Industry Specific Bookkeeping Tips: Retail!

Retail stores make up a VAST number of new businesses! You have products you are passionate about! Keep in mind these few key bookkeeping tips designed specifically for retail establishments to make the most of your business!

• Inventory Management: Keep detailed records of goods received, track movement, and manage stock levels to understand costs and prevent losses. *This can be done inside Quickbooks Online! Or you may find another software that works for you!

• Track your Cost of Goods Sold (COGS): Accurately calculate COGS to understand the profitability of your products. *These are expenses DIRECTLY related to your business operations (such as buying several different products to make a bundle/gift basket - the individual products would be under COGS and the basket itself is your product)

• Sales & Revenue Tracking: Record every sale, return, and discount to monitor revenue and customer behavior. 

• Expense Tracking: Monitor all expenses, including fixed costs (rent, salaries) and variable costs (shipping, utilities). 

• Separate Business & Personal Finances: Maintain a clear separation to ensure accurate reporting and simplify tax season. 

• Bank Reconciliation: Regularly compare your business's financial records with bank statements to catch discrepancies. 

• Payroll Management: Keep precise records for payroll to ensure timely and accurate payments, especially with varied staff (full-time, part-time, seasonal). 

• Sales Tax Compliance: Collect and remit sales taxes correctly to avoid issues with tax authorities. 

Financial Reporting & Analysis

• Profit Margins: Analyze your profit margins and perform break-even analysis to understand how many units you need to sell to cover costs. 

• Cash Flow: Track cash inflows and outflows to manage working capital and recognize patterns. 

• Accounting Reports: Regularly review financial statements like the balance sheet, income statement, and cash flow statement to gain insights into your business's financial health. 

Tools & Methods

• Accounting Software: Use accounting software to automate tasks like invoicing, report updates, and financial record-keeping. 

• Double-Entry Accounting: This method provides a comprehensive view of your business's financial situation, including assets, liabilities, equity, income, and expenses. Basically, each transaction touches two of your accounts (you take from one account, and add to another)