Bookkeeping and reporting for Lexington retailers, built around gross margin by category, honest shrink tracking, and inventory that ties to the balance sheet.
In retail, inventory is usually the biggest number on the balance sheet and the least reliable one. It is also where profit hides. If the value on your books does not match what is on the shelf, then your gross margin is wrong, your cash planning is wrong, and the P&L only tells the truth after a physical count.
As the owner of a multi-location retail business, Justin understands firsthand the cash flow, inventory, margin, purchasing, staffing, and seasonality challenges that inventory-based businesses face. Baum's Accounting Services has also worked with retail operators across 18 years in controller and CFO roles where the inventory number had to hold up. For shops around Lexington, Georgetown, Winchester, and Richmond, we set up inventory accounting that ties to the general ledger, track landed cost so freight rides with the goods, and record shrink when it is found rather than at year end. Then reporting shows margin by category, which is what tells you where to put your open-to-buy dollars.
The rule is simple and often ignored: cost of goods sold moves when the item sells, not when you pay the vendor. Everything else follows from that. Landed cost has to include freight and any duty, or your margin looks better than it is on imported goods. Vendor discounts and rebates reduce cost. Damaged and stolen goods get written off in the period discovered, and if that number climbs, you have a loss prevention problem worth naming. We reconcile the inventory subledger to the general ledger monthly, so the balance sheet number is defensible and your gross margin stops jumping around for reasons nobody can explain.
A single store-wide gross margin percentage hides more than it shows. The high-turn staple at 22 points and the slow specialty item at 55 points average out to a number that describes nothing. We build reporting by category and by department, with turns alongside margin, because a 60 percent margin on something that sells twice a year contributes less than a 25 percent margin on something that moves weekly. Add markdown tracking and you can see how much of the promotional calendar is actually buying traffic versus giving away margin you did not need to give.
Every register day has to reconcile: gross sales, tax collected, discounts, returns, tender types, and the deposit that hits the bank two days later. Card processor fees get netted out before the money arrives, so the deposit never matches the sales total. Multiply that by a month of days and small variances add up into a number you cannot explain. We handle the point of sale to bank reconciliation, keep sales tax liability separate from revenue, and file the returns on schedule. If you sell online too, nexus tracking across states comes with it. Sales tax compliance is in scope. Income tax returns go to an outside CPA.
Retail cash flow runs backward. You buy in the summer for the holiday season, pay vendors on terms that come due before the goods sell, and hope your read on demand was right. A rolling forecast built off your buying calendar and your seasonal pattern shows the pinch weeks before they arrive. We build that forecast, set a budget against it, and review variance monthly so an overbuy in one category gets caught before it becomes markdown inventory in March. At the controller and CFO level, that includes open-to-buy planning and a hard look at which vendor terms are worth negotiating.
It is common and it is fixable. A large annual adjustment means shrink, receiving errors, and pricing mistakes accumulated all year with nothing catching them. Cycle counting by category through the year, reconciled monthly, turns one painful number into small corrections you can actually investigate while the trail is warm.
Most point of sale systems export daily sales, tax, and tender detail in a form that reconciles cleanly to QuickBooks Online, QuickBooks Desktop, Xero, Sage, or NetSuite. Bring the details of your setup to the consultation. What matters is that the export is reliable and the mapping is consistent, not which brand you run.
Yes, including payroll tax filings. Retail payroll usually means hourly staff, variable schedules, seasonal hires, and sometimes commission or spiffs. We run it through ADP, Paychex, Paycor, Gusto, RUN Powered by ADP, or QuickBooks Payroll, and report labor cost as a percentage of sales so you can staff against actual traffic.
Other work in this area that tends to come up in the same conversation.
Food cost, labor cost, and prime cost tracked weekly rather than monthly, since a month is far too long to miss a margin problem.
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Read moreBook a consultation. Bring whatever you have, even if it is a mess, and we will tell you straight what it needs.
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