7 Accounting Tips for Retailers this Christmas

7 Accounting Tips for Retailers this Christmas

Christmas is everywhere even if it’s not December just yet. Deloitte released its 2018 Deloitte holiday retail survey with positive expectations. It’s annual holiday economic forecast projects total retail sales will increase 5–5.6 percent, with online sales likely rising 17–22 percent during the 2018 holiday season.

I read an article recently that said more than 6.8 million bottles, champagne and Prosecco were sold at Aldi stores during December – that’s more than 200,000 bottles per day – along with more than four million mince pies and more than 100 million packs of vegetables.

Think about that – that’s just one grocery store. Aldi broke the £10 billion sales barrier in it’s UK and Ireland stores last year.

Smaller retailers are also seeing the Christmas splurge and in this article, I wanted to talk about accounting tips to keep your shop ship shape and have a successful retail period.

1. Be aware of loss of stock

While sales increase during this period, so too can theft and loss of stock. This will affect your sales as well as your costs so consider investing in loss prevention solutions. Can you increase the security in your shop? Would you consider more mirrors or cameras?

A simple initiative could be to have someone saying hello and goodbye at the door, perhaps locate a paper wrapping service near the door. If people think they are being watched more in your shop than another, then they may not risk pilfering.

Make sure that your till or POS (point of sale system) allows you to set permissions to either enable or restrict staff. While I’m not saying to mistrust your staff, however, if new staff come on board, it’s advisable to be cautious until trust is established.

2. Decide how to deal with returns

I’ve been into some retailers and noticed that they are extending their returns and exchanges from the normal 30 days to 60 days. This may affect your cash flow and also impact your financials in January. It’s important to decide what your policy is with returns – will you extend it, will you offer a cash refund, will you offer store credit, will they need a receipt? Be clear on your policy especially if you’re changing it from your normal procedures. Make sure all your staff know the changes so there is no conflict at the tills.

3. Offer Exceptional Customer Service

This leads to the next point. While not exactly an accounting tip, I would suggest that you offer amazing customer service. This is your massive differentiator to the online shops – personal service. Be available to answer questions and offer suggestions. Have your best sales people selling and answering queries and your fastest people on the tills. This is goodwill that you won’t see on a balance sheet or a P&L but it will lead to increased sales. People talk when you’ve been on the receiving end of great – and bad – service.

4. Be on top of your administration

I know this can be the last thing on your mind after a busy, tiring day of being on your feet and being nice to customers. But spending the extra 20 minutes at the end of the day on your administration, your future self after Christmas will thank you! Keep your receipts in a certain place, bag up cash and place in a safe if you didn’t get time to go to the bank.

Another thing that I would ensure is that you have enough shop supplies. Simple things like till paper, bags, pens, gift wrap if you’re doing it, hangers. Little things can trip up a business and add a bit of stress to your day.

5. Decide gift card procedure

Gift cards are phenomenally popular during Christmas. Decide if you’re going to offer them and then see how you’ll treat them in the accounts. But beware – the cash benefit comes up front but you could still be meeting the cost even in six months time so gift cards need to be properly accounted for

6. Keep an eye on your stock

Stock is how you make your sales so make sure you have enough. If you have enough time, can you talk with your suppliers and see if you can get a discount if you bulk buy? What about ensuring a term in the contract that there is a sale and buy back, if stock isn’t sold?
Look back at your accounts and records from last year. What sold well, what sold well in relation to Christmas? That information would be most helpful this year.

Every morning and evening, do a stock level check and refill to make sure you have the day’s stock needs covered. A complete stock take might not be wise during this busy time but think about undertaking a partial inventory count. It may identify a discrepancy in stock so best be aware of it than waiting until January.

Decide on your sales margin – if you have too much stock and you’d like to have it all gone by Christmas eve, how much of a discount can you offer?

7. Assess your staffing

This is the time of year where all hands are on deck. Hopefully you’ll need more staff in so your schedules or rosters will be changed. You’ll also have to be aware of additional payroll costs.

It’s important to get it right so get onto an accountant, like TaxPlus Accountants, to make sure its alright. PAYE Modernisation is coming in on 1st January 2019 so you want to compliant from the get go.

Similarly, if you’re hiring people for the Christmas season, their rights and entitlements will have to be adhered to.

The Bottom Line

Christmas is a great time for retailers. Talk to your accountant before the real mad rush to see how you can maximise your stock levels, stock discussions with suppliers, cash in hand and payroll obligations. A one hour chat can make the difference when you return after Christmas or when doing your return in January.

Talk to TaxPlus Accountants about anything in this article.

T: 041-9844525/21
E: info@taxplusaccountants.ie

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