Accounting and Finance in Tariff Economy (Furniture and Appliances)

Introduction

Tariffs don’t just increase costs — they rewrite financial logic. As duties swell landed cost, finance teams must adapt quickly: absorb cost upstream, forecast cash flow in tighter cycles, and align accounting processes to duty-inclusive valuation. In 2025’s tariff economy, the winners are those who move from reactive to strategic. This article walks you through what to do first, why the shift matters now, and how to capture the upside.

What to Do First

• Capitalize duties and import fees into inventory rather than expensing them upfront.
• Install a rolling 13-week cash-flow forecast that layers in duty-paid dates, consumer financing flows, and seasonality.
• Strengthen receivables: deploy multi-lender consumer financing models, monitor true cost of credit, and tie inventory financing to duty cycles.

Why This Matters Now

With reciprocal tariffs at +10% and §232 steel/aluminum duties at ~50% of steel content, landed cost is not a “nice-to-know” — it’s a core part of your cost structure. Yet tax relief is improving — e.g., §199A pass-through deduction at ~20% is now permanent — but it’s back-end and won’t offset per-unit cost inflation. Without duty-aware valuation, you risk misstated inventory, unexpected cost hits, liquidity stress, and weaker credit negotiation positions.

Tactical Checklist

• Inventory Valuation: ensure duty and freight add-ons flow into cost of goods sold (COGS) at the point of sale.
• Liabilities & Cut-off: create duty payable accounts, reconcile estimates vs actuals, and ensure in-transit freight and duty are accorded properly.
• Cash-Flow Strategy: build 13-week rolling forecasts, layer consumer financing receipts, and link to duty-payment schedules.
• Financing: evaluate inventory financing (ABL) aligned with duty-loaded cycles, implement dynamic discounting when cash allows.
• Reporting: build dashboards that track contribution after duty by SKU/category/channel/vendor; monitor DSO, aging for consumer and trade.

The Payoff

When accounting & finance systems accommodate duty and sourcing dynamics, you unlock:

• Strengthened financial posture with lenders, leveraged via clear duty-impact modeling.
• More accurate inventory valuation and cleaner P&L.
• Better cash-flow visibility and fewer funding surprises.
• Ability to act fast on vendor rate changes or duty shocks.

FAQ

Sources (primary)

_{White House / Federal Register; USTR; BLS CPI & Employment (July 2025); IRS/legislative summaries; STORIS Finance documentation.}

See: Merchandising in a 2025 Tariff Economy for the first of these comprehensive guides.

This accounting and finance blueprint represents the second in a series of comprehensive guides STORIS has committed to publishing over the next three months. The company plans to release tactical resources covering every area of retail operations—still to include: Business Intelligence, Inventory Control, Sales, Customer Service, IT Infrastructure, and eCommerce—all provided free to the industry.