Stock figures that cannot be trusted
System stock, physical stock and the ledger disagree, and the difference is written off rather than explained.
Retail & Distribution
Retail and distribution
Retailers, wholesalers and distributors where margin is thin and stock is the balance sheet.
Who this is written for: Managing directors, operations managers, finance managers and owners of multi-branch or multi-product businesses.
How this sector actually operates
In retail and distribution the stock is the business. Gross margin is usually thin enough that a few percentage points of shrinkage, pricing error or dead stock decides whether the year is profitable. The accounting challenge is not recording sales — the point of sale does that — it is knowing whether the stock figure is true, whether the margin by product and branch is what management believes, and where the leakage is happening.
The problems we address in this sector
These are the issues that recur. They are described as sector problems, not as claims about clients we have worked with.
Margin unknown by product and branch
Total revenue is clear; margin by SKU, category or outlet is not, so decisions are made on revenue rather than profit.
Shrinkage treated as inevitable
Loss is accepted as a cost of trading rather than investigated, which hides both process failures and theft.
Supplier rebates and credits untracked
Volume rebates, returns credits and settlement discounts agreed but never reconciled to what is actually received.
Dead and slow-moving stock
Capital tied in stock that will never sell at full price, invisible until the write-down.
Branch performance obscured
Allocated costs applied arbitrarily, so no branch can be compared fairly with another.
Cash and till discrepancies
Till reconciliation done weekly or monthly rather than daily, so the cause is untraceable by the time it is found.
The work that follows
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Stock integrity programme
A structured approach to stock accuracy: cycle counting, count procedures, variance investigation, and correction of the underlying process rather than a periodic write-off.
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Margin reporting by product and branch
Gross and contribution margin analysed by SKU, category, customer and outlet, with the cost basis documented so the numbers can be defended.
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Cost and pricing review
Landed cost accuracy, supplier price changes, and pricing that reflects real cost including freight, duty and handling.
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Supplier account reconciliation
Reconciling supplier statements, tracking rebates and credits, and recovering what is owed.
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Slow-moving and obsolete stock analysis
Identifying stock at risk, quantifying the exposure and recommending action before it becomes a write-down.
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Branch and channel profitability
A consistent allocation basis for shared costs so branch comparison is fair, and reporting that supports opening, closing and investment decisions.
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Cash and till controls
Daily reconciliation routines, exception reporting and the controls that make discrepancies traceable.
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Systems configuration
Configuring the platform for multi-branch stock, valuation method, barcode operations, purchasing approvals and the reporting described above.
The reporting pack we would build
Reporting is where sector knowledge shows. A generic management pack tells every business the same thing; a useful one reflects how your sector makes money and where it loses it.
- Gross margin by product, category, branch and channel
- Stock holding by value, with ageing and slow-moving analysis
- Stock variance and shrinkage by location
- Supplier rebates and credits accrued against received
- Daily sales and till reconciliation exceptions
- Branch contribution after allocated costs
- Cash-flow forecast reflecting supplier payment terms
Platforms and services for this sector
Platforms commonly used in this sector
Services we apply here
ERP & Accounting Software Implementation
Most businesses do not fail with software because they bought the wrong product. They fail because nobody designed how the business would run inside i…
Service detailAccounting & Bookkeeping
Bookkeeping is not data entry. Done properly it is the discipline that turns daily transactions into numbers a managing director can rely on. We run t…
Service detailBusiness Process Improvement
Software only automates the process you give it. If the process is unclear, undocumented and dependent on individuals, the system simply records the c…
Service detailFinancial Advisory & Risk Management
Advisory work is useful when a decision has to be made and the numbers behind it are not clear. We analyse the position, model the options, quantify t…
Service detailStatutory and technical considerations
Stock valuation method must be applied consistently and disclosed appropriately, and duty, levy and VAT treatment on imported goods needs to be handled correctly in landed cost. Getting landed cost wrong understates cost and overstates margin, which then distorts pricing decisions.
We do not publish rates, thresholds or deadlines on this website, because a figure that is out of date is more damaging than no figure at all. Where specific figures matter, they are given in an engagement against the position in force at that date.
Questions we are asked in this sector
How long does it take to fix stock accuracy?
The count itself is quick; the process changes behind it take a few cycles to stick. Goods-received discipline, inter-branch transfer recording and price control are usually where the variance comes from, and those take longer than the counting.
Do you already work with retail & distribution businesses?
This page describes the operating problems and reporting needs we understand in this sector, and the work that follows from them. It is not a claim about named clients. If you want references in your sector, ask us directly and we will tell you honestly what we can provide.
Do we need an ERP, or is accounting software enough?
It depends on whether your reporting relies on operational data — stock, jobs, production, projects, grants. If it does, accounting software will leave you assembling that data by hand every month, and an ERP is usually the cheaper option over three years. Use the solution finder for a preliminary view, then let us assess it properly.
Can you work with the system we already use?
Usually, yes. We review the configuration and the processes around it first, because many problems described as software problems are configuration or process problems. Where a rebuild is genuinely needed we will say so.
How long before we see a difference?
Some things are quick — a daily reconciliation routine, a proper aged receivables report, an approval framework. Others take a full cycle or two, particularly where data has to be corrected first. We set expectations in the scope rather than promising a timeline we cannot control.
What do you need from us to start?
A named person who can make decisions, access to the records and the systems, and time from the people who do the work. Implementation and process work fail on availability more often than on anything else.
Let’s build a stronger financial foundation for your business.
Tell us what you are dealing with. We will tell you honestly whether we can help, what it would involve and what it would cost.