There’s a lot to think about when running a retail business. Good accounting software can make life easier, helping you manage jobs like inventory, staff payroll and taxes. Here’s how it could work for you.
Retail is about record keeping
There are many different types of retail operations, from eCommerce and mail order to direct retail, pop-up shops, catalogues and more. As a small business owner you might use more than one type, depending on the products you’re selling.
But as any retailer knows, success involves more than just exchanging goods for money. You need to understand product merchandising, advertising and marketing, stock control, customer service, market research, supplier negotiation and more.
Retail can be seasonal too, with peaks in the run-up to Christmas and the back-to-school periods. The best retailers think carefully about how – and when – their products fit into consumers’ lifestyles. They use that knowledge to market their products.
And then there’s the accounts. Cashflow, payroll, taxes, ledgers and so on, all have to be tracked carefully. With money coming in and going out all the time, you won’t want to let anything slip through the cracks.
All of this means that you can’t run a successful retail business without keeping detailed records. And that’s where good quality accounting software can help.
How Xero can help your business
Xero is online or cloud-based accounting software that automates many manual processes. Xero streamlines inventory management and point of sale and makes doing business a pleasure. Everything just works – seamlessly and securely. And since Xero was born and built in the cloud, it can grow as your business grows. That means more success, with less headaches – and that’s got to be good for business.
12 top tips for successful retail accounting
Using your retail accounting software regularly, as part of your daily business operations, will help you get the best out of it. Here are some practical tips:
- Keep a record of every transaction
Every sale, every purchase, every staff payment, every tax bill. Record them all, to build up a clear picture of your business.
- Check and reconcile
Check all transactions regularly (ideally once a day) and make sure the numbers add up. Either do this yourself or have a bookkeeper do it for you.
- Review the difference between money coming in and money going out
Because that difference is your profit or loss. Keep a close eye on this to see how your business is performing on a day-to-day basis.
- Collect all required tax information
And make backups. Check local laws for the information you’re required to hold for tax and payroll purposes. Make sure it’s stored securely.
- Ensure ledgers are properly defined
Set up the right ledgers in your accounting software – ask an accountant to help here if necessary.
- Keep ledgers updated
Move your receipts from sales and purchases into your ledger. Do this every day if possible, or at least three times a week. You won’t want to fall behind, especially if business is booming.
- Get an outside perspective
Have your financial advisor or accountant review your ledger once a week or once a month. It’s important to identify discrepancies or a shortage of cashflow as soon as possible.
- Get regular reports
Leverage your accounting software’s powerful features. The best retail accounting software can generate useful reports to help you understand how your business is running.
- Keep a paper trail
It’s important to keep paperwork such as receipts and invoices, along with payment notifications for inventory or payroll.
- Keep business separate from personal
Have separate bank accounts for business and personal finances. Consider setting up separate bank accounts for expenses and incoming revenue too. That may seem like extra hassle, but it could make it easier to notice discrepancies.
- Remember to file tax returns
Keep on top of government deadlines for tax returns, employee tax returns and all other necessary reporting. See government websites for key dates.
- Watch your cashflow
Set up processes and controls to check your cashflow on a frequent basis. Share this information with a trusted advisor, such as your accountant. Don’t let a cash shortage take you by surprise.
Keep up with these trends
The retail business space is changing fast, partly due to cloud-connected smartphones and tablets. Your customers now expect more from their retail experience, and are willing to shop around in order to get it.
So if you’re going to keep up with customer demand, you’ll need to keep up to date. Here are some of the trends that are likely to affect retail businesses in the near future:
- Mobile web and app presence
People are buying using their mobile devices. That means less screen space for your web presence, so make sure your website has a mobile version – and perhaps an app too.
- Apps for the retailer
In some countries there are mobile POS apps available that can connect to your accounting software. In the US Square is probably the most popular of these apps.
- Customers shopping with GPS
People are looking for shops and businesses in your area. Make sure your shop is listed on the main geo-location websites and apps.
- Self-checkout becoming more common
It’s already popular with supermarkets because it lowers staff costs. That’s likely to spread to smaller retail businesses over time.
- No more clerk behind the counter
Checkout staff will be able to walk around the store and let customers buy on the spot, thanks to mobile POS tools.
- Price comparisons mean savvy customers
If you don’t keep your pricing competitive, you’ll lose out. Customer pricing knowledge is increasing fast thanks to comparison apps and websites.
- Pop-up shops will spread
Food carts and ‘Christmas shops’ were just the start. The short-term pop-up shop concept is likely to spread to other retail areas, especially in shopping malls.
- Technology is an enabler for the consumer
They can read reviews, watch videos, find recommendations from their friends, and much more. Make sure you go where they go.
Don’t get left behind
It’s not just consumers who are benefiting from technology. Retailers are too – at least the smart ones. With the right software you can not only track your inventory and costs, but also plug into hundreds of other add-ons and apps to manage specific parts of your business.
Technology is also enabling retailers to manage their bottom line better. With all the numbers at your fingertips, good accounting software can draw up reports and presentations that will help you see exactly how your business is performing.
So don’t get left behind. The right retail accounting software will help you keep your finger on the pulse of your business and meet your customers’ ever-changing needs.
Please contact us if you like to know further.