Advisors, lenders & money services
Books and taxes for pawn shops.
Interest collected when a loan is redeemed, a forfeited ring that becomes inventory at what was loaned against it, a gold chain bought outright at the counter. Your own bookkeeper sorts it, an accountant checks every transaction, one number a month.
- From $197 a month
- An accountant on every transaction
- Cancel whenever
December cleared $15,600. Six loans went unredeemed and became inventory this month, so I moved them onto the shelf at what was loaned, not at what they might sell for.
- Loan redemption interestPawn loan interest
- Forfeited jewelry resaleResale income
- New pawn loans extendedLoans outstanding
- Buy counter purchaseInventory purchases
- Police reporting service feeCompliance costs
Why your books are different
A pawn shop's books go wrong in a few particular spots.
A generalist bookkeeper sees cash go out the door on a loan and calls it an expense. Your loans are money the shop expects back with interest, a forfeited item becomes inventory at what it was loaned against, and a buy counter purchase never goes through a loan at all.
-
1
A new pawn loan is not an expense
Cash handed out against collateral is money the shop expects back with interest when the customer redeems it, and treating that outflow as an ordinary expense makes a busy, healthy loan book look like the shop is losing money every week.
What we doTracks pawn loans as outstanding loans, an asset the shop expects back, separate from the interest income that is the shop's actual earnings. -
2
A forfeited item's cost is what was loaned, not what it might sell for
When a loan goes unredeemed, the collateral becomes shop inventory, and if it gets valued at a guessed resale price instead of the actual amount loaned against it, profit on the eventual sale is a guess too.
What we doMoves forfeited collateral into inventory at exactly what was loaned against it, so profit on the resale is real when it finally sells. -
3
Buy counter purchases and pawn loans get confused
An item bought outright at the counter never goes through a loan at all, and mixing that straight purchase in with loan-sourced inventory hides which part of the business, lending or buying, is actually driving resale profit.
What we doKeeps buy counter inventory separate from forfeited loan inventory, so each side of the business shows its own real performance. -
4
Compliance reporting costs get lost in general overhead
A subscription to a police reporting service for tracking pawned and purchased items is a real, required cost specific to running a licensed pawn shop, and generic bookkeeping tends to file it as unlabeled admin expense.
What we doKeeps compliance reporting costs in their own category, so you can see what staying compliant actually costs each year.
Your categories
The categories Gus keeps for a pawn shop.
Set up once for how the shop lends, buys, and resells. You never pick a category. He does, and an accountant checks it.
Money in
- Pawn loan interestInterest and fees collected when a customer redeems a loan.
- Resale incomeSales of forfeited collateral that became shop inventory.
- Buy counter resaleSales of items bought outright rather than through a loan.
- Layaway feesFees earned on layaway plans for held merchandise.
Money out
- Loans outstandingCash extended against collateral, tracked as money the shop expects back.
- Inventory purchasesItems bought outright at the buy counter, tracked at cost.
- Compliance costsPolice reporting services and required recordkeeping tools.
- LicensingState and local pawnbroker license and permit renewals.
- Vault and securitySafes, alarm monitoring, and security cameras for held collateral.
- Appraisal toolsGold testing, gem testing, and electronics diagnostic equipment.
What we watch for you
- Redemption rate
How many loans are redeemed versus forfeited, the clearest sign of loan book health.
- Inventory turn
How quickly forfeited and purchased items actually sell off the shelf.
- Buy counter margin
What outright purchases resell for against what was paid, apart from loan-sourced items.
- The set-aside
What the shop will owe on redemption interest and resold inventory, tracked monthly.
Ask Gus
Things pawn shop owners ask Gus.
Text him like you would text anybody. He answers in plain English, and when a question is above his pay grade, an accountant looks and gets back to you.
No. That is money the shop expects back with interest, so it sits as an outstanding loan, not an expense that eats into your profit number.
Exactly what you loaned against it, not a guess at resale value. When it sells, the real profit shows up honestly.
No, I keep buy counter inventory separate from forfeited loan inventory, so you can see which side of the business is actually driving your resale profit.
The tax side
The tax side of a pawn shop.
Most of what matters here is keeping loan principal, interest, and inventory cost basis straight, since these are the places a pawn shop's numbers usually go sideways.
What your return has to get right
Your accountant signs it, so it gets done right the first time.
- Loan principal is not a deductible expenseCash extended against collateral is an asset the shop expects to collect, not a business cost, and should never reduce taxable income the way an operating expense would.
