THE RETAILER'S CALENDAR
As a retailer you know that sales during the week do not occur equally every day. Some days typically have higher sales, typically this is Saturday. Using the regular calendar, some months will have 4 Saturdays and some will have 5 Saturdays. When comparing this month, this year, to this month last year you may be comparing a month with 4 Saturdays to one with 5 Saturdays. This will skew the results.
Many, many years ago, retailers decided they needed their own calendar to be able to operate their stores more effectively. The result of this is the Retail 4-5-4 Accounting Calendar.
For purposes of forecasting sales, preparing advertising budgets, determining inventory requirements, comparing results of sales and expenses, a better accounting calendar is available.
The better accounting calendar is the 4-5-4 Retail Accounting Calendar. The 4-5-4 Retail Accounting Calendar divides the year into quarters with the first and last month of each quarter consisting of 4 weeks each and the middle month of each quarter consisting of 5 weeks. Each accounting calendar month will begin on a Sunday and end on a Saturday. Each accounting calendar month will have the same number of selling days as the same month last year. For example, March has 5 perfect weeks every year, 5 Saturdays, 5 Mondays, etc.
For holidays that are a set day of the week, such as Thanksgiving, there will always be the identical selling days before and after the holiday, year after year. There will always be two selling days in November following Thanksgiving. Each month will consist of either 4 or 5 perfect weeks making it very easy to analyze payroll costs. With the 4-5-4 Calendar, each accounting period for one business year corresponds to the same period next year, and the next. This provides an invaluable review and forecast tool for management.
The 4-5-4 Calendar is especially suited for use in preparing sales forecasts and operating budgets. Each month is a perfect 4 or 5 week period with each week ending on a Saturday. Since a large percentage of each weeks sales occur for most retailers on Saturday that is an important consideration for sales planning. With the regular calendar January this year may have 5 Saturdays and next year only 4 Saturdays. Also, since each month ends on a Saturday you will enjoy the convenience of taking physical inventory counts at week end and not having to either subtract or add sales which preceded or followed the physical count to arrive at a clean cut-off. The inventory counts should therefore be more accurate.
The 4-5-4 Retail Accounting Calendar was devised with the peculiar needs of the apparel and sporting goods retailer in mind. Our business cycles are those periods of time between the start and end of a sales season. In general, our business cycles end in July and January. Therefore, the 4-5-4 Accounting Calendar begins with the month of February, which is traditionally the beginning of the Spring selling season.
Changing to the 4-5-4 Accounting Calendar will make very few differences in the store's procedures. About the only difference is to realize that for the first year, sales comparisons can be made only at the end of each 13-week quarter. The 4-5-4 Accounting Calendar is also recognized by the IRS for income tax reporting purposes. It is referred to by the IRS as the 52-53 Week Year. To adopt the 52-53 Week Year it is necessary to file a statement with the tax return for the first tax year for which the election is made. Your local accountant can take care of this for you.
We have copies of the 4-5-4 Calendar. Send an email to get your copy. Also, if you have not used the 4-5-4 Calendar before, request our information sheet concerning it.
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