Wholesale and Retail
Overview of the Sector
The wholesale and retail industry functions within a high-volume, low-margin environment, characterized by rapid inventory turnover, multi-location operations, and complex supply chains. Entities in this sector — ranging from traditional distributors to organized retail chains and omnichannel platforms — require robust audit mechanisms to ensure financial integrity, compliance, and operational efficiency.
Financial complexities in the sector stem from diverse revenue streams (cash and credit sales, loyalty programs, online channels), frequent discounting practices, returns, and promotional schemes. Revenue recognition must be aligned with Ind AS 115, particularly where sales incentives, bundled offers, and consignment arrangements are involved. Inventory valuation poses a significant challenge, with the need to apply consistent and accurate costing methods (FIFO, weighted average), monitor shrinkage, and account for obsolete or slow-moving stock.
Auditing becomes intricate due to the sheer scale of transactions, decentralized billing systems, and reconciliation of POS (Point-of-Sale) data with books of accounts. Internal controls over cash management, daily sales reconciliation, stock movement between warehouses and outlets, and vendor rebates must be tested rigorously. In large retail operations, verification of ERP systems and inventory management modules is critical to mitigate fraud and leakage.
The sector is also subject to regulatory scrutiny under the Goods and Services Tax (GST), with complications arising from input tax credit claims, e-invoicing mandates, HSN classification, and supply chain restructuring. TDS/TCS compliance on purchases and sales (especially in B2B transactions), along with proper recognition of promotional expenditure and vendor support, requires close audit attention.
In a competitive and price-sensitive market, a strong audit framework enhances operational transparency, strengthens internal governance, and supports strategic decision-making — enabling wholesale and retail businesses to scale efficiently while ensuring compliance with financial and tax regulations.
The wholesale and retail industry operates on high transaction volumes, thin margins, and complex inventory cycles — making strong financial oversight essential. At P. Srinivasan & Co., we provide specialized audit services to distributors, retail chains, supermarkets, and e-commerce businesses, addressing sector-specific challenges such as inventory valuation, revenue recognition, discounting policies, and multi-location reconciliations. Our audits focus on validating sales data, analyzing pricing strategies, and ensuring accurate recognition of promotional expenses, loyalty programs, and vendor incentives.
We also assess inventory management systems, stock movement controls, and physical verification processes — key to detecting shrinkage, obsolescence, or stock mismatches. For businesses with integrated ERP or POS systems, we perform system audits to ensure transactional integrity and accurate financial reporting. We examine compliance with indirect tax regulations, particularly GST classification, input tax credit reconciliation, e-invoicing, and TCS obligations applicable to retail and B2B trade.
Our audit services extend to reviewing internal controls over procurement, cash management, credit policies, and supply chain operations, while also ensuring timely statutory compliance under the Income Tax Act and Companies Act. For entities operating across franchises or multiple outlets, we assist in group consolidation and related party disclosures.
With deep industry insight and a control-focused approach, P. Srinivasan & Co. enables wholesale and retail businesses to strengthen financial discipline, improve process efficiency, and ensure transparency — laying a sound foundation for scalable and compliant operations.
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Systems & process setup & implementation
We design and create audit plan and execute audit procedures which enables our clients to have the audited reports at their fingertips -
Tax advisory
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Authenticating Records
We look into the accounting records and provide valuable feedback and help the organisations win against any hurdles that come their way -
Strategize Growth
We help with people management, business planning and brainstorming ideas effective for the growth and development of the business/ organisations. -
Mergers & Acquisitions
As a Chartered Accountant, we play a crucial role in guiding businesses through the complexities of mergers and demergers.