Accounting Tips for Fashion Entrepreneurs: Keep Your Finances as Stylish as Your Designs

What were the best accounting tips you’ve gotten that you wish you listened to? Many fashion business owners spend so much time focused on designs and collections that accounting often takes a back seat. We’re glad to share a few accounting tips for fashion entrepreneurs that will help you keep your finances as stylish as your designs.

Like any creative business owner, fashion entrepreneurs find it particularly challenging to stay on top of their finances. From managing seasonal inventory to tracking production costs and marketplace sales, the financial demands can feel overwhelming.

Our fashion industry clients often share that they struggle most with which includes:

• • Keeping track of sample costs and seasonal stock

• • Managing cash flow across multiple sales channels

• • Production costings

• • Dealing with marketplace reconciliations

Financial Planning Tools

Like any creative business, fashion companies need good forecasting tools to manage seasonal cash flow. Modern software makes this much easier than old-style spreadsheets.

There are several accounting tips you can follow. We recommend starting with a software that can help you project your finances up to 10 years ahead and show your data in clear visual reports.

Tip: When choosing your tools, make sure they can work together with your other business systems. This saves time and reduces errors in your financial records.

Daily Financial Management for Fashion Businesses

Many of our fashion clients tell us that daily bookkeeping is their biggest headache. At Green & Peter, we understand how challenging it can be to balance creative work with financial record-keeping.

Recording Your Daily Sales and Expenses

Fashion businesses often struggle with tracking multiple revenue streams. They find it particularly challenging to keep up with in-store sales, online purchases, and marketplace transactions. We recommend using a standardised system to record your daily figures.

Make sure you track these key elements every day:

• • Total sales across all your channels

• • Average sale value

• • Sales in different categories

• • Staff performance figures

• • Returns percentage

• • Stock movement

Tip: Set up payment reminders a few days before due dates to help with cash flow.

Working with Multiple Payment Systems

We often see fashion businesses losing sales because they don’t offer enough payment options. Adding more payment methods can boost your sales by up to 30%. If you limit payment options, you might lose around 13% of potential sales.

Different payment systems work better in different regions. When managing multiple payment platforms, we help our clients focus on:

1. 1. Choosing cost-effective payment routes

1. 1. Checking approval rates regularly

1. 1. Meeting cross-border rules

1. 1. Connecting with main accounting systems

Managing Marketplace Accounts

If you’re selling through online marketplaces, you’ll know how tricky it can be to track all the different fees and payment schedules. Choosing the right accounting partner can help you avoid losing money through hidden charges and complex refund processes.

Regular checks help spot overcharges and duplicate payments, saving you money over time. We recommend checking these items regularly:

• • Payment amounts received

• • Platform fees and commission

• • Payment timing

• • Bank transfer confirmations

Understanding Production Costs in Fashion Business

Production cost analysis is not an easy task. Many of our fashion clients tell us they’re unsure if they’re making a profit on each design. Let’s look at how to get these numbers right.

Working Out True Cost Per Design

The fashion industry uses Standard Allowed Minute (SAM) calculations to work out production costs. For example, a basic shirt typically takes about 25 minutes to make in a factory.

Our fashion clients often overlook hidden costs in their calculations. We’ve found that fabric usually makes up 60-70% of costs for simple garments. When working out your true costs, remember to include:

• • Materials and fabric

• • Cutting and stitching labour

• • Factory overheads

• • Packaging and delivery

• • Quality checks

Getting a Grip on Manufacturing Costs

Like any other business expense, manufacturing costs need careful tracking. We help our clients split these into three main areas:

• • Direct labour (cutting, stitching, quality control)

• • Indirect labour (management, admin, HR)

• • Overheads (rent, insurance, utilities)

Many of our fashion clients find this four-step approach helpful:

1. 1. Work out your per-minute factory costs

1. 1. Account for lost time (usually 25%)

1. 1. Add your profit margin (typically 20%)

1. 1. Keep track of order sizes – they affect efficiency

Managing Sample Costs

Sample making can eat into your budget faster than you might think. We usually advise our fashion clients to add 25-50% extra to their sample budget for unexpected costs.

