Store owner at desk reviewing year-end reports

Year-end Checklist for Retail Success

by | Nov 23, 2022

Originally published: November 16, 2020

Updated: November 23, 2022

“You can’t really know where you are going until you know where you have been.” – Maya Angelou

Those words are never more appropriate when it comes to closing out the year for a retail business. Getting a snapshot of where your business is at – reviewing the past year, preparing earnings and tax information, and planning for the future – all require a thorough examination, and a year-end checklist is an essential part of that review.

Why it is important

The end of the calendar year is always a busy time for retail businesses. The holiday shopping season is ending, and stores are often inundated with returns. So, the last thing store owners want to do is year-end inventory. That’s why having monthly, and even weekly, inventory counts and reports are crucial and incredible time-savers.

“It’s important to proactively keep up with inventory management, so you can avoid the year-end count,” says Charles Owen, chief experience officer at Paladin Data Corporation, a leading provider of retail management solutions. “By investing only a few minutes of time every day, you can avoid the year-end physical inventory mayhem. By doing this, stores can focus on sales and marketing and do away with the added distractions and expense of end of year inventory counting.”

Owen says keeping accurate inventory records not only helps with year-end record keeping, it also lets stores optimize their inventory by eliminating products that don’t sell, properly locating items in the store, and detecting missing inventory. Stores that utilize comprehensive digital retail platforms can automate many of these processes which makes year-end tallying and reporting a breeze.

Year-end checklist

There are several informational items that every year-end checklist should contain.

√ Physical inventory

Physical year-end inventory reports not only provide you with information required for tax reporting, but they also let you evaluate how your inventory investment is performing.

“Reviewing, not just counting, your inventory is extremely important. When reviewing your inventory, you want to make sure everything is priced accurately, the right items are on the right peg, and the items are well lit and presentable. It helps you find shrinkage, too,” Owen explains. “If you do this habitually, at the end of the year all you have to do is push a button to get the information you need.”

The National Retail Federation’s annual Retail Security Survey found that the average shrink rate in 2021 was 1.5%. That represents $94.5 billion in losses, a shocking $3.7 billion increase over 2020.

√ Annual financial reports

Running year-end reports gives businesses both a snapshot of where they are at the end of each calendar year and a big picture of their progress over the past 365 days. These reports should include:

  • Profit and Loss Statement
  • Balance Sheet
  • Cash Flow Report

These reports are required for accounting purposes, although businesses should consult their CPA about specifics. A year-end snapshot also shows a business if it met its annual goals, which allows management to adjust goals for the coming year.

Owen suggests businesses prepare inventory valuation summary reports, accounting summary reports, and period comparative revenue reports. He says calculating gross margin return on investment (GMROI) is key to a business getting the most out of its inventory investment. GMROI analyzes how efficiently a store can convert inventory into cash.

√ Employee information and payroll

The end of the year is also a good time to update all the information you have on your employees. Things as simple as correct addresses, phone numbers and email addresses should be regularly reviewed. Payroll information such as salaries and tax deductions help businesses keep track of current employees, properly initiate new hires, and audit and remove former employees.

Employee review also protects your business against fraud and cyberattacks. One company, during a routine security assessment, found that the network accounts of close to 150 former employees were still active and approximately 17 of them were regularly being used. Even scarier, five of those accounts were employees who had been fired for stealing company information.

Employee records also give businesses a tool to review past staffing, plan future needs, and keep a handle on their access to business networks or company information. Time management and workforce management technology makes many of these processes effortless.

√ Marketing and sales

Part of the yearly planning process should include marketing and sales. Preparing your year-end checklist is a good opportunity to look at advertising campaigns and channels – website, email, social media, print, or broadcast. With good metrics, you can eliminate what doesn’t work and adjust your budget accordingly.

An annual review of your company’s website is also a good idea. Even if you don’t think it needs refreshing, auditing contact names, phone numbers, email addresses, and content is always a good idea.

√ Computer audit and update

Technology and a strong computer network are integral pieces of every successful business. Businesses should have equipment replacement plans worked into their overall budget. Just like delivery vans and forklifts, computer terminals, servers, payment terminals, and mobile devices should be annually reviewed and updated.

“The biggest mistake many businesses make when investing in retail technology is stopping once the system is in and operating,” Owen says. “Why do stores invest in a retail platform? The answer is pretty simple: to simplify operations, increase efficiencies, and make more money. Buying retail technology will help you do all of that, but only if you learn how to properly use it and continue to invest in it. You get out what you put in.”

If you haven’t already instituted a program of regularly backing up your files daily, month-end and year-end backup gives you a snapshot of where you finish each year. Many technology providers offer managed services that regularly update programs and back up computers or entire networks.

√ Update your vendors

It’s always good business to know who you’re buying from and have a relationship with their representatives. Whether you’re a member of a co-op and have a single vendor or buy from dozens of suppliers, keep those contact files up to date.

It’s also a good idea to update information from local vendors like your electrical, HVAC and plumbing contractors, as well as contacts at your local city, county, or parish. City council, county representatives, and state legislators are other lists that are often in need of revision. Those contacts change any time there’s an election.

√ Review and plan

The pandemic and recovery, the war in Eastern Europe, and the current inflation have provided plenty of economic turmoil. Regardless of what happens, businesses need a record of what happened this year – what worked, what didn’t, and what steps were required to fix what broke. A year-end checklist provides those records that let businesses plan and work toward success.

Business 101 says that SMART goals need to be set to help stores strive for success.


SPECIFIC - Goals should be well-defined and unambiguous.


MEASURABLE - Goals should be quantifiable. Earnings goals should be in dollar figures or percentages which allow businesses to measure progress and success.


ATTAINABLE - Setting unrealistic goals doesn’t do anybody any good and can’t be celebrated.


RELEVANT - Relevant goals focus on what’s important to business success and, therefore, personal success.


TIME-BASED - There should be a deadline to achieve goals – weekly, monthly, quarterly, year-end.

The year-end checklist can help you review successes from the past 365 days and plan for the year ahead.

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