Download PDF Download PDF

Accounting for Retailers

Establishing and running a retail shop is both demanding and challenging. Apart from the usual small business compliance issues of GST, BAS and PAYG you have to contend with extended trading hours, inflated rents and seasonal trade.

The landscape has changed for retailers and we are witnessing an explosion of on-line sales. The futurists are even predicting that bricks and mortar shops will be replaced by spaces that showcase products and that the goods will be delivered within 24 hours of ordering to your doorstep, possibly by drones.

Comparison shopping network Getprice surveyed 1800 Australian consumers and found that one in five of the consumers surveyed would shop less on overseas sites if the Australian dollar fell below US90 cents, while 16% would shop less on these sites if the dollar fell to less to US80 cents. More than half of the respondents identified broader product availability as a key factor for shopping on international sites while three out of five respondents prefer online retail over traditional retail shopping because of the prices, deals and discounts.

Online consumer expenditure is booming and 97% of Australian internet users have already shopped online. It's absolutely vital that you adapt to the changing market conditions and shift your marketing focus online.  Not only that, the days when a person would only tell five of their friends about a bad shopping experience are gone courtesy of social media. For example, the Melbourne retailer Gasp asked three  young ladies to leave their store and they tweeted and posted about their bad experience on Facebook. Their  comments went viral, the story was picked up by television, radio and the press around the world.

You probably also need to deal with various council permits and regulations not to mention your staff, occupational health and safety issues and superannuation. Your retail tenancy lease can be extremely complex and given occupancy costs are often the second highest expense after wages in a retail shop we can help you negotiate the terms of your retail lease and liaise with your solicitor. Whether you retail clothes, shoes, computers or liquor in your shop, having an accountant who understands your retail business can mean the difference between survival and success. Over the past 20 years, Paul Dobson and his team of accountants have mentored a number of retail shop owners through the various stages of their business life cycle from start up right through to sale. You can tap into that experience, technical knowledge and an intimate understanding of retail trade.

THINKING OF STARTING A RETAIL BUSINESS

Retailers are one of our specialist client groups and having mentored hundreds of clients through the start-up phase of their business we have built a reputation as as business start-up specialists.

If you are looking to start a retail shop or buy into an existing business, there are numerous issues to consider including your business structure, tax registrations, insurances, your choice of accounting software, your vehicle and finance. As accountants and business advisors we can assist you in all of these areas plus provide advice on HR matters, payroll and the preparation of a business plan, marketing plan and a cash flow budget. Over the past two decades our team of accountants have helped dozens of retailers get their business off to a flying start. We offer you experience, technical tax knowledge and most importantly, an intimate understanding of your industry.

Starting a business is a bit like building a house and you need solid foundations. In a business sense these include the right tax structure, accounting software, insurances and marketing. Your choice of business structure is critical and there are a number of different options including sole trader, partnership, company and trust. When it comes to selecting the most appropriate tax structure for your business we always recommend you ‘start with the end in mind because Australian tax laws are complex and changing your business structure at some point in the future can trigger a capital gains tax event that could prove costly. Whenever we provide advice on business structures we always take into account issues like:

• Minimisation of Income Tax
• Maximize Asset Protection
• Allow for the admission of New Business Partners or Investors
• Comply with all Legal Requirements in your Industry
• Risk Profile of Your Industry
• Consider Future entitlement to Discount Capital Gains Tax Concessions

As a consequence, we often find the business structure is a compromise based on the relative importance of each of these issues.

Another brick in your business foundations is your choice of accounting software. Up to date, accurate financial records let you to make informed business decisions and the wrong choice of software can be catastrophic. Poor record keeping is one of the biggest causes of business failure in this country and when deciding on the most appropriate software program to use you need to match your business needs with your level of accounting skill. Too often business owners produce ‘computerised shoebox’ records that cause frustration, waste time and create additional fees. This conflicts with our mission of helping you slash the time and cost associated with bookkeeping and compliance.

Here at SBG Accountants, we want to be your accountant and business advisor, not an expensive bookkeeper. You’ll find we support a range of different software options but we do have a preference for cloud based solutions like Xero because of their flexibility and the fact that you can access your financial data via the internet and invite your accountant or bookkeeper to view your accounts at the same time. This means you can get bookkeeping support and valuable advice in real-time. Log in online anytime, anywhere on your Mac, PC, tablet or smart phone to get a real-time view of your cash flow. Your data is automatically backed up and users have access to the latest version of your financial data plus you never need to worry about installing software or program updates.

