Accounting for Fashion Industries is all about finances, budgets, and taxes. It is a huge and rapidly growing industry with constant changes in perception and preferences. Fashion and Apparel are also synonymous with brands, and all uniqueness of fashion industries demand customized and specialized forms of fashion accounting.
The fashion and apparel industry is huge and generates more than $600 billion in annual revenue and employs more than 400 million people in the USA. Covid pandemic changed this industry and necessitated managing and saving every dime by instituting strict accounting and financial management to avoid monetary distress in the future.
At IMC, we appreciate the current scenario and can help all existing and startup fashion and apparel businesses put firm control over cash, inventory, models, and sales promotions, ensuring adequate cash flows and plugging all weak links in your existing accounting system.
The major challenges of accounting for fashion industries are due to the very nature of the business, and the more pressing ones are
- The complex nature of logistics and long supply chains can suffocate you with overstocking and shortage of cash at hand. You need to track and religiously account for all stocks lying in the supply chain for accurate cash flow projections.
- Varied and Seasonal demands also create issues with revenue, cash flow, and budget forecasts, including repurchase decisions.
- The international presence of fashion industries involves different business rules and regulations across different countries, making regulatory compliance issues.
- Both online and offline presence in the fashion and apparel industries need an integrated system to manage customer data and demand and supply forecasts.
- Product promotions and discounts need a minute and careful accounting to ensure that they are not making debts in profits.
- Tax compliance can be a serious problem unless handled wisely and effectively due to many locations and many levels.
- High overheads, cash flow, and debts require close control of bookkeeping and accounting activities and detail financial statements at regular intervals. Monitoring of manufacturing costs, overheads, and wastes also pose accounting challenges. Managing depreciation can be vital at times.
- Inadequate online software support needing more investments for the increased digital presence and virtual accounting.
Fashion industry software is ERP software that are industry-specific and effectively manage the fashion business. Fashion business software should have inbuilt features that can measure, monitor, analyze, control, and report all business processes and without complexities. Most of the available software is cloud-based online software that can be handled from anywhere through smartphones.
The available features in ERP software for fashion industries usually include
- Finance and Accounting
- Order Management
- Production Management
- Customer Management
- Inventory Management
- Order Fulfillment
- Warehouse Management
However, based on industry types and the nature of businesses, there could be many cost-effective solutions. SMEs and startups engaged in retail business may conveniently go for QuickBooks or Zoho and integrate with other compatible software for best results. Experienced and software savvy accountants at IMC will assist you in selecting the right software for your business.
IMC has been working with fashion industries for quite some time and acquired the necessary experience and expertise in all the business processes and value streams. In addition to satisfactorily resolving all accounting challenges faced by the fashion and apparel industries, we also assure you to provide complete and visible business solutions in the following areas
- An optimum level of inventory ensuring avoidance of sales and profitability issues and freeing up of business capital
- Continuous monitoring and lower cost of overheads
- Preparing and Analyzing balance sheets periodically and settling all issues with debtors and creditors
- Monitoring business processes through value stream mapping and advising you on wastages and prevention
- Forecasting market demands, nature of accounting for fashion business, and future growth and suggesting on possible M&A