Retail profit lives in the stock room and the payment gateway, not the bank balance. Whether you run a shop in Brisbane, sell through Shopify and Amazon, or both, the numbers that matter are gross margin after fees, stock turn and GST that is right on every channel. We work with retailers and online sellers across south-east Queensland and Australia-wide, and this page covers what we do for them.
A retail business can show a profit in the accounts and have no cash, or show a loss and be fine, and the difference is almost always stock.
02Online sales arrive in the bank as something quite different from what the customer paid.
03GST for a retailer who imports stock or sells across borders is where we see the most expensive mistakes.
04Most retailers now sell through several channels: a physical shop, their own website, one or two marketplaces, perhaps wholesale to other stores.
A retail business can show a profit in the accounts and have no cash, or show a loss and be fine, and the difference is almost always stock. Every dollar sitting on a shelf or in a third-party warehouse was paid for before it sold. If the books record purchases as an expense when the invoice arrives, the profit and loss swings with buying cycles and says nothing about margin. If stock is counted and valued properly, cost of goods sold matches the sales it generated and the gross margin is real.
We set retail and ecommerce clients up with inventory tracking that fits the size of the business: Xero's own inventory for simple ranges, a dedicated inventory app connected to Xero for businesses with many SKUs, several channels or a warehouse. Then we make the stocktake routine stick, because an inventory system that is never counted against is just a confident guess.
Gross margin by product line and by channel is the report that decides what a retailer buys next. We build it so the owner sees it monthly, not at year end.
Online sales arrive in the bank as something quite different from what the customer paid. Shopify Payments, PayPal, Afterpay, Stripe and Amazon each deposit a net amount after their fees, often batched across several days, sometimes net of refunds and chargebacks. Marketplace commissions, advertising charges and fulfilment storage come out before the payout. If the bookkeeping records the deposit as sales, revenue is understated, fees are missing and the GST is wrong.
The right set-up posts gross sales, refunds, fees and GST separately into clearing accounts, then matches the net payouts against the bank. There are good integration tools for Shopify, WooCommerce, Amazon, eBay and the other marketplaces, and the choice depends on volume and how many channels you sell through. As a Xero Platinum Partner we set this up, test it against a month of real payouts and then keep it reconciled.
Returns need the same care. A return reverses revenue and GST and puts stock back on the shelf, or writes it off if it cannot be resold. A store with a generous returns policy needs those numbers visible, because a high return rate on one product line can turn a healthy margin into a loss.
GST for a retailer who imports stock or sells across borders is where we see the most expensive mistakes. Goods imported into Australia above the customs threshold attract GST at the border, usually paid through your customs broker, and that GST is claimable on the BAS if you are registered and hold the right documentation. Goods below the low value threshold may instead have had GST charged by the overseas seller or platform at the point of sale.
If you are the seller shipping to Australian consumers from offshore stock, or selling through an electronic distribution platform, the low value goods rules can make you or the platform responsible for the GST. Selling from Australia to overseas customers is usually a GST-free export, provided the goods leave the country within the required time and the paperwork proves it. Each outcome depends on who is the importer, where the goods are when they are sold and what the platform has agreed to do.
We review the supply chain and the platform terms, work out who accounts for the GST at each step, and set the item and customer coding in Xero to match. The deferred GST scheme can also help importers with cash flow by moving import GST from the border to the BAS, and we assess whether it suits the business.
Most retailers now sell through several channels: a physical shop, their own website, one or two marketplaces, perhaps wholesale to other stores. Each channel has a different margin after fees and freight, and the mix shifts constantly. If the accounts lump everything into one sales line, the owner cannot tell whether the marketplace is profitable after commissions and advertising, or whether the shop is carrying the website.
We structure the chart of accounts so sales, cost of sales, fees and freight can be reported by channel, and we review the mix with the owner. Often the answer surprises them: the channel with the most revenue is not the one making the money.
The ATO publishes small business benchmarks for many retail categories, from clothing and footwear to hardware, pharmacies and online sellers. They show the expected range of cost of sales and total expenses as a percentage of turnover. Sitting outside the benchmark does not mean something is wrong, but it does mean the ATO is more likely to ask. We compare your figures to the current benchmarks every year and document any legitimate reasons for the difference.
