Retail Shops
Markup isn't margin. Between inventory that doesn't sell, processing fees, and markdowns, your real profit is hiding in the details.
The Industry
Retail seems simple on the surface. You buy a product, mark it up, sell it to a customer. But the gap between what you charge and what you actually keep is where everything gets complicated. A boutique owner in Long Beach marks up 2.5x and assumes the business is doing well. After rent, payroll, credit card fees, insurance, markdowns on slow-moving stock, and the inventory that never sells at all, the actual net margin might be 5 to 8 percent in a good year.
The inventory is what separates retail from most other small businesses. You spend thousands of dollars on product before a single customer walks through the door. That money sits on shelves and in backstock until someone buys it. How you account for those purchases affects everything from your monthly profit numbers to your tax liability. Most small retail businesses get this part wrong, and the mistakes show up as unreliable financial reports and unexpected tax bills.
Who This Covers
Who This Covers
Boutiques, gift shops, specialty stores, convenience stores, and any brick-and-mortar retail business in Long Beach, the South Bay, or Greater LA that carries physical inventory and needs books that reflect what’s actually happening.
What Makes It Different
What Makes It Different
Physical inventory that ties up cash before you earn a dollar. Cost of goods sold that needs to match actual sales, not purchasing timing. Seasonal revenue swings. Daily POS transactions across cash, cards, and digital payments. California sales tax collection and remittance on top of all of it.
Inventory Is the Foundation
Many small retailers record inventory purchases as expenses the moment they pay the vendor. It feels intuitive. Money went out, so it must be an expense. But that approach distorts your profit and loss every single month. Stock up in September for the holiday season and your books show a terrible month even though you haven’t sold anything yet. Then December looks wildly profitable because all that revenue comes in without much new purchasing. Your monthly reports stop being useful for making decisions.
We track inventory properly in QuickBooks Online. Purchases go into an inventory asset account. Cost of goods sold gets recognized when items actually sell. This means your gross margin reflects reality each month. It also means your balance sheet shows what you have on hand, which becomes essential for physical counts, spotting shrinkage, and making smart purchasing decisions going forward.
Cost of Goods Sold
Cost of Goods Sold
Your profit and loss shows the actual cost of what you sold that month, not what you purchased. Gross margin becomes a number you can trust and use for pricing decisions, product evaluations, and vendor negotiations. No more guessing whether you’re making money on a product line.
Shrinkage and Inventory Counts
Shrinkage and Inventory Counts
When your records say you should have 40 units on the shelf but a physical count shows 32, that gap is real money. Regular inventory counts reconciled against your books reveal theft, damage, and recording errors before they quietly eat away at your profit over months.
Cash Flow and the Costs Nobody Adds Up
Cash flow in retail doesn’t follow a smooth pattern. You place vendor orders weeks or months before the product generates revenue. A gift shop buying holiday inventory in September might spend $15,000 that won’t come back until November or December. Meanwhile rent is due, employees need to be paid, and supplies still need purchasing. Without planning around these cycles, profitable businesses run into cash crunches at the worst possible time.
Then there are the costs that hide in plain sight. Credit card processing fees run 2 to 3 percent on every card transaction. If most of your customers pay by card, that adds up to thousands of dollars a year that never appears in the register totals. Returns and exchanges create adjustments that need recording. Discounts and markdowns change your realized margin. Each one is small on its own, but together they represent a real gap between what the register says you made and what you actually kept.
Seasonal Cash Planning
Seasonal Cash Planning
We help you see the cash cycle clearly. When the big vendor payments go out, when revenue typically picks up, and how much cushion you need to carry through the slower months without scrambling for cash or relying on a credit line you didn’t plan for.
Processing Fees and POS Reconciliation
Processing Fees and POS Reconciliation
Card transactions hit your bank account net of processing fees. We reconcile POS reports to bank deposits so every transaction is accounted for and the fees are tracked separately. You see what it actually costs to accept cards instead of letting those fees disappear into the numbers.
What Changes
You start seeing which product categories actually make money and which ones just take up shelf space. Gross margin by product line shows whether that new display of candles is pulling its weight or sitting for months before eventually getting marked down. Purchasing decisions become informed by real data instead of gut feeling about what might sell. You reorder confidently and stop tying up cash in inventory that doesn’t move.
Tax time becomes straightforward instead of stressful. California sales tax filings are based on clean, reconciled numbers. Year-end inventory valuations are documented. Cost of goods sold is accurate. Income and deductions are captured throughout the year so there’s nothing to reconstruct in March. You go into the new year knowing exactly what your business did and where the real opportunities are.
Product and Category Profitability
Product and Category Profitability
Margin analysis by product line or vendor shows what’s working. You identify slow-moving inventory earlier, price more accurately, and stock more of what sells at strong margins. Markdowns get tracked so you can see your realized margin, not just the sticker price margin you hoped for.
Tax-Ready Books All Year
Tax-Ready Books All Year
Sales tax, income tax, inventory valuations. Everything is documented and organized throughout the year. No scrambling to pull numbers together at filing time. Your CPA or tax preparer gets clean books without the usual back-and-forth that costs you time and money.
Long Beach's Trusted Bookkeeping Partner
The Next Step:
A Quick Discovery Call
Tell us where things stand with your books. We'll listen, ask a few questions, and give you a clear quote to get it handled.