Your tech pack is crucial here – it needs all your technical details, measurements and diagrams. We’ve seen clients save money using 3D design software before making physical samples.

Tip: UK manufacturers typically charge £397-794 per sample, while overseas factories might offer better rates or include sampling in their package.

Complex designs cost more to sample and produce. We often suggest simplifying things like panels, pockets and zips to keep costs down.

Growing Your Fashion Business Finances

Many of our fashion clients tell us that scaling their business brings new financial challenges. It’s important for any starting fashion entrepreneurs to build strong financial foundations for growth.

Planning Your Business Growth

We often get asked about the best way to scale a fashion business. Research shows that fashion companies with proper financial processes are 83% more likely to survive their first five years. Our clients find these areas most important:

• • Cash flow forecasting

• • Stock management systems

• • Clear pricing structures

• • Performance tracking

• • Risk management

Running Multiple Shops

Like any other business owner, fashion entrepreneurs find managing multiple locations challenging. We’ve helped many clients set up cloud-based systems to track stock and sales across different shops.

Here’s what works best for our multi-shop clients:

1. 1. Standard procedures for every location

1. 1. Central stock management

1. 1. Clear staff communication

1. 1. Consistent staff training

1. 1. Regular performance checks

Tip: Regular shop audits help maintain quality across all your locations.

Going International

At Green & Peter, we understand that international expansion brings complex challenges. Most of the clients we support often struggle with two main funding stages: getting started with minimum products and scaling up for full production.

When helping clients expand internationally, we focus on:

• • Different payment systems in each country

• • Managing currency exchange costs

• • Local tax rules and compliance

• • Warehouse and delivery planning

Some specialist fashion funds now support sustainable fashion growth. These can help with new technologies like 3D printing and eco-friendly materials.

Successful international fashion brands need systems that work across different markets while keeping reporting consistent. Many of our clients find success using mixed funding from private and charitable sources.

Working with Fashion Finance Professionals

We often get asked when fashion businesses should bring in professional financial help. Many of our clients tell us they waited too long before seeking expert guidance. Here are a few signs you need to watch out for:

Signs You Need an Accountant

Like any creative business owner, fashion entrepreneurs often struggle with financial management in their early years. You might need professional help if:

• • Your business is growing quickly

• • Basic accounting software isn’t enough anymore

• • Investors want detailed financial reports

• • Tax matters are getting complicated

• • Your sales are up but profits aren’t

• • You’re thinking about selling overseas

Tip: Fashion businesses with professional financial guidance tend to be more profitable and attract more investors.

Finding the Right Financial Expert

Your fashion business needs more than standard accounting tips and services. You need someone who understands seasonal collections, stock management, and production costs.

When choosing your accountant, look for:

1. 1. Proper qualifications (ACCA certified)

1. 1. Fashion industry experience

1. 1. Knowledge of fashion business challenges

1. 1. Success with similar fashion brands

1. 1. Understanding of current trends

1. 1. Experience with international trade

Many of our creative clients tell us that industry expertise made all the difference to their business growth.

Growing Your Finance Team

As your fashion brand grows, you might need different financial experts including:

Supply Chain Finance Manager: Handles materials buying and financial planning – crucial for fashion’s long cash-flow cycles.

Accounts Team: Manages relationships with suppliers and stockists, keeping your cash flowing smoothly.

Retail Finance Manager: Looks after day-to-day shop finances.

Chief Financial Officer: For bigger brands, oversees all financial operations.

A basic three-year financial forecast might cost around £700, but good financial advice pays for itself many times over.

Need More Tips in Managing Your Finances?

Like any other creative business owner, fashion entrepreneurs often find it hard to balance creative work with financial management. Many of our fashion clients tell us they feel overwhelmed trying to handle both sides of their business.

At Green & Peter, we understand that fashion business success needs both creative talent and solid financial foundations. Our fashion industry clients often share that once they get their finances sorted, they feel more freedom to focus on designing and creating.

Contact us or give us a call on 020 8446 8100 for an informal chat about your finance needs. Let us handle the numbers while you focus on what you do best – creating amazing style.