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A Retail Finance Expert’s Guide to Bookkeeping – Retail For The People

A Retail Finance Expert’s Guide to Bookkeeping

A Retail Finance Expert’s Guide to Bookkeeping

The last few months have been difficult to navigate for the retail industry. To clarify some of the questions surrounding bookkeping for retailers, we’ve asked Los Angeles-based retail finance expert, Maricel Dela Cruz for insights.  Maricel is an operations and finance management consultant. Her services include bookkeeping and accounting for retail businesses large and small. 


RFTP: Maricel, can you start off by giving us a little history behind how you ended up in this lane of the retail business? Were you working full-time for another employer before going out on your own? Can you talk a little about why you decided to take the leap into starting your own business?

MARICEL: After graduating from college I worked at Tiffany and Co. in San Francisco assisting in operations and one of the tasks was helping with the store’s payables. There, I gained valuable experience understanding the store’s expenses and how it was managed from an individual store perspective. When I moved to LA, I ended up in the finance department at Joie and received valuable insight into how the company’s operating expenses were managed from a whole company perspective. From there, I then started managing the operations of a startup e-commerce retailer. At a startup, there is no specific job. Everyone has to do everything haha. I also ended up managing the books. Guided the startup to $1M in revenue in its first full year, and training staff over the course of 3 years, and then I decided to venture off on my own. Initially, a handful of people began asking me to help them with their bookkeeping and before I knew it, I was steadily scaling my clientele through a stream of referrals, all of which I am exceedingly grateful for. In the end, it’s all about nourishing relationships.

I love to empower business owners with the knowledge and provide advantageous insight into their numbers. It’s very common I encounter clients that might just feel overwhelmed with the process and it’s up to me to help them feel comfortable in reading what can be confusing numbers. To me, it’s like a puzzle. One of the main objectives is to determine pathways to be cost and tax-efficient.

RFTP: Generally there is some confusion between bookkeeping for businesses and accounting. Can you explain what the fundamental differences are between the two terms? Is it advantageous for small retailers to have professionals handling this part of the business for them?

MARICEL: The difference between a bookkeeper and an accountant is that a bookkeeper mainly deals with the organization of a company’s historical transactions. The accountant looks at those transactions, helps to prepare the financial statements for tax filing, and often is more updated with the tax laws as required, especially if the accountant is a CPA. I am not a CPA, but I work with a network of CPA’s and often some of my clients have a CPA that they’ve been working with for some time now. It is absolutely advantageous for businesses to have professionals handling this part of the business as most small business owners don’t have the time to focus on what the tax laws are. Consequently, this can be detrimental, so bookkeepers and accountants are crucial in helping save the company thousands of dollars especially when it comes time to filing company tax returns.

RFTP: What are the biggest mistakes that you see retailers making in trying to handle their bookkeeping practices themselves? How costly can these mistakes be? What misunderstandings do you find owners having regarding their bookkeeping?

MARICEL: The biggest mistake I see business owners make in trying to handle their own bookkeeping is the misclassification of company transactions. It can be the difference between having to pay thousands of dollars in tax or not. Often, business owners try to do the bookkeeping on their own, but eventually, it just creates much more of a mess that the bookkeeper/accountant has to clean up. This becomes another costly expense.

RFTP: What are the most important metrics that a retail store owner should be keeping up with on a daily or weekly basis?

MARICEL: Cashflow, cashflow, cashflow. What money is coming in? What money is going out? Project what it will look like in the next 6-9 months. You can use one of the Retail for the People’s Cash Flow Projection spreadsheet (request access here) or software programs to help you with this.

RFTP: What are the top platforms that you are seeing being used in the retail industry currently? [Quickbooks, Xero, Waves, Shopify, etc.]

MARICEL: Currently, I believe the best platform to help small business retailers is Shopify. Learn to use it’s professional reports and gain insight for your business. On the financial side, the most popular is Quickbooks Online and Netsuite, depending on the size of your business.

