15 jul MicroBrewr 031: Accounting solutions for your craft brewery

Beer producers face specific bookkeeping excise tax rates based on production volume. For instance, small producers benefit from reduced rates on their initial production levels. Specific provisions allowed small producers to pay lower rates on the first 100,000 barrels of beer or the first 750,000 gallons of wine, promoting growth in startup and independent craft beverage businesses. The tax reform aimed to equalize the tax burdens between large and small producers, fostering competition and innovation within the industry. For example, some states may tax wine based on alcohol content, whereas others use a flat rate per volume.

Federal and State Regulations on Alcohol Aging

• But, since it’s not that expensive, a lot of breweries just charge it to expense as incurred.
• But when the financial side is neglected, even the best product can struggle to thrive.
• According to Derek, an accurate snapshot of your brewery costs is especially critical on the “cost of goods sold” side, because breweries often buy goods and ingredients in bulk.
• This paperwork tracks all product movement in and out of your bonded area.
• Growing a brewery in today’s world requires this kind of forward looking and thinking, so rely on an brewery CPA to support you in this area.
• The Alcohol and Tobacco Tax and Trade Bureau (TTB) plays a critical role in regulating the craft beverage industry.

Once you have ensured the data is accurate and complete, you’ll use your accounting software to input the financial data into your system and generate a report. Financial reports can be generated for any time period, such as a week, month, quarter, or year. Use your accounting software to generate the report by selecting the type of report, date range, and any other relevant parameters. Craft beverage companies often deal with refunds and credits, especially if they export products.

These are just a few of our services. Learn more by scheduling a consultation with an expert.

We can assist with ensuring your payroll is set up correctly and help integrate your payroll https://www.bookstime.com/articles/amortization transactions with your accounting system. The all-in-one brewery software manages your process, from raw materials to finished goods. As for the costing system used, production is usually valued with either a standard costing or average costing system. And for a smaller brewery with not much accounting support, it may use a modified system that’s really simple. In short, ending raw materials are valued at their most recent purchase costs, while work in process and finished goods are valued using a standard cost. In the context of a brewery, this could involve reconciling accounts related to sales, expenses, and inventory.

Time is money. Find out how Ekos can save you both.

• Insurance is another vital aspect, providing protection against risks such as product contamination, equipment damage, and liability claims.
• And finally, regular oversight over financial reports will help ensure information is being tracked accurately, so businesses can make informed decisions regarding their operations.
• Use your accounting software to generate the report by selecting the type of report, date range, and any other relevant parameters.
• Understanding import duties and negotiating favorable terms can mitigate cost increases.
• These best practices are summarized into a handy checklistof month end procedures to follow.

Alternatively, you mayhave any number of different sales accounts to show sales by market and packagetype. For example, Sales Self-Distribution Kegs, Sales Self-Distribution Cans,Sales Self-Distribution Kegs, etc. By supplying my contact information, I authorize Ekos to contact me with personalized communications about Ekos’s products and services. This KPI has to do with how much you are paying for labor per barrel you produce. Because labor is so expensive, it’s important to see if you’re getting your money’s worth. If not, you may need to reevaluate the number of team members working or how you’re pricing your alcohol.

Principles of Aging in Breweries, Distilleries, and Wineries

• Our team of brewery consultants, accountants, tax specialists and industry experts are here to help breweries like yours grow, profit, and thrive.
• Accurate and reliable bookkeeping for breweries or distilleries tailored to keep your business organized, compliant, and profitable.
• With QuickBooks, alcohol producers gain clarity into sales trends, cash flow, profit margins and more to inform strategic decisions.
• We can inform you about where your finances and company health stand compared to other breweries by looking at and analyzing your gross margins.
• Effective cost tracking, allocation, and optimization are vital for maintaining profitability and operational efficiency.
• If you transfer beer from the brewery to the taproom at cost, then the taproom is going to report massive profits, while the brewery doesn’t get to report any profits at all.

These practices not only enhance the flavor profile of beverages but also add significant value to the business operations and consumer perception. For wineries, aging processes can influence tax rates due to changes in alcohol content over time. Breweries, especially those producing barrel-aged beers, must account for variations in volume and proof, impacting their overall tax liabilities. Advanced inventory management systems can automate much of this tracking, providing real-time data and analytics on stock levels and conditions.

Business Tax Preparation and Filing

Business credit card purchases, corporate expense documents, and accounts payable invoices can all be put through Dext Prepare. The program also issues Records of Employment and employee T4s, and can push the payroll information directly into your QBO file. It is imperative to stay on top of your payables to build a good relationship with your suppliers and maximize any discounts available. Track your costs and look at your purchasing trends for each vendor to see which expenses are growing and use this data to aid in your negotiations. As your brewery and production levels grow, you can build relationships with your suppliers to negotiate better terms. These terms could mean better pricing for more extensive bulk purchases or discounts for early payments.

Craft Beverage

These costs must be classified accounting for breweries correctly to ensure accurate financial reporting and inventory management. The craft beverage industry in America is rapidly expanding, with many new breweries, distilleries and wineries starting production across the country each year. With the industry’s growth and evolution, new challenges continue to arise.

Tax and Insurance Considerations

Optimize brewery planning processes with our comprehensive guide covering inventory management, quality control, and scheduling best practices. As far as a timeline goes, your first meeting should be with your leadership team. Brewery management software like Ekos is excellent for inventory management.