What is Merchandise Accounting?

Effective store accounting is the foundation of successful retail store management. Without a clear understanding of what goods are in stock, their movement and inventory status, a business risks losing control of operational processes.

Merchandise accounting is a system for recording all inventory transactions, from receipt from suppliers to sale to the end consumer. It is the basis for controlling balances, analyzing sales and making strategic decisions.

Key principles of successful accounting:

1. Process Automation. Modern software minimizes manual data entry errors.
2. Regular inventory. It allows you to keep data up to date and identify possible discrepancies.
3. Transparency of operations. All actions with goods should be recorded: receiving, moving, selling, writing off.
4. Data analysis. Accounting is not only control, but also a tool for obtaining analytics, which helps to make strategic decisions.

Why is Store Accounting Important for Retailers?

1. Control of finances. Without accounting, it is difficult to understand where funds are being spent and how efficiently they are working.
2. Avoiding shortages and surpluses. Lack of merchandise can lead to loss of customers and excess can lead to a capital freeze.
3. Theft prevention. Accounting in a store helps identify discrepancies between actual balances and data in the system.
4. Increased competitiveness. Stores that actively use accounting systems react faster to market changes and better meet the needs of customers.

How to Keep Records in the Store: Step by Step

1. Receipt of goods

At this stage, it is necessary to carefully check the compliance of the received goods with the order. To begin with, compare the data on the delivery note with the actual quantity and quality of products. Make sure that all items correspond to the order in terms of characteristics, quantity and expiration date, if it is important. All the data obtained should be entered into the accounting system, indicating the name, quantity and cost of each item. If you find discrepancies, be sure to document them and notify the supplier to resolve the situation.

2. Receipt of goods

After goods are received and inspected, they must be recorded in the accounting system. This process involves entering detailed information about the goods: name, characteristics (e.g., color, size, brand), quantity and cost. The accuracy and completeness of this data will determine the continued effectiveness of inventory control.

3. Placement of goods

For the convenience of further work, products should be properly arranged in the warehouse or in the sales area. It is important to group them by categories to quickly find the necessary products. Use labeling with barcodes or QR codes, and also create a diagram of the warehouse, which will provide logic and orderliness in the arrangement of goods.

4. Tracking the movement of goods

Tracking the movement of goods is a key accounting step. This should be done by taking inventory on a regular basis and recording any changes in balances. The main methods that can be used are FIFO (goods received first are sold first), LIFO (last-in-first-out goods are sold last-in-first-out) or weighted average cost, which takes into account the average price of all purchased lots.

5. Sales and data updates

The sale of each item must be recorded in the accounting system in a timely manner. This allows you to automatically update inventory data and analyze which items are in highest demand. This approach provides transparency in processes and helps to plan for future purchases.

6. Write-offs and re-accounting

Sometimes goods need to be written off due to spoilage, expiration or other reasons. Regular inventory counting helps to identify items that need to be written off in time and avoid wastage. All such transactions should be documented to maintain transparency and accurate accounting.

Each of these steps is important to create a reliable accounting system that will help you effectively manage your store's inventory.

How to Measure KPIs of a Retail Business Using Accounting Programs

Key Performance Indicators (KPIs) are the main tool for assessing the performance of a store or an entire retail chain. Thanks to modern retail accounting software, you can automate the process of monitoring such indicators and get accurate data in real time.

Among the main KPIs that help determine the state of the business:

• Average receipt - an indicator that reflects the average amount spent by one customer per store visit.
• Merchandise turnover - the speed at which inventory turns into sales.
• Stock level - controlling the availability of merchandise to avoid shortages or overstocks.
• Returns rate - an indicator of assortment quality and service levels.

Analytics platforms, particularlyBusiness Intelligence(BI), allow you to not only track these metrics, but also identify patterns and potential problems.

Datawiz BI Retail Accounting Automation Software

For quality retail accounting, it is advisable to implement modern software solutions that can cover all key aspects of business management. Using Datawiz BI tool allows you not only to automate processes, but also to receive relevant analytics in real time.

Modern retail programs help:

• Control product balances. You will always know which items need replenishment and which are accumulating in excess.
• Track sales and financial performance. This allows you to quickly assess the performance of a store or the entire chain.
• Automate inventory. This makes the inventory process more accurate and less time-consuming.
• Analyze key performance indicators (KPIs). Tracking average receipt, inventory turnover or return rate allows you to better understand business results and make informed decisions.

Business intelligence systems, provide deeper analysis of data. They allow you to identify high margin products, track sales trends and respond to changes in demand in a timely manner. 

Such tools are an integral part of modern retail, because they not only optimize work, but also help to reach a new level of efficiency.

Accounting for goods in the store is the basis for building a transparent and efficient business. By following a step-by-step plan and implementing proven tools, you will be able to make your store not only easy to manage, but also as cost-effective as possible