Shoe store accounting in Pakistan: sizes, seasons and stock
A shoe shop has an accounting problem most retail does not: the same article is five different products. The size 7 that sells in a week and the size 11 that clears at half price arrived in the same carton at the same cost — and treating them as one stock item is how footwear profit gets misread. Here is how the books actually work: size-wise valuation, seasonal buying, dead sizes, exchanges and the wholesale-retail split. The margin math behind it sits in retail profit margins in Pakistan.
1. Stock is valued per size, not per article
An article is a design; your stock is sizes. Forty pairs of one article across sizes 6–11 do not sell as forty identical units — 7, 8 and 9 move first, while 6 and 11 wait for the rare foot that fits them.
Bought at Rs 1,800 a pair and retailed at Rs 3,200: if the season ends with three 6s, three 10s and three 11s unsold, that is Rs 16,200 of cost sitting on the shelf in sizes the market never ordered. The article 'sold well' — and still left a fifth of its cost behind.
Books that value stock per article show Rs 16,200 of inventory. Books that value it per size show nine pairs that will only move at a discount — which is the truth, and it changes what you reorder.
2. The seasonal cash cycle: Eid, weddings and the gap between
Footwear buying is front-loaded. Eid stock lands four to six weeks before Eid and is paid for before the rush returns the cash; the winter wedding season repeats the cycle. The season's profit is real — it just arrives after the season's bill.
Say Rs 1.2 million of Eid stock paid mid-March against sales that return it by late April. Those five weeks are funded by lean-month profit, by supplier credit, or by last year's savings. A shop that only tracks 'did Eid go well' misses the question that actually decides survival: what carried March.
What the books need: each season's buy recorded against that season's sell-through — so next year's order is sized from evidence, and the cash gap is planned rather than discovered.
3. Dead sizes: the write-off nobody books
When the season ends, leftover sizes clear at cost or below — the Rs 1,800 pair going at Rs 1,400 in the clearance basket. If the write-down never enters the books, stock value is a fiction and last year's profit was overstated.
Nine dead pairs written down Rs 400 each is a Rs 3,600 loss. Small — until you realise it is happening to every article, every season, and the average margin you believed in was a best case.
Rule of thumb: value closing stock at what it will actually fetch, not what it cost. A dead size is still cash — just cash wearing an expensive disguise.
4. Which sizes earn: margin at variant level
Two pairs of the same article can carry very different real margins — the size 8 sold at Rs 3,200 full price and the size 11 that cleared at Rs 2,200. The article's margin is an average of its sizes' margins, and averages hide the buying mistake.
Once margin is visible per size, the buy ratio stops being guesswork: reorder deep where sizes sell through at full price, thin where they always end in the clearance basket. The mechanics of tracking stock this way are in managing product variants — sizes and colours.
5. Exchanges: when a 'sale' was never revenue
Shoe retail runs on exchanges — the size pinched, the colour looked different at home, the gift did not fit. An exchange is a stock swap: the first pair returns to the shelf, the second leaves. Booked as a fresh sale without reversing the first, it inflates revenue and corrupts the size counts your buying depends on.
Advance bookings are the mirror image — Rs 500 taken to hold a pair is a liability until the customer collects, not a sale. Both need to land in the books as what they are.
6. Retail and wholesale from the same shelves
Plenty of Pakistani shoe shops do both: walk-ins at Rs 3,200, the smaller shops of the next bazaar at Rs 2,500 wholesale. Same pair, two margins. If revenue is not split by channel, the wholesale volume quietly dilutes what you think the shop earns — and the khata those trade customers run becomes the biggest receivable in the business.
Wholesale udhaar behaves differently from retail credit: bigger amounts, longer cycles, real default risk. It needs named balances and ageing — the discipline behind udhaar tracking applies to trade customers too.
7. What the books must show every week
Footwear accounting comes down to six numbers kept honest — the same numbers a fashion POS tracks at the counter:
- Stock value by article and by size — not article totals
- Each season's buy against that season's sell-through
- Dead and damaged pairs written down to real clearing price
- Exchanges reversed properly; advances held as deposits
- Retail and wholesale revenue split, with margin per channel
- Wholesale khata balances with ageing — who owes what, since when
Frequently asked questions
How should a shoe shop value its closing stock?
By size, not by article — count pairs at cost, then mark dead sizes down to what they will actually clear for. An unsold size 11 valued at full cost overstates your stock and last year's profit.
Is a customer exchange recorded as a sale?
No — it is a swap. The returned pair goes back into stock and the new pair goes out; booking it as fresh revenue inflates sales and corrupts the size counts your buying relies on.
How much should I buy for Eid?
Work from last year's Eid sell-through by article and size — never from the season's total. Sizes that sold out at full price get reordered deep; sizes that only cleared at discount get bought thin or skipped.