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Accountants for Manufacturers

 

If your business creates and sells products, you can benefit from a good accounting system. Manufacturing businesses have special accounting requirements and here’s a guide for you.

Manufacturing is not like other businesses. While service companies offer their time and retailers sell inventory, manufacturers make their products from scratch. Because of this, you may encounter accounting problems.

Manufacturing businesses must account for raw materials, processing costs and the value of their finished products.

There are several ways to do this. You need to choose the right method for your business and use it correctly. Here are the methods you can use and some benefits or potential problems you may face in your operations. Choose the right accounting system to grow your manufacturing business.

Get the right accounting packages for your business

All manufacturing companies, big or small, must track their accounts and use the right accounting software. There are many packages available so look at each one and find the best one for you. Your manufacturing accounting system will likely be part of your business for a long time so choose wisely.

Find out what other manufacturing businesses are using and choose an accounting software or accounting firm with input and reviews from manufacturers so you know they can handle your business needs. Make sure your system is scalable because you are starting small but you will grow so go for an accounting software and accounting firm that will grow with you. Cloud-based accounting software costs less and lets you access your accounts anytime, anywhere.

Accountant for Manufacturing Companies

 

Once you have chosen the most suitable software for you, decide how you will use it and work out what accounting methods are best for your business. Discuss your options with your accountant or financial adviser.

The job order costing method is typically used for batch manufacturing, not product tracking. It calculates by recording raw material units and labour hours required for each batch. The process costing method is useful when running a production line and manufacturing products and parts continuously. Costs are calculated by department, not by job. Activity-based costing is used when you fine-tune and improve a manufacturing process and is tied to other activities like customer service. Activity-based time-driven costing is a variation that accounts for costs over a certain period.

Variable costing operates the same way as overhead costs but it varies with production output so the more products are made, the higher the costs are. Absorption costing is used when product cost includes all fixed and variable manufacturing costs such as labour costs, factory overhead and raw materials. Other costing methods include actual costing, standard costing, resource consumption accounting and weighted average costing. These may confuse you now but it will make sense when you start using it with the help of your accountant. You may use different methods for different departments.

Accountant for Manufacturing Companies

Once you have the right accounting system and accounting methods in place, you can track valuable business data. It’s good to track your transactions, including expenses and revenues in a given period. This includes sales, purchases, loans, repayments, among others. Categorise them under expenses, accounts receivable, accounts payable, etc.

You should also track your assets and liabilities at the end of each accounting period. You need to watch your cash flow and cash in the bank and track inventory with your accountant or financial adviser. This involves cash method, accrual method for taxes, last in and first out, first in and first out and inventory flow tracking. You want to track all these online and a cloud-based software allows you to do this even with paper trail if necessary.

Once your accounting processes are set up, you can track your financials and analyse your manufacturing process to improve it. You can find out how efficient your business processes are and make changes to run it better. You can do a cost analysis to see what you are spending on and how input price changes impact your product costs and profit. Use the constraint analysis to identify bottlenecks and see where the business is being held back, such as slow parts of the manufacturing process. Widen these bottlenecks and increase production speed.

You can also do a margin analysis or profitability analysis to find out how much profit you are earning on each product, distribution channel, customer or product line, etc. Variance analysis shows you how much you budgeted and actually spent. It finds the difference and helps you work out where it comes from. You can use the abovementioned methods of analysis to refine your budget for the next accounting period.

Accounting for manufacturing is more than recording numbers because with the right manufacturing accounting software and accounting firm, you can get a new perspective of your business. Use it as a tool to analyse and refine your business processes.

Accountant for Manufacturing Companies

Your expertise may be in manufacturing so don’t be afraid to ask an accountant for help. An experienced accountant or financial professional understands manufacturing and business in general. With the right accounting system and accounting firm for your manufacturing business, you can optimise processes, identify the most profitable product lines and improve your budget to help your business grow.

Sky Accountants understand that many manufacturers in Australia are small, family-owned businesses that have less than 10 employees. Less than 10% of the total Australian employment is in manufacturing.

The manufacturing sector in Australia has been declining over the years because of high raw material and labour costs, remote location and small production runs that make it hard to compete globally. However, some manufacturers still thrive despite globalisation, high local currency and diminishing scale in different industries.   

Sky Accountants understand that many manufacturers in Australia are small, family-owned businesses that have less than 10 employees. Less than 10% of the total Australian employment is in manufacturing.

The manufacturing sector in Australia has been declining over the years because of high raw material and labour costs, remote location and small production runs that make it hard to compete globally. However, some manufacturers still thrive despite globalisation, high local currency and diminishing scale in different industries.

Accountant for Manufacturing Companies

There are many opportunities with niche products so innovative manufacturers can use cutting edge designs and innovative processes and marketing to be successful. There are many opportunities for electronics, textiles, machine tools, plastics, trucks and food.

However, manufacturers face unique challenges like managing pending assemblies and builds, tracking customer orders, managing inventory and costs and identifying orders that have shipped. Those who export finished goods or import components also need to face dollar volatility. Sky Accountants have worked through these stages with manufacturers.

Have an accountant who understands manufacturers so they can give you a solid competitive edge. We offer accountingbusiness coaching and tax services to support and grow your manufacturing business. We can help you with pricing, job costing, break even analysis and management accounting services. We can use industry benchmarks to compare your business performance with and assess what is working in your manufacturing business and which areas need more work on.

