If you manage a small retail store, you probably know that it’s critical to keep good records. However, between cash flow, inventory, payroll, and your other records, it may be hard to keep track of your operations. This is especially true if you are managing them on your own.
However you do your accounting, you want to make sure that it’s giving you good insight into the cost of your operations, helping you prepare for tax season, and providing resources to plan for future success. How can you do this? These four tips will help you make the most of your next accounting session, clarify if you’re making or losing money, and highlight opportunities to enhance your business.
Accounting Tips for Retail Stores
1. Keep Track of Your Cash Flow
Whether you use QuickBooks or another software solution, you know that keeping track of cash flow is critical for keeping your retail store in the black. With money flowing in and out of your business through multiple channels, it’s sometimes hard to tell at a glance if your business is profitable. Make sure you have a handle on your accounts receivable, as well as your accounts payable. It’s also a good idea to keep some cash in reserve so your business has time to recover if you experience a shortfall.
2. Manage Your inventory
If you have cash flowing in, chances are, there are probably retail products flowing out. It’s important to keep a steady supply of your products available, but it can be difficult to predict how fast your product will sell, and how popular it will be. A good retail inventory system will help you avoid empty shelves or overstocking. When setting up your system, make sure to account for products that take longer to restock or have historically been backordered to avoid losing money while you wait for more units to arrive.
3. Plan for Seasonal Fluctuations
If your retail store is in a seasonal location or sells a seasonal product, you’re used to a rollercoaster sales cycle. You also know that staying one step ahead of the game is especially crucial for the limited time you have.
To stay competitive, make sure you’re staying up to speed on trends in your industry, especially as you begin stocking for the season ahead. Planning for the end of your season is critical as well. Establish a streamlined system for end-of-season discounts so you have a way to move excess inventory quickly. You may also wish to implement stricter return policies than year-round stores to avoid getting stuck with a glut of returns at the end of your sales cycle.
4. Consider Hiring an Accountant
You may have handled the accounting yourself when you first started your business, but as your business becomes more established, outsourcing your accounting can help you maximize profits and increase your efficiency.
Smaller retail companies often begin by hiring an annual accounting service to assist with annual tax preparation. However, if you are a more established company or are interested in planning for success further down the road, you may wish to consider hiring a monthly accounting firm. Monthly accounting firms provide the ongoing advice, monthly financial statements, and audit representation you need to keep your business running as smoothly and profitably as possible.
Wondering if it’s the right time to outsource your accounting? Set up a consultation with CSI Accounting & Payroll today and see how we can help grow your business. We’ll support the financial side of your business. In turn, you’ll be able to focus on your product, your team, and your customers. Don’t wait until your retail needs become too complex to manage – schedule a consultation today and start planning for your future success.