Why average cost fails at the showcase
A jeweller's stock is a few hundred unique pieces, not thousands of interchangeable units. One diamond solitaire cost you $2,100; the near-identical one beside it, bought two years earlier, cost $1,650. Average costing blends them and reports a margin nobody earned on a sale that never happened at that cost. Specific identification — every piece carried under its own stock number at its own cost, including setting labour and stones added at the bench — is the only method that gives a jeweller a true gross margin. It is also what CRA and your insurer expect to find behind the totals.
Our End-to-End Accounting engagement ties the piece-level records in your store system — The Edge, Lightspeed, or whatever runs your counter — to QuickBooks Online, so the general ledger inventory balance agrees with the physical case, piece by piece rather than only in total. Supplier invoices and refiner settlements flow in through Dext, so the cost attached to each piece has a document behind it.
Memo and consignment goods are not your inventory
A good share of what sparkles in the case may not belong to you. Goods on memo from a supplier remain the supplier's property until you sell them or send them back; consignment pieces from estates and private owners work the same way. Booking them as inventory overstates your assets, and it garbles the sale: your revenue on a consigned piece is really the margin or commission, with the balance owed to the owner from the moment it sells.
We keep memo and consignment registers outside the balance sheet, record the payable to the consignor on the day of sale, and reconcile those registers on the same rhythm as your owned stock. Your jewellers block insurer cares about the split too: goods held in trust sit under their own limit on the policy, and after a loss the claim is settled from records, not memory.
One counter, four revenue lines
Retail sales, custom orders, repairs and appraisals behave differently and deserve separate lines on the P&L. Repairs and appraisals are the steady-margin side of the trade — labour-heavy, almost no inventory risk, busy all year — and burying them inside "sales" hides the fact that they often carry the store through the quiet months. Custom work brings deposits, bench work in progress and delivery timing that a single sales line cannot show. When each line reports its own revenue and margin, you can finally see which part of the store earns its floor space.
| What is in the store | On your balance sheet? | What the books track |
|---|---|---|
| Owned stock bought for resale | Yes — inventory at each piece's own cost | Piece-level cost, released to cost of sales when it sells |
| Goods on memo from suppliers | No — the supplier still owns them | A memo register, and a payable the day one sells |
| Consignment pieces from private owners | No — held in trust | Consignor terms, and your commission as the revenue |
| Customer jewellery in for repair | No — goods in trust | Intake records your insurer will ask for after a loss |
| Layaway pieces with deposits paid | Yes — yours until the final payment | Customer deposits as a liability, never as revenue |
Layaway and custom deposits are liabilities, not sales
Money down on a layaway ring is a debt you owe the customer until the piece is delivered or the plan is cancelled under whatever refund terms you set. The same holds for the deposit on a custom order. We carry these balances as customer deposits, tag the reserved piece so it cannot be sold twice, and recognize the sale — with the HST on it — at delivery. The income-tax timing of those deposits is a genuine planning lever of its own, which we work through Tax Planning & Advisory rather than leaving to chance at filing time.
Counts, shrink and a close you can trust
Piece-level books make physical counts fast: scan the case, match the register, explain the exceptions. We set a counting rhythm — a full count at year-end, cycle counts case by case in between — so shrink surfaces in weeks instead of at an annual scramble, and the insurance schedule stays current while it does. Month-end lands on schedule for the jewellers we work with across Mississauga and the GTA: margin by revenue line, inventory agreed to the last count, deposit balances reconciled, and the HST return built from the same numbers. Bookkeeping, payroll for your goldsmith and counter staff, financial reporting and tax filing sit under one roof, scoped and quoted in writing after a free 15-minute discovery call.
