experience seasonal highs and lows in traffic to your stores. This makes keeping track of every penny your business deals with important. Here are some tips to help you do that.
1. Track Cash Flow- With money flowing in and out of your business in multiple directions, it can be difficult to know if your retail business is profitable from the ground up. Tracking cash flow is critical to knowing where your business is going, and the right accounting software can help you manage it. Accounting software will help you keep track of accounts payable, accounts receivable, and whether your business is in the black, but you need to keep the books on a regular basis.
2. Manage Your Inventory- As a small retail store, you may be operating with limited resources. For this reason, you need to manage your inventory carefully. You probably can't afford to lose your products due to expiration, theft or damage, but keeping the right amount of inventory at all times is just as important to the profitability of your store. Empty shelves translate to lost sales, and overstocking means that potential cash flow is locked into inventory. This is another place where accounting can help. A good retail inventory system can track sales trends for you, make sure products are on the shelves when you need them, and make sure they aren't out for too long.
3. Prepare For Seasonal Fluctuations- This is especially true if your store is in a seasonal location or specializes in seasonal products, but it can also apply to retail businesses that specialize in gifts and see increased sales during the holiday season. It can be difficult to balance inventory and seasonal fluctuations, but you need to stay ahead of the game. Keep abreast of trends in your industry and plan accordingly to ensure that you have enough correct inventory at the start of your sales cycle. Also, plan for end-of-season discounts so you're not left with excess inventory when the cycle ends. You may also want to adjust your return policy so that you don't end up with a lot of returns at the end of the cycle.
4. Hire An Accountant- When you start your own retail business, being your own accountant might be a good way to start your own business. But if your business is growing, it might be time for a change. Bookkeeping and accounting outsourcing can help you increase your efficiency and increase profits. You can put your money in the hands of professionals with years of experience in the accounting field while you focus on what it needs most: your business. An easy way for small retail businesses to get started is annual tax preparation. Tax season can be stressful, and tax accounting tasks can take up most of your time if you do them yourself. But if you really want to know how outsourcing bookkeeping can help your business, consider monthly bookkeeping services that can provide you with financial statements, audit representation, and ongoing advice.
At Teqo Accounting, we help retail stores by providing reliable accounting services in Canada with meaningful financial analysis and proven business insights that help them grow. Learn more by contacting us today.