To build a house you also need the right tools and when 'constructing' your business we have developed a number of tools including a start-up expense checklist broken down into various categories including: 

-  equipment
-  professional advice and software
-  information technology costs
-  marketing and signage
-  vehicle costs

This checklist will help you identify all your potential establishment costs and these figures then filter through to our cash flow budget template and allow us to produce a projected profit and loss statement for your first year of trading. These reports can also tuck neatly into our business plan template that is designed to help you secure funding from external sources like a bank. Another useful tool is our business start up checklist that walks you through key business registrations you might require, insurance options, legal issues, branding items and domain name registrations for your website.

For a retailer your vehicle is arguably your most important business tool. To learn more about the alternative methods of claiming your vehicle expenses and the distinction between a business and private trip, you can download our Motor Vehicle Tax Guide from the resources section of our website  In addition, through our affiliate partners we can also assist with vehicle finance (chattel mortgage, CHP or lease) and get you fleet pricing on your new car, ute or light commercial van that could save you thousands of dollars

Through another affiliate partner we can also help you source funds to finance your business purchase, equipment or franchise fee (if applicable). Pricing is absolutely vital to the success of your business and we can help you do some price modelling plus we use benchmarks to compare your business performance against your peers so you know what is working in your business and what needs working on.

If you're contemplating starting a business you don't need to reinvent the wheel as we have all the tools and resources to help you get off to a flying start. We can do some financial modelling based on different price points to produce profit forecasts and when you're up and running we can use industry benchmarks to compare your business performance against your peers.

MARKETING YOUR BUSINESS

For small business owners, your marketing can be the difference between gloom and boom.

Most retailers rely on their reputation and referrals to grow their business. While these ingredients remain important, you need to shift your marketing focus online. Increasingly local searches like ‘Hairdresser West Melbourne’ are driving traffic to your website which is often the first touch point with a potential new customer. As you know, in business, you only get one chance to make a good first impression and your website is your 'online shopfront' and silent sales person working 24/7 to promote your business.

One of our biggest points of difference compared to other accounting firms is our marketing expertise. We can assist you with your branding (business name, logo and slogan), your corporate brochure and help you harness the power of social media to win more referrals. Over the past few years we have worked with dozens of clients to help them create affordable, quality lead generation websites that are responsive to smart phones and tablets. We can provide advice and guidance with your website content including video production and if your website lacks calls to action or lead magnets we'll help you build them. In addition, we'll introduce you to strategies like re-marketing and search engine optimization to drive more traffic to your website.

If you aren’t using some of these marketing techniques your business probably won't reach its full profit potential.

The marketing process begins with your branding and we have worked through the process with dozens of clients over the years and using some online resources we can help you build a modern brand that resonates with your target market. We can even help you develop your stationery at a fraction of the cost of engaging a graphic artist or marketing consultant.

We can help you understand the Four Ways to Grow A Business plus identify the key profit drivers in your business. We can walk you through a number of profit improvement strategies and even quantify the profit improvement potential in your business. Our role is to make sure you don't leave any profit on the table and if you're a retailer we offer you a range of accounting, taxation and business coaching services including:

• Start-Up Business Advice for Retailers
  
• Advice regarding the Purchase or Sale of your Business
• Tools including the Start-Up Expense Checklist and Templates for a Business Plan, Cash Flow Budget, Letterhead and Business Card
• Advice and Assistance with the Establishment of Your Business Structure
• Tax Registrations including ABN, TFN, GST, WorkCover etc.
• Preparation of Business Plans, Cash Flow Forecasts and Profit Projections
• Accounting Software Selection and Training – Bookkeeping, Invoicing, Quotes & Payroll
• Preparation and Analysis of Financial Statements
• Preparation of Finance Applications
• Bookkeeping and Payroll Services
• Income Tax Returns and Tax Planning Strategies
• Wealth Creation Strategies and Financial Planning Services
• Industry Benchmarking and KPI Management
• Vehicle & Equipment Finance (Chattel Mortgage & Lease)
• Monitoring and Controlling Labour and Sub-Contractor Costs
• Recession Survival Strategies
• Advice regarding Employee Relations and Workplace Laws
• Assistance with your Marketing including your Branding, Corporate Brochure and Website
• Advice & Assistance with Pricing your Services and Claiming Vehicle Expenses
• Business & Risk Insurances (Income Protection, Life Insurance etc.)
• Business Succession Planning

We are much more than just tax Accountants. We are business and profit builders who genuinely care about the success of your retail shop. Your  tax return and financials are the start of the client process for us not the end and we offer you strategies to grow your business, your profits and your wealth. If you’re looking to get your retail business off to a flying start or want to grow your existing business, contact us today.

To get to know more about us we invite you to book a FREE, one hour introductory consultation to discuss your business needs. You can expect practical business, tax, marketing and financial advice that could have a significant impact on your bottom line. To book a time, call us today on (03) 9629 6744 or complete your details in the box at the top of this page and let's get to work ON your business so it is more profitable, valuable and saleable.

SBG Accountants & Business Advisors - Taking Care of Business