Bookkeeping for High-End Apparel

Challenge

This high-end fashion apparel company was growing revenue, but had extreme difficulty in breaking even, primarily due to the lack of insight into their financials. Their historical finance team had been focused on compliance, and less so on reporting for management decision making. As they were experiencing growth, they were in a position causing them to outgrow their old finance team, and came to GrowthLab looking for someone to help take on their entire finance function. After diving in with their team, we noticed one of the culprits to understanding their numbers came from inventory management and the cash flow cycle around turning inventory.

Solution

We worked closely with the company's management team to get up to speed on their history and where they’re looking to go. We quickly began organizing Quickbooks to clean up old entries, improve detail, clean up the chart of accounts, and understand their inventory cycle. We set up meetings with their team to review the financials on a regular cadence - something we preach, rigor and cadence!

With close to 300 SKUs, there were a lot of product and purchasing patterns to be kept track of. Many companies begin by using cash accounting, especially for inventory, but as they grow, that often gets grown out of. This company was still on a cash basis, which made it difficult to truly understand profitability, especially on a SKU by SKU basis. On top of getting them onto an inventory management system, we converted their accounting to an accrual basis… providing them better visibility into where they are making and losing money.

Results

Through GrowthLab’s accounting team, we were able to get this company’s financials in a better position, while also helping them to understand the underlying correlations of what was happening in their business. Our goal was not only to help them with cleaning up and organizing their books but to also position the whole company to succeed. They are now able to grow the company, turn a profit, and they are on track to do close to $6 million in sales, only a few short years later! 

Check out how GrowthLab has helped another apparel company!

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.