Accountants for Manufacturing Businesses
Manufacturing Businesses Are Unique
Firstly, keeping track of inventory and raw materials can be extremely complicated. Secondly, costing and valuing the products your company produces can seem impossible if you’re not tracking raw materials and time correctly. Consequently, an accountant with experience dealing with manufacturing businesses is worth their weight in gold.
Here at Accurox, we have experience of preparing accounts and tax returns for manufacturing businesses. Therefore, you simply don’t have to worry about it anymore.
Unpicking the Manufacturing Process
What Happens Next
The first consideration is to ensure that you are tracking everything properly. We will get you started on accounting software that will make this easier than it seems.
These are the areas of focus:
- All transactions, including sales, purchases and loans should be recorded and categorized into the correct ledgers.
- Establish a clear picture of assets and liabilities and any given point in time.
- Clarify the cashflow fluidity
- Inventory tracking
Inventory Tracking & Costing
As you will know inventory tracking is unique to the manufacturing business and extremely complex. You are required to account for every stage of the process, from raw materials and supplies, to partially-manufactured items and finished products in your inventory. However, without stringent tracking on these resources and labour, your costing of the final product could be wildly off the mark. All of which could be stacking up bigger problems to face down the line, particularly if you are underselling.
Inventory Accurox Understands Manufacturing Businesses
At Accurox, we have worked with large and small manufacturing businesses for years and we will bring the skills and knowledge we have acquired to help you find the best solution for you and your business. We work with manufacturing businesses that use or are willing to change over to cloud accounting software. We’ll work with you using an array of costing methods based on what is best suited to your business and finesse things further depending on what areas you want to focus on.
Some of the ways we can look at costing in manufacturing businesses include:
- Job Order. This costing method tracks your labour and raw materials for each job.
- Process costing. This costing will work best if you are running a continuous production process delivering the same product.
- Variable costing is linked to the amount of product that you manufacture.
- Absorption costing combines all the variables, raw materials, labour, and overheads.
Analysing the Data
- Identify the bottlenecks that are slowing the process down. Once isolated, we begin to make plans to ease those constraints and increase both productivity and profit.
- Study your margins to see clearly how much profit you are making on each item you manufacture. Are you wasting time and effort on products that are just not profitable? Should you be expanding on more profitable lines?
- We highlight the variances in your budgets for each job or product. Are your budgets effective, reflecting accurately your real costs of producing it? We will be able to isolate those variances so you can refine your budgets going forward and improve the bottom line.
Inventory Tracking & Costing
You might be feeling a little exhausted by now. However, if you’re still reading these points have probably resonated with you and your experience. It sounds like a lot of work, but you will be amazed at how easy it can really be.
Want to Know More?
Get in touch with us now to start benefiting from experience in businesses like yours. We will guide you away from routes that will waste your time and drain your resources. Leaving you with more time and money.
Contact Us Now and let’s get started!