Manufacturers are one of our client groups and we have mentored them through the start-up stage of their business. If you are starting a manufacturing business or buying an existing operation, you need to consider several issues including tax registrationsbusiness structureinsuranceaccounting software, vehicle and finance options. As business advisers and accountants, we will assist you in all of these including payroll, business plan and cash flow budget, among others.

Accountant for Manufacturing Companies

You need solid foundation when starting a business. Your business structure is important – you can choose from sole traderpartnershipcompany and trust business structures. Start with the end in mind when selecting the most suitable tax structure for your business.

Australian tax laws are complicated and ever changing so your changing your business structure can be costly. We consider income tax minimisationasset protection, admission of new business partners or investors, compliance with legal requirements in your industry, risks and tax concessions.

Accounting software is also important. You need accurate and up to date financial records so you can make informed business decisions. The wrong accounting software can be frustrating and can waste money and time. Record keeping is also important and unique in your manufacturing business so we avoid computerised shoebox records and additional fees and help you reduce costs and time associated with compliance and bookkeeping.

As your accountant and business adviser, we can help you navigate through cloud-based solutions such as MYOBXero and QuickBooks. We can give you support and valuable advice in real time, anytime anywhere. You simply log in to your device. Your data is backed up automatically and you don’t need to worry about program updates or installations.

Accountant for Manufacturing Companies

To start a business, you need professional software and advice, information technology, marketing, equipment and leasehold fit out, insurance and vehicles. From these costs, we can build a cash flow budget and produce profit and loss statements that can help you secure funding and through business registrations, insurance, legal issues, branding, etc.

Vehicles are important for manufacturers. We can help you claim your vehicle expenses and distinguish between a business and private trip. We can also assist with vehicle finance like chattel mortgage, CHP or lease and get you fleet pricing on your new light commercial van, ute or car. We have the tools and resources to help you start. We can do financial modelling on various price pints and produce profit forecasts.

Manufacturers also rely on referrals and reputation to grow their business. We can mentor you and help you understand how to grow your manufacturing business by identifying profit drivers in your business. We can implement profit improvement strategies and make sure you don’t leave any profit on the table.

We offer business advice for manufacturers, advice on the purchase or sale of your business, tools, business structuretax concessions, business registrations, business plans, profit projections, cashflow forecasts, accounting software, preparation and analysis of financial statementsbookkeeping and payroll servicestax planning, marketing advice, wealth creation and financial planning, KPI management and industry benckmarking, business succession, vehicle and equipment, finance, insurance and a whole lot more.

Already operating or considering starting a manufacturing business?

Your manufacturing business can benefit from an accountant who understands your business. Manufacturers in Australia face challenges such as high labour costs, inventory management, tracking customer orders, managing builds and assemblies and shipment. Importers and exporters also face the volatility of the dollar and in particular with the increased competition from India and China.

Sky Accountants

Our goal is to empower you to become a better, more finance-focused and well-rounded entrepreneur. Contact us at info@skyacc.com.au or 1300 328 855

Sky Accountants have helped plenty of manufacturers through the different stages of their business cycle, providing them with tax, accounting, bookkeeping and business mentoring services. We can assist you with pricing, job costing, management accounting and break even analysis. We use industry benchmarks to identify the strong and weak points of your business.

Do you want to start a manufacturing business? Manufacturing is one of our industry niches and we can help you start or buy an existing business by assisting you with your business structure, tax registration, tools, insurance, software, vehicle and finance. We can also provide bookkeeping and payroll services. Successful manufacturers have efficient administration and production processes, effective supply chains and an ability to innovate. As a manufacturer, you need an adviser that understands your industry.

Accounting for Manufacturers

Sky Accountants have the industry knowledge to develop strategies for your operations and provide guidance in tax, accounting and audit compliance, KPIs and benchmarking analysis, management accounting, budgets and cash flow forecasting, financing, increasing capital, business valuations, mergers and acquisitions, domestic and export markets and research and development tax advice.

Accounting for Manufacturing Business

Sky Accountants have the industry knowledge to develop strategies for your operations and provide guidance in tax, accounting and audit compliance, KPIs and benchmarking analysis, management accounting, budgets and cash flow forecasting, financing, increasing capital, business valuations, mergers and acquisitions, domestic and export markets and research and development tax advice.

Accountants for the Manufacturing Industry

As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.

You can click here to speak to a businessaccounting and bookkeeping firm. We also offer hospitality business consultation and mortgage services. We will give you a call to know more about your needs. We will explain to you how we can improve your business.

We would love to help you formulate investment strategies and streamline your processes to take your business to the next level.  Our goal is to help you grow your business, find ways to invest more and increase your productivity.

Email Address: info@skyacc.com.au

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Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia

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Sunbury Office Address: Suite 13, 33-35 Macedon Street, Sunbury, Victoria 3429,
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Gisborne Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Gisborne Victoria 3437

 

Phone: 1300 328 855
Phone: 03 97444522

 

 

 

 

Contact Us

1300 328 855

902 Howitt Street, Wendouree, VIC

info@skyacc.com.au

1300 328 855

45 Hamilton Street,
Gisborne VIC

info@skyacc.com.au