- Forfeited inventory is valued at its cost basisWhen a loan goes unredeemed, the item generally becomes inventory at the amount loaned against it. Profit is realized, and taxed, only when it actually sells.
- Section 179 on equipment and security systemsVaults, security systems, and appraisal equipment bought for the shop can usually be written off in the year bought, up to $2,560,000, with bonus depreciation covering 100 percent of qualifying property bought after January 19, 2025.
- Interest and resale profit combined for the S corp questionLoan interest and resale margin together make up a shop's real profit, taxed at 15.3 percent for self-employment tax up to the $184,500 wage base for 2026, worth weighing against an S corp election due March 15.
Deductions pawn shops miss
Your bookkeeper knows what to look for in your statements. You never have to.
- Police reporting service fees
- Vault and alarm monitoring
- Gold and gem testing equipment
- State and local pawnbroker licenses
- Surety bonds
- Security cameras
- Storefront rent
- Point of sale software
- Employee background checks
- Display cases and shelving
- Utilities for the location
- Errors and omissions insurance
General information about 2026 federal rules, not advice for your business. Your accountant looks at your actual numbers before anything gets filed.
All year, not just April
A pawn shop's year, kept every month.
Loans and forfeitures happen every week of the year, with a real jump around the holidays. Your team keeps the shop's own books current through all of it. Every month in between, your bookkeeper closes the books and speaks up the moment something looks off.
- January
Year planned
Holiday loans redeem or forfeit, tax refund season brings buy counter traffic, and last year's return gets started with a monthly set-aside planned.
- April
Filed. Done.
Your return is filed and signed, with loan interest and inventory resales tracked separately all year, so the number due is accurate.
- July
Halfway check
Where the shop stands, what it will owe, and whether the redemption rate is holding steady through the summer.
- October
Before holiday season
A look at security and appraisal equipment worth buying before the December loan and buy counter rush.
What you get
What you pay depends on what your business needs, and it does not move after that, busy season or slow. No hourly bills, no surprise invoices, no setup fee.
Book a call- Monthly bookkeeping
Every transaction sorted into categories set up for pawn shops. You never categorize a thing.
- An accountant checks every transaction
Real review, every month, before your books close. Not a spot check.
- Your business tax return, filed
Prepared, reviewed, and signed by that same accountant every year.
- The monthly number
What you made, what you spent, what to set aside for taxes.
- Your own bookkeeper
A real person assigned to your business, in the app whenever you need them. No hold music.
- On your books all year
Every month, not just in April. Your team speaks up whenever something is worth your attention.
- Cancel any time
No contract. No cancellation call. Your books are yours.
Straight answers
Questions pawn shop owners ask first.
I loan out cash against collateral every day. Does that count against my profit?
No. Loan principal is tracked as money the shop expects back, not an expense. Only the interest you collect at redemption counts as income.
How is a forfeited item valued once it becomes inventory?
At exactly what was loaned against it, not a guessed resale price. Real profit only shows up once it actually sells.
I buy some items outright instead of through a loan. Does Gus keep that separate?
Yes. Buy counter inventory stays apart from forfeited loan inventory, so you can see which side of the shop is really driving resale profit.
Does Gus decide loan amounts or appraise items for me?
No. Gus and your bookkeeper only keep the shop's own books, what it makes and spends. Loan decisions and appraisals stay entirely with you.
My redemption rate has been dropping lately. Would Gus catch that?
Yes. It is one of the numbers he tracks every month, so a slipping redemption rate shows up early instead of getting noticed only at tax time.
My books have never separated loan principal from interest income. Can Gus untangle that?
Yes. Send the bank statements and loan records you have, and Gus sorts it out. Most owners can finally see their real profit within a week.
Is a real accountant checking my books?
Yes. You get your own bookkeeper, Gus does the first pass on every transaction, and an accountant checks every one before your month closes. That same accountant prepares, signs, and files your business return. Goatkeeper is not a CPA firm, and we never pretend a person looked when they did not.
What does it cost, and can I cancel?
It starts at $197 a month, depending on what your business needs. No setup fee, no hourly bills, no contract. Cancel any time from the app, and your books go with you.
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What makes a bookkeeper worth paying for Every business we keep books for
Book a call
Pick a time. That's the whole signup.
Fifteen minutes with a real person on our team. They look at where your books are, tell you straight what it takes to get caught up, and get you set up on the spot if it fits.
- $197 a month to start
- An accountant on every transaction
- Cancel whenever