How Accountants Can Help Retailers Grow Their Business

Trust us when we say we know what a tough job it is to be a retailer: managing huge inventories with different products in multiple varieties, keeping track of ever-changing consumer preferences, and coping with constantly changing prices while keeping peers at bay with competitive pricing strategies. It’s a job that has you on your toes all day long. At the end of a tiring day, all you probably want to do is get some rest and prepare to face yet another day. But doing the same thing day in and day out will not help you evolve and grow into something bigger. It would be best if you had significant number crunching, data analysis and strategizing for that. A great place to start is accounts. Retailers’ accounting can be tricky. To begin with, specialized knowledge of how the retail industry works and its problems is needed to find innovative and cost-effective solutions to these problems. Only an accountant well-versed in retail can provide the expertise required to take your business to the next level.

What Problems Do Retailers Face?

Unlike service-based professions or other industries, the retail business has unique problems due to its sheer volume and variety of products. The primary pressure points are:

1. Managing physical inventories and correctly valuing them.
2. Dealing with seasonal changes in consumer demand and coming up with sales and promotional strategies accordingly.
3. Understanding and navigating complex sales tax regulations.
4. Handling various payment methods such as cash, card payments, mobile payments, and digital payments.
5. Understanding and dealing with location-specific dynamics in the case of multiple stores in different cities or towns.

But how can an accountant help ease these business concerns?

The Role of An Accountant in Retailers’ Business Growth

Contrary to popular belief, the skillset of an accountant extends way beyond ledgers and spreadsheets.

Managing Inventories

As mentioned above, retail businesses deal with physical products that need ample storage space and careful management. Correctly tracking all products, valuing them, making sure you are neither overstocked nor understocked, and storing them as per manufacturer and industry specifications are tasks that require patience, keen observation, and memory.

Apart from accounting for all products in your inventory, a competent accountant can also provide technological tools and management systems that can do all this and more. It can program the software to track your inventory and automatically replenish it whenever necessary. Various inventory valuation methods such as “first-in, first-out” or “last-in, first-out” can also be implemented to streamline your inventory and avoid wastage. Moreover, an accountant can also help you identify sales patterns and use historical data to forecast future sales trends. With access to your business numbers, he/she can suggest ways to optimize your financial resources, thereby reducing expenses and boosting savings.

Cash Flow Management

Disturbances in cash flow can derail their day-to-day operations, which depend heavily on it. Thus, it’s important to devise ways of maintaining a healthy, undisrupted cash flow while keeping in mind the specific needs of your retail business. By studying and interpreting your business data, an accountant can design a budget and cash flow roadmap to ensure adequate liquidity for your retail store.

Also, as with inventories, technology can automate and manage vendor payments, employee salaries, invoicing, and banking tasks, ensuring you never miss a payment and save up on late payment penalties and interest. Deftly managing such financial tasks can go a long way in filling any gaps in your finances and saving up for growth opportunities that come your way.

Funding growth with reserves can help you save on interest on business loans.        

Retailers’ Specialization

An accountant specializing in the retail industry is adept at understanding its requirements, such as revenue recognition, calculating cost of goods sold (COGS), product pricing, and retail-specific accounting regulations. Based on this, they cannot only compile more insightful financial reports but also assist you in improving profitability, reducing risks, and grabbing growth opportunities by making data-backed business decisions.

Sales Tax Compliance

The sales tax regulations for the retail industry are quite complicated. Moreover, they are dynamic and also change from region to region. If you plan to grow your business, it would be prudent to consult an accountant and understand the sales tax and other taxation requirements of the jurisdiction you are expanding. Overlooking such regulations can lead to heavy penalties and affect your goodwill and brand image.

Optimizing Opportunities

The dynamics of the retail world are constantly changing. To keep up and stay ahead of your competitors, you must continually keep innovating, upgrading and evolving your business strategies and product mix. An experienced accountant can support you by compiling goal-oriented financial reports and plans to help you make financially sound decisions regarding growth opportunities.

Financial resources are limited. By analyzing the expected returns on different opportunities, an accountant can help you generate better returns.   

The retail industry can present many opportunities for growth and expansion – if you are alert and innovative enough. By hiring a competent and reliable accountant with in-depth knowledge of retailing, you can channel your efforts toward identifying and grabbing these opportunities and giving your retail business a chance to flourish.

Contact KSSP Partners LLP in Markham to Help Retailers’ Grow Your Business

Talk to a professional accountant to help you track your inventory, manage costs, recognize revenue, and help plan your growth. At KSSP Partners LLP, our accountants and bookkeepers can provide services such as setting up inventory and payroll systems and managing sales tax. To learn more about how KSSP Partners LLP can provide you with the best accounting and bookkeeping expertise,  contact us online or by telephone at 289-554-5997.