RFTP: Some owners have a fear of the numbers. Keeping track of the numbers and their real-time store metrics brings them anxiety and quickly falls to the wayside. Can you talk some about the differences you see between businesses that do stay on top of their financials and ones that do not?

MARICEL: Those who keep on top of their sales tax filings, business filings, tax return filings, can save thousands of dollars versus those who file late and get charged with interest and penalties for late filings. You must plan for these numbers in your cash flow.

RFTP: For the owners out there that are behind on their finances, are things salvageable? At what point do you recommend they turn things around and start keeping better track of their numbers and staying organized? Where do you advise they start? What is the first step they can take to get things back on track?

MARICEL: Everyone’s case is unique. Make sure your books are reconciled at the least, on a monthly basis. Run a P&L (Profit & Loss) and Balance Sheet and see where you can improve on the income and expense side. Be consistent and disciplined and you can eventually get to where you want to be.

RFTP: Lots of retailers we have worked with, especially the ones looking to do pop-up shops, are interested in hiring their workers as 1099 contractors. However, with the changes in California contractor laws last year, how do these changes affect the bottom line for brands looking to take advantage of creating a higher margin by hiring a contractor versus a W2 employee.

MARICEL: Yes, the payroll expenses increase, but I think it’s an opportunity to get creative on how you hire, train, and retain the workers. The best retail workers want to work for a brand they believe in and their passion for the brand can reflect in the sales volume or higher-margin products.

RFTP: What can business owners, especially retail store owners, do as they grow and scale their business to stay cognizant of their numbers when there are so many other things to do? What recommendations or advice do you have for the Founder or Owner of the business who wants to stay vigilant, but has very little time?

MARICEL: There are so many things that a business owner has to be cognizant of that you really have to have a great team of people to help you manage the business. Teamwork makes the Dreamwork. Depending on what stage of the business you are in, you can usually contact your bookkeeping accounting in the beginning. As you grow, you definitely need someone internally to oversee the finances, but depending on the size of the business, you can also contract different parts of the finance department.

RFTP: What are the top three ways to make sure retailers are maximizing their deductions when it comes time to file taxes? How do you recommend they keep track of all their business expenses throughout the year? Are there any apps or platforms that you recommend to make this record-keeping easier?

MARICEL: For retailers, There are 3 ways to maximize their deductions: 1.) Make sure your transactions are categorized correctly 2.) Make sure you have the paperwork to back up those transactions for IRS purposes and 3.) Make sure your inventory is correctly accounted for during the year. To help keep track of your business expenses throughout the year, you can take snapshots of your receipts onto apps like Expensify or Quickbooks online. If you get your receipts emailed to you, have a folder in your email drive to store those receipts. 

RFTP: With COVID-19 and the government assistance that has been given to many small businesses, what implications will those have on next year’s tax roll? How will the PPP loan affect 2020’s taxable income and cash flow? How should retailers be tracking these funds?

MARICEL: If you have received PPP funds and expect to meet the PPP’s eligibility and loan forgiveness criteria you may elect to account for the proceeds as a grant on your income statement. For the most part, tax implications should be a wash as the funds will probably exit the account on the expense lines in the same year. If you don’t think you’ll be able to meet the loan forgiveness criteria, you must account for the proceeds as debt. Monitor developments as the SBA will continue to give guidance.


RFTP: Are there any other tips or insights you would like to share with our readers? 

MARICEL: Yes! The PPP program deadline has been extended to August 8, 2020. There have been various government assistance programs for small businesses and the self-employed. Some cities and states may have programs that provide grants to small businesses. Be sure to check all options out.

I wish you all strength and courage during these challenging times, but also recognize that there is plenty of opportunities.


Maricel Loyola Dela Cruz is an operations and finance management consultant. Her services include bookkeeping and accounting for businesses large and small she can be reached directly here.