Everything you Need to Know about Retail Accountancy
Last Updated October 4, 2021
Do you dream about opening your own retail store? Retail stores these days are attracting much attention from entrepreneurs with a passion to offer quality products and services. But most importantly, they want to become the “trending brand”. Even to run a retail store business one does need to understand the basics of retail accountancy.
A retail business can cover anything – from apparel to food supplies to home decor and even auto. There’s a lot of ground to cover. It offers windows of opportunities for entrepreneurs to make a name for their brand in the competitive market. With the right financial stability, it is possible to do so.
This article is the guide for the interested parties looking to learn basic guidelines that involve starting a retail business and looking for retail bookkeeping.
Table of Contents
What is Retail Business?
A retail business is involved in buying and selling goods and services. The business holder buys products from the wholesalers and manufactures, and sells them to consumers.
However, due to pandemics, things have changed phenomenally. Retail businesses are shifting towards eCommerce. With smart planning, you can start a traditional retail business without much worry.
6 Steps to Starting your Dream Retail Business
Having a catchy concept for your store is great! But without sufficient funds soon it will become overwhelming. Depending on the budget you plan to invest, also be aware of the most basic expenses that will incur.
To sell a product you need a physical location. The location should be strategic in terms of foot traffic and building regular customers. Such a kind of space comes with a price tag.
So when finalizing the situation, you need to keep the cost of the deposit and the remaining funds to remodel the space as per your need.
Are you keen on buying the space or renting it? Retail stores are often rented despite the space size. Take a look at Walmart or Target Stores. Those retail businesses are huge and widespread therefore affordability to buy space is not a major concern.
But since you are a small businessman currently, renting is the preferred option for you. Store rent is based on the square footage of the space and the real estate value too. Places with high foot traffic will cost you more. So make a wise decision.
Did you consider the cost of monthly utilities? The cost of electricity and gas, space, etc, are important to consider according to your budget.
An average retail store spends at least $1.21/sq ft on electricity. Also, remember that the weather and climatic conditions of the surrounding rented location will have a significant impact on the electricity costs.
If you hire a retail bookkeeper right away, they will guide you about the retail business insurance right away. The most common items included in retail insurance are business property, income, liabilities, crime insurance, and so on.
Once your retail business is insured you also have a better chance of handling the financial aspects of the business.
Merchandise and Equipment
To start your business, you need to buy goods too. The initial cost a.k.a the holding cost is crucial. Get the required funds for the holding cost of inventory. Once you have paid for the inventories, and storage space, you can do a forecast of the monthly inventory on the basis of the most sold items.
Buying and selling of goods are recorded in the ledgers. So it’s best to hire bookkeeping services to do the job. Also, you need to think about the cost of equipment you need to install and use (like hangers, etc) to display the products.
Retail business maybe is one man’s show but still, you need employees to run the daily chores. Think about the wagers, salaries, and other compensable or non-monetary benefits. To do the payrolls you need to follow an accurate system.
It is best recommended to take the help of payroll services to ensure they can manage the details accurately. And do not forget to keep the cost of outsourcing the payroll services either.
Retail Accountancy: 5 Basic Guidelines you need to Learn About
Let’s talk about the least interesting topic – Accounting and bookkeeping! Like every other business, a retail store will also be in need of a professional financial expert. Regardless of the size of your business, retail stores may also suffer accounting challenges.
Retail accountancy covers a broad range of financial aspects. Keep the following retail bookkeeping factors in mind that will help your store business grow.
Use of Accounting Software
One of the most convenient tools to maintain all necessary information is the accounting software. A trending accounting privilege for the small retail store business where the owner himself (if he wants to) or the outsourced bookkeeper can manage the accounting and bookkeeping tasks.
Such client portals are a handy tool to manage the day-to-day inventory too. Small businesses can benefit from affordable pricing plans that meet the available budget.
Bookkeeping and Records
In retail accountancy, one needs to use the upgraded technological tools but also needs to manage the records outside of the software. To better track the inventory management, expenses, and revenue, it is vital to keep track of the receipts, manage the sales records, loan statements, and proper bank information.
Surely accounting and bookkeeping software cover all the aspects, but in case your internet is down hard copies will benefit you. Besides, there is secluded information that software cannot always cover. So the sales associates and managers need to learn how to document them.
Like a professional retailer, you need to come up with an adequate inventory method that is a perfect fit for your retail store.
Accounting and bookkeeping tasks will rely on the value of inventory, a classified asset. Sales data is part of the information that will help accountants calculate the losses and profits. You can either opt for physical inventory counts or cycle counting (an ongoing system to count inventory or every aisle).
So on your go, the outsourced retail accountant will follow the instructions for inventory accounting.
Retail Accountancy Expertise
We have been mentioning outsourcing the accountants. But why? Accounts and bookkeeping management is crucial even for a small retail store business.
For instance, My Count Solutions offers its bookkeeping services to small businesses of all types so that they do not have to stress about their financial reports and information. Outsourcing for retail accountancy helps to meet your accounting needs. Such professionals take on full responsibilities and have the expertise and knowledge about the industry.
They also take care of your tax filings.
In retail accountancy, taxes are another matter that needs to be taken care of. At the end of every year, the retail business owner has to file their taxes. What will happen if any document is missing?
Outsourcing retail bookkeeping means the professional experts will not only manage the financial statements and record-keeping but also act as tax preparers for their clients too. To avoid any IRS audits, these experts will make sure all documents are attached and tax forms are filled appropriately with clear IRS-provided guidelines.
Every Retail Store Needs My Count Solutions
Researchers find that small retail store businesses make up almost 98% of all retail businesses. If you want to break into the vibrant but competitive industry, you need professional financial help.
My Count Solutions helps its clients to maintain their financial stability and guide them from their initial business days. To help you process through the initial business days to tax seasons, financial help is just one click away.