Riding Out The Constant Waves Of The Retail Economy With A Dedicated Accounting Service

Owning your own retail business has been the dream of many entrepreneurs and the foundation of the global economy for thousands of years. Retail is on the frontlines of economic action, continually riding the waves of a slowdown and resurgence. 

For all of this continuous movement, having a strong partnership with a dedicated accounting service can be the stabilizing move that anchors your retail business to ride out the constant waves of retail change.

Monitoring Cash Flow

Properly managing cash flow is the Achilles heel of retail businesses. A business may have exceptional customer service, a great location, and sought-after product, but cash flow problems can slowly drown a company that might otherwise survive. In fact, 82% of small businesses fail because of cash flow problems.

Cash flow problems are like having a slow leak in your bathroom. They arrive almost unnoticed, as you are busy with other responsibilities, but left unattended, they can easily overwhelm your entire life.

But, imagine the security and peace of mind that comes in knowing your cash flow is being diligently monitored while you stay focused on your business! A proactive accountant is an excellent insurance policy against cash flow problems.

Planning For The Unplanned Expenses

This is the pit-in-the-stomach that no retail shop owner ever wants to feel. Profits could be up, you might even have thousands of dollars in savings, but when the furnace goes out, the basement floods or the cost of goods increase by 3x, then what? 

Unplanned expenses don’t have to be the lurking boogeyman you continuously fear. With a big-picture accounting strategy that keeps tabs on your existing credit and monitors your long-term profitability, you can ride out the rough patches and accounts for temperamental furnaces and international tariffs.

Keeping Tabs On Payroll

Unless you want to eat, sleep, and live at your business, you are going to need some employees. Certainly, payroll isn’t unique to retailers, but along with your inventory and rental costs, payroll is probably your next largest expense. How you manage this cost may be the pivotal hinge upon which your profitability turns.

Payroll administration is more than just handing out checks on payday. There is an enormous amount of data that must be collected, rightly recorded, and organized to determine how someone should be paid, how taxes are withheld, and how reporting is handled. 

Chances are, you didn’t hang the “open” sign in front of your shop this morning so that you could dig into the minutiae of payroll administration. By outsourcing your payroll responsibilities to an accountant can ensure you stay focused on why you opened your shop in the first place.

Managing Inventory

The fuel in the tank of every retail business is inventory. Without a product to sell, you are left stranded on the side of the road.

But accurate inventory management goes beyond having enough merchandise on the shelves and in the warehouse, your accounting process should also be able to tell you the cost of goods sold, and the profitability of each product. Having the ability to pull up a report and know how inventory is affecting your bottom line should be a frequent practice.

By including inventory management in your accounting procedures, you can maximize your profits and improve your bottom line.

Staying Current on Sales Tax Changes

Nearly every state in the Union has some sort of sales tax, but certain items like food and clothing may be exempt in your state. With the growing impact of online business on sales tax revenues, many states are now passing laws that require out-of-state retailers to collect sales tax. 

If your retail strategy includes online sales, this is yet another reason to have a fully developed accounting strategy that accommodates the changing sales tax rates and requirements.

Riding Out The Economic Waves

For all of the fluctuation that retail ownership entails, anchoring yourself to the stabilizing security of good accounting practices can be the wisest move you make. Analyze your weak spots, develop a plan, and chart your course.