Accountant for Windsor retailers

Inventory counts and shrinkage

For a retailer, the closing inventory is the most important number on the balance sheet, because it decides cost of goods sold and therefore profit. The book figure from the point-of-sale system says what should be on the shelves. The count says what is. The gap is shrinkage: theft, damage, receiving errors and items rung through at the wrong price. A shop that never counts cannot tell whether its margin problem is pricing or shrinkage, and those have very different fixes. We help set a count routine, full at year-end and cycle counts of high-value lines through the year, and adjust the books to the count so the reported margin is real. The year-end inventory count sets out a method that works in a small store.

Point-of-sale records that tie to the bank

The till records every sale; the bank records what actually arrived. Between them sit card processor batches that settle a day or two later, net of fees, cash deposits, gift cards sold and redeemed, refunds, and online orders through a separate platform. Each day’s sales should reconcile to the deposits that belong to it, with processor fees recorded as an expense rather than lost in a lower deposit. Gift cards are a liability until redeemed. We import the point-of-sale summary into the ledger each day or week and reconcile it to the bank monthly, so a missing deposit or a cash shortage shows up within weeks. Why bank reconciliation matters explains the discipline.

HST at the till

Ontario’s 13% HST is a single tax, which keeps the till simpler than in provinces with a separate sales tax. It still has to be right for each product. Some items a retailer might carry, such as basic groceries, are zero-rated, and a few supplies are exempt, so the point-of-sale system has to know which tax code belongs to each item. A wrong code charges customers tax they should not pay, or leaves the store owing tax it never collected. On the purchase side, HST paid on stock, rent, fixtures and supplies is recovered through input tax credits. We review the tax set-up in the till when we take on a store. Input tax credits covers what can be claimed.

Competing with the shops across the river

Windsor shoppers can cross to Michigan for an afternoon, and many do. A Windsor retailer rarely wins on price alone, so the numbers have to show where the store does make money: which categories carry their margin, which lines move, and what service or selection brings people back. Monthly books with margin by category make those decisions possible. Stores that accept US cash at the till face one more step: it has to be recorded at a set exchange rate at the till and deposited or converted without the difference disappearing. Pricing and margin analysis goes further on the commercial side.

The exchange rate itself moves the competition. When the Canadian dollar is strong, the trip across the river looks better to shoppers; when it is weak, American visitors come the other way. A retailer who watches sales by month against the rate can plan stock and staffing around it instead of reacting to it. That only works if the books close each month on time, which is what a regular month-end close is for.

Buying stock from US suppliers

Plenty of Windsor retailers buy from American wholesalers and brands. The landed cost of that stock is more than the invoice: exchange, freight, customs brokerage and any duty all belong in the cost of the inventory. The HST paid at the border is recovered as an input tax credit rather than added to cost. Recording only the supplier invoice understates the true cost of goods and overstates margin. We set up landed-cost entries so each shipment is costed properly, and track US-dollar payables so foreign exchange gains and losses are recorded as they happen.

Part-time staff and the holiday rush

Retail payroll is mostly part-time and swings with the season, with extra hours in November and December and quieter weeks in the new year. Each pay needs the correct deductions, vacation pay under Ontario’s employment standards, and statutory holiday pay calculated from actual earnings. Records of employment follow when seasonal staff leave. Employer Health Tax applies once annual Ontario payroll passes the exemption. Payroll services in Windsor covers the full cycle, and vacation pay rules explains the accruals.

Leases, fit-outs and the year-end date

Most stores lease their space, and the fit-out, shelving, lighting, flooring and signage, is capital rather than expense. Leasehold improvements are deducted through capital cost allowance over the lease, and fixtures and point-of-sale hardware in their own classes. The choice of year-end matters too. A year-end right after the holiday season means counting stock when it is lowest and the staff are free, and it puts the busiest months on one side of the line. We discuss the date when you incorporate or change accountants. Monthly bookkeeping starts at $300 a month with HST filing included; see the pricing page and the Windsor bookkeeping page.

Remote retail accounting from Abbotsford

EverStone is a sole practitioner CPA firm in Abbotsford, working with Windsor retailers entirely online. There is no Windsor office and no local staff. Meetings are held by video or phone, documents come in through a secure upload link and are signed by e-signature, and no visit is required at any point. Point-of-sale and merchant feeds arrive electronically, so the revenue figure is settled continuously rather than at year end.