Retail Shops
Inventory is cash sitting on shelves. We track what you paid, what sold, and what your margins actually are by product and vendor.
The Business
For retail shops, inventory is the business. Every item on the shelf represents cash you’ve already spent waiting to become revenue. The gap between what you paid for that merchandise and what you sell it for is your entire margin. Without accurate tracking, you’re guessing at both. A boutique owner might know they sold $18,000 last month but have no idea whether they actually made money after accounting for the cost of goods, markdowns, and shrinkage.
Gift shops, specialty stores, and boutiques deal with hundreds or thousands of SKUs across multiple vendors. Some items move fast at full price. Others sit for months before getting marked down to clear the shelf. Knowing which products actually contribute to profit versus which ones just tie up cash and floor space requires tracking that most retail owners don’t have time to maintain while also running the shop floor.
Who This Covers
Who This Covers
Boutiques, gift shops, specialty stores, consignment shops. Local retail businesses in Scottsdale and Phoenix selling physical products where inventory management directly impacts whether you make money or just move merchandise.
The Complexity
The Complexity
Every sale involves multiple numbers. The register total. The credit card processing fee. The cost of the goods that left the building. The sales tax you collected. These need to flow correctly into your books so you know your actual margin, not just your gross sales number.
What We Handle
Inventory accounting means knowing what you have, what it cost, and what your margins actually are. We track purchases by vendor or product category so you can see which lines perform and which ones disappoint. Cost of goods sold gets calculated correctly based on actual inventory movement, not estimates or year-end guesses. When you look at your financials, you see real margins by product category rather than a blended number that hides problems.
Your POS system generates sales data. Your bank account shows deposits after card processing fees. Sales tax gets collected and needs filing. We reconcile these different sources so nothing falls through the cracks and the numbers actually match. Monthly reporting shows sales by category, margins by product line, and inventory turns so you understand where the money goes and which parts of your business deserve more attention.
Inventory Valuation and COGS
Inventory Valuation and COGS
Proper tracking of what you paid for merchandise and what actually sold. FIFO or weighted average valuation depending on your products and what makes sense for your business. Accurate cost of goods sold on your P&L showing real margins, not rough estimates.
Sales and Cash Reconciliation
Sales and Cash Reconciliation
POS reconciliation matching register reports to actual bank deposits. Credit card processing fees tracked as the expense they are. Sales tax collected and filed on time. Gift card liabilities handled correctly on the balance sheet until redeemed.
What Goes Wrong
Shrinkage happens in every retail business. Theft, damage, miscounts, vendor shorts. Most shops don’t discover the extent of it until the annual inventory count reveals a number that doesn’t match the books. By then it’s too late to figure out what happened or when it started. A $3,000 discrepancy could be one large theft, dozens of small ones, counting errors from receiving shipments wrong, or a combination. Without regular inventory reconciliation, you’re running blind on one of your largest assets.
The other problem is margin blindness. You know certain product lines sell well because the register rings. But do they actually make money after accounting for what you paid, the markdown you eventually took, and the shelf space they occupied for three months? Without cost tracking by category, popular products might be popular because you’re pricing them too low. Meanwhile, slow movers that should have been clearanced months ago are still tying up cash.
Inventory Count Surprises
Inventory Count Surprises
Physical counts that don’t match book inventory create serious problems at tax time. If your books show $50,000 in inventory but you count $38,000, something went wrong months ago. Without regular reconciliation throughout the year, you can’t identify whether it was theft, receiving errors, or accounting mistakes.
Invisible Margin Erosion
Invisible Margin Erosion
Items that sit too long eventually get marked down. Seasonal merchandise gets clearanced at cost or below. These markdowns affect your true margins but often get buried in aggregate numbers. You think you’re making 50% gross margin on a product category, but after markdowns and slow movers, the real number is closer to 30%.
What Changes
You start buying smarter. Data shows which vendors and product categories actually deliver margins versus which ones just tie up cash and floor space. Reorder decisions get based on real turn rates, not gut feeling or what sold well two years ago. You stop bringing in products that look good in the showroom but don’t move at full price. Markdown decisions happen earlier based on actual velocity instead of waiting until items are completely out of season.
Inventory becomes a managed asset instead of an unknown liability. Shrinkage gets caught quarterly while it’s still a small problem you can investigate. Tax preparation is straightforward because cost of goods sold and inventory valuation are already accurate when your accountant needs them. When it’s time to talk to the bank about a line of credit for a big seasonal buy, you have clean books that show a business under control.
Purchasing Confidence
Purchasing Confidence
You know which product lines deserve more shelf space and ordering budget. You know which ones need to go or shrink. Vendor relationships improve when you can review actual performance data during negotiations. Your buying becomes disciplined instead of reactive.
Financial Credibility
Financial Credibility
Banks and landlords see organized books that reflect a real understanding of your business. Tax returns are clean because inventory and COGS were tracked properly all year. You spend tax season reviewing numbers and planning, not scrambling to figure out what you have and what it’s worth.
Full-Service Bookkeeping for Greater Phoenix
The Next Step:
A Quick Conversation
Tell us about your situation. We'll listen, ask a few questions, and give you a clear price to handle the work.