Question

•How does the accounting for merchandising/retail companies differ from service companies and manufacturing companies?
•What might the different challenges be across these different types of businesses (retail, service, manufacturing)?

Response should be healthy in length, about 150 words.

Answer 1

Ans.a)

Difference between merchandise, service & manufacturing companies :-

service company

These type of company provide service to its customers, it could be defined as selling your time, or also known as labour company. These type of company provide services to private and commercial clients. A few examples of service companies are : accounting firms, physical therapy offices, handyman companies, a mechanic shop, etc.

Merchandise company

These type of companies sells physical goods or product to it's customers, and the most common types of merchandise companies are department stores, grocery stores, dealership etc. There are also two subcategories under this classification, because a merchandise company can be either a wholesale company or a retail company.

The difference between wholesale and retail is that wholesaler buy directly from manufacturer and then they sells the merchandise to retailers, and the retailers buy from wholesalers ( sometimes directly from the manufacturing company) and sells to their customers.

Manufacturing company

A manufacturing company is in charge of producing the physical goods that they sell to wholesalers or retailers, and sometime directly to the consumer. manufacturing companies could be makers of clothing, automobile manufacturers, and other types of factories that involve production.

Ans.b)

The different challenges be across these different type of businesses are:-

Retail business

1. Undergo the new normal protocol to prevent covid 19 transmission.

2. Keeping up with ever changing Customer expectations.

3. Maintaining customer loyalty

4. Managing internal communication

5.Retaining and engaging employees

6. A high-stakes global game of digital disruption

7. Finding the best technology solutions for the retail industry

Service business

1. Knowing who the customer is

2. Knowing what the orgisation is selling / providing

3. Managing the outcome and experience

4. Managing the customer

5. Service in real time

6. Co-ordination

7. Knowing the relationship between operation decisions and business success

8. Improving the operation

Manufacturing business

1. Forecasting demand for product

2. Controlling inventory

3. Improving efficiency at manufacturing plant

4. Incresing ROI

5. Skilled labour shortage

6. Managing sales lead

7. Coping with new technolgical advances.