Retail cash flow runs in reverse to most service businesses: pay for stock first, sell it over weeks or months, then repeat with next season's order while the last one is still selling. Christmas stock is ordered in winter. The BAS arrives in the quarter after the big sales, when the cash has already gone into the next order. Owners who forecast that cycle buy better and borrow less.
We build rolling cash flow forecasts around the buying calendar, the sales seasonality and the tax dates, and we help owners choose the right way to fund stock when retained profit is not enough: trade finance, inventory finance, a working capital facility, supplier terms, or the payout advances the platforms offer, which are convenient and often expensive. A clean forecast and current management accounts make every option cheaper.
For stores that have outgrown a monthly bank check, our virtual CFO service adds monthly reporting by channel and product line, stock turn and sell-through analysis, and a forward view before the next big order is placed.
A lot of online stores begin as a sole trader with a Shopify account and a spare room. That is fine until the business is holding serious stock, employing people, or making enough profit that the owner's marginal tax rate is doing the damage. A company caps the tax rate on retained profit, separates the owner's assets from the business's liabilities and makes it possible to bring in a partner or sell shares. A trust above or beside the company can add flexibility for a family.
Moving from sole trader to company is not just registering a new entity. Stock, the brand, the website, the domain and the platform accounts all need to be transferred properly, and there are rollovers in Australian tax law that can allow this without triggering capital gains tax if the conditions are met. We plan it so the transition is clean and the trading history is preserved for a future buyer or lender.
Selling into other countries adds registration questions. Many countries require overseas sellers to register for their equivalent of GST once sales pass a local threshold, and marketplaces often collect it on your behalf. Fulfilment from a warehouse in another country can create a taxable presence there. We help owners understand the obligations before the first container ships, and work with advisers in the relevant country where needed.
Retail and ecommerce businesses are bought and sold on their numbers, and the numbers that matter are gross margin, stock turn, customer acquisition cost and how much of the revenue repeats. A store with clean, channel-level financials and a documented inventory system is worth more than one with the same sales and a shoebox of marketplace statements. We keep the books in a shape a buyer can read.
Whether you are buying a store, merging with a complementary brand or preparing your own exit, we value the business, run the due diligence and model what the deal does to cash. Our Victoria Point and Jimboomba offices work with retailers from Brisbane and Logan through to the Scenic Rim, and with online sellers anywhere in Australia by video.
“Lauren has been absolutely fantastic in guiding us through the set-up of our Pty Ltd business.”
Yes, if you want to know your real margin. Recording stock purchases as an expense when the bill arrives makes profit swing with buying cycles and hides what each product actually earns. Tracked inventory means cost of goods sold matches the sales it produced. Xero's built-in inventory suits small ranges; stores with many SKUs, several channels or a warehouse usually need a dedicated inventory app connected to Xero.
Usually yes. Goods imported above the customs threshold attract GST at the border, which your customs broker generally pays on your behalf, and a GST-registered business can claim that back on its BAS with the right import documentation. The deferred GST scheme lets eligible importers account for it on the BAS instead of paying at the border, which helps cash flow. Low value imports are treated differently and may have had GST charged at sale.
Usually when one of three things happens: the profit is large enough that your personal marginal tax rate is costing you, the business holds enough stock or employs enough people that personal liability is a real risk, or you want to bring in a partner or investor. The move needs to transfer stock, brand, domain and platform accounts properly, and rollovers can prevent a capital gains tax bill if done correctly.
The payout that lands in your bank is net of Shopify fees, refunds and sometimes chargebacks, so it should never be recorded as a sale. The right method posts gross sales, GST, refunds and fees to a clearing account, usually through an integration app, and then matches the net payout against the bank. Done properly the clearing account returns to zero each cycle and any difference points to a missing fee or refund.
Generally no. Goods exported from Australia are GST-free if they leave the country within the required period and you keep evidence of export. Some countries then require you to register for their own GST, VAT or sales tax once your sales there pass a local threshold, and marketplaces often collect it for you. Services and digital products sold to overseas customers have their own rules. We review each market before you start selling there.
The ATO publishes annual small business benchmarks for dozens of retail categories, including clothing, footwear, hardware, pharmacies, furniture, computer retailing and online sellers. They show the typical range for cost of sales and total expenses as a percentage of turnover, drawn from lodged returns. A business outside the range is more likely to be asked questions. We compare your figures to the current benchmarks each year and document any genuine reasons you differ.
