We specialize in executing business transformations, driving improved business operations, helping carve–outs become self-sufficient and creating platforms for roll-ups. A customer orders a given quantity of product using master case as the unit of measure (UOM), but you ship the product on a mixed pallet. The customer checks the item in to their warehouse as a different UOM, which results in a “shortage” of product received. However, because of production constraints, you are unable to fulfill the whole order. Shorting the distributor PO during a deal period will result in an audit deduction in one to two years for the difference you could not fulfill. Encourage collaboration by clearly identifying and explaining each cross-functional department’s role in the success of the business and explain why it matters.
Let CPG Expert Accounting Support Help You Achieve Financial Efficiency
- If your revenue gets cut in half overnight, so do your product sold and shipping costs, and you can pull down your marketing expense with relative ease – all proportionally.
- Keep in mind, this document is not as helpful for managing the weekly cashflow needs for your business.
- Outsourcing your accounting and financial reporting requirements to Expertise Accelerated allows you to concentrate on expanding your CPG business and delivering exceptional customer service.
- With real-time data on sales figures, inventory levels, