Retail accounting software for easy inventory and sales

Published Wednesday 5 November 2025

Table of contents

• What makes retail businesses different
• How retail accounting software can help
• Key features every retail business needs
• Inventory management made simple
• Accept payments and integrate with your POS
• Managing cash flow and financial reporting
• Essential retail accounting practices
• Connect with retail apps and integrations
• Getting started with retail accounting software
• FAQs on retail accounting software

Key takeaways

• Prioritise retail-specific accounting software that includes built-in inventory management, POS integration, and multi-channel sales support rather than adapting generic business software to your retail needs.

• Implement daily reconciliation practices by recording every transaction immediately and checking your POS system against bank feeds to catch errors quickly and maintain accurate inventory counts.

• Utilise cloud-based accounting software that integrates with over 1,000 retail apps to create a connected system linking your POS, e-commerce platform, inventory management, and payment processors.

• Maintain separate business and personal bank accounts while keeping all financial records for at least five years to meet Australian tax requirements and ensure proper audit trails.

What makes retail businesses different

Retail businesses face unique accounting challenges that general accounting software often can't handle effectively. Unlike other businesses, retailers must manage:

• Multiple sales channels: Online stores, physical locations, and marketplaces
• Complex inventory: Stock levels, product variants, and seasonal fluctuations
• High transaction volumes: Hundreds of daily sales requiring automated processing
• POS integration: Seamless connection between sales systems and accounting records

These complexities mean retailers need specialized software that goes beyond basic bookkeeping.

How retail accounting software can help

Modern retail accounting software integrates with over 1,000 business apps, creating a connected system for your retail operations. This means your accounting software can automatically sync with your POS system, e-commerce platform, inventory management tools, and payment processors.

Essential features to evaluate when choosing retail accounting software:

• Retail-specific design: Look for built-in inventory management, point-of-sale (POS) integration, and multi-location support rather than generic business software.
• User permissions: Ensure different access levels for owners, managers, and staff to protect sensitive financial data.
• Cloud-based access: Access your accounts anywhere, get automatic backups, and connect easily to retail apps.
• Scalability: Choose software that grows with your business, allowing unlimited users and locations.
• Inventory tracking: Essential for retailers – either built-in or through seamless app integrations.

Whichever retail accounting software you choose, be sure to keep all your important information safely archived, including sales records, loan statements, bank information and tax data. You'll need it for tax returns and potential audits, and in Australia, there is generally a 5–year retention period for business records, starting from when the record was created or the transaction was completed, whichever is later.

Key features every retail business needs

When choosing software, look for tools built to handle the fast pace of retail. These features can help you run your store more efficiently and make smarter decisions.

• Inventory tracking: See what's in stock, what's selling, and when to reorder, all in real time.
• Point-of-sale (POS) integration: Connect your sales system to automatically record daily sales and payments, saving you hours of manual data entry.
• Sales reporting: Get a clear view of your sales performance by product, location, or channel to understand what's driving your revenue.
• Payroll management: Pay your team accurately and on time, while handling taxes and superannuation with ease.
• Multi-channel sales: Manage sales from your physical store, online shop, and other marketplaces all in one place.

Inventory management made simple

Your stock is your biggest asset, and managing it well can help your business thrive. Good accounting software with inventory management helps you turn stock into cash, faster.

You can track stock levels across all your locations, see which products are your best performers, and get insights to help you forecast demand. This means less money tied up in slow-moving items and more of what your customers love.

Accept payments and integrate with your POS

Make it easy for customers to buy from you, wherever they are. By connecting your accounting software to your point-of-sale (POS) system and payment gateways like Square or Shopify, your sales and payment data flows automatically into your books.

This means no more manual reconciliation at the end of the day. You get a clear, accurate picture of your daily takings without the extra work.

Managing cash flow and financial reporting

Retail accounting software gives you a real-time view of your cash flow, so you can see money coming in and going out. Retail accounting software gives you a real-time view of your cash flow, so you can see money coming in and going out.

Run reports like profit and loss or balance sheets with a single click to understand your financial health. With clear dashboards and easy-to-read reports, you can spot trends, manage expenses, and plan for the future with confidence.

Essential retail accounting practices

Daily accounting habits maximise your retail software's effectiveness and prevent costly mistakes. Focus on these essential practices:

Keep a record of every transaction

Record every transaction immediately: All sales, inventory purchases, payroll, and expenses. This creates real-time visibility into your retail performance and prevents discrepancies during busy periods.

Check and reconcile

Reconcile daily: Check transactions against your point-of-sale (POS) system and bank feeds every day. This catches errors quickly and ensures your inventory counts match your sales records.

Review the difference between money coming in and money going out

Review the difference between money coming in and money going out, as this shows your profit or loss. Keep a close eye on this to see how your business is performing each day.

Collect all required tax information

Make backups. Check local laws for the information you need to keep for tax and payroll purposes. Store it securely.

Ensure ledgers are properly defined

Set up the right ledgers in your accounting software – ask an accountant to help here if necessary.

Keep ledgers updated

Move your receipts from sales and purchases into your ledger. Do this every day if possible, or at least three times a week. Staying up to date is especially important if business is booming.

Get an outside perspective

Have your financial advisor or accountant review your ledger once a week or once a month. Identify discrepancies or a shortage of cash flow as soon as possible.

Get regular reports

Use your accounting software's features. The best retail accounting software can generate useful reports to help you understand how your business is running.

Keep a paper trail

Keep paperwork such as receipts and invoices, along with payment notifications for inventory or payroll.

Keep business separate from personal

Have separate bank accounts for business and personal finances. The ATO states that if you're operating through a partnership, company, or trust, you must have a separate bank account for that business.

Consider setting up separate bank accounts for expenses and incoming revenue too. Setting up separate bank accounts for expenses and incoming revenue can make it easier to notice discrepancies.

Remember to file tax returns

Meet government deadlines for tax returns, employee tax returns and all other necessary reporting. Check government websites for key dates.

Watch your cash flow

Set up processes and controls to check your cash flow on a frequent basis. Share this information with a trusted advisor, such as your accountant. Monitor your cash flow regularly to avoid unexpected shortages.

Connect with retail apps and integrations

No single tool can do everything. Make sure your accounting software connects to the other apps you use to run your business. Xero integrates with over 1,000 apps in the Xero App Store, including leading retail tools for point-of-sale (POS), inventory management, and staff scheduling. This allows you to build a custom solution that fits your business perfectly.

Getting started with retail accounting software

Ready to streamline your retail accounting? Use accounting software to manage inventory, process sales, and track profitability. With automated processes and real-time insights, you'll spend less time on bookkeeping and more time growing your business.

Try Xero accounting software for free and see how retail-focused accounting software can simplify your operations in just 30 days.

FAQs on retail accounting software

Here are answers to some common questions about retail accounting software.

What is the best accounting software for a retail business?

The best software is one that understands the unique needs of retail. Look for features like real-time inventory tracking, seamless integration with your point-of-sale (POS) system, and strong sales reporting. Cloud-based platforms like Xero accounting software are popular because they offer flexibility and connect to a wide range of retail apps.

How does accounting software handle inventory for a retail store?

It helps you track stock levels automatically. As you sell products, the software updates your inventory count. This helps you know what to reorder and when, identify your best-selling items, and keep your inventory moving.

Can I connect my online store to my accounting software?

Yes. Most modern accounting software, including Xero accounting software, integrates with popular ecommerce platforms like Shopify. This connection automatically syncs your online sales, inventory, and customer data, saving you from manual data entry and giving you a unified view of your business.