I run into this situation a lot when I advise one-person shop owners: you’re brilliant at your product and customer service, but bookkeeping feels like a jumble of receipts, tills and end-of-day cash. If your retail shop is a sole trader or single director limited company with under £50k turnover, you don’t need an elaborate accounting department — but you do need a tidy, reliable system that saves time, keeps you tax-compliant and gives you clear answers about profitability and cashflow.
Start with the simple decisions (they matter)
Before you buy software or set up spreadsheets, make three quick decisions. These will shape everything else.
Pick a core bookkeeping tool — bank feeds are your best friend
My rule: eliminate manual entry where possible. Connecting your business bank account to accounting software transforms reconciliation from a chore into a 10–20 minute weekly task.
Recommended tools for small UK retailers:
Choose one, connect your business bank account, and enable bank rules so routine transactions categorise automatically (e.g. card processor fees go to “bank fees”).
Set up a simple chart of accounts
Don’t overcomplicate this — you want categories that answer two questions: “How much did I sell?” and “How much did I spend to sell it?” Here’s a starter table you can copy into your software.
| Account | Use |
|---|---|
| Sales – Retail | All takings from goods sold (exclude VAT if registered) |
| Cost of Goods Sold (COGS) | Stock purchases and direct product costs |
| Opening/Closing Stock | Value of stock at period start/end (if using simple stock tracking) |
| Bank Charges & Card Fees | SumUp/Zettle/Square fees, overdraft charges |
| Supplies & Small Equipment | Packaging, bags, till roll, small tools |
| Rent & Utilities | Shop rent, electricity, gas, water |
| Advertising & Marketing | PPC, social ads, flyers |
| Owner’s Draw / Salary | Money you take out (sole trader) / director pay |
| Tax & NI | Tax provisions and PAYE if applicable |
Daily and weekly routine — build habits
Consistency beats perfection. Here’s the routine I suggest for a one-person retail shop:
Handling cash and card takings
Retail shops often run mixed payments. My preferred approach:
Stock and simple inventory
You don’t need a full ERP. For a small shop, a simple stock folder works: a weekly top-line count of best-selling items and a monthly stock valuation (opening stock + purchases - closing stock = COGS). If you’re using software, Xero and FreeAgent have add-ons or built-in simple inventory tracking. Track stock as part of your monthly routine so margins and ordering decisions are based on real data.
Receipts, expenses and paperwork
Digital-first is the only approach I recommend. Use one of these receipt apps to photograph and file receipts:
Attach every expense to a purchase, categorise it and include the supplier invoice or photo of the receipt. Keep physical receipts only if HMRC requires them for your paperwork, otherwise a clear digital image is sufficient.
Tax and compliance notes
Quick points to keep you out of trouble:
Monthly checklist I use with clients
When to bring an accountant in
You don’t need an accountant for daily bookkeeping, but bring one in when you:
I provide fixed-price packages for small retail clients that include periodic checks and annual accounts, which is a cost-effective way to make sure you’re compliant and taking advantage of allowable expenses.
Set up the basics first: one bank account for the business, one bookkeeping tool with bank feeds, a simple chart of accounts, and a weekly reconciliation habit. Those few steps remove the stress of bookkeeping and free you to focus on what you do best — serving customers and running the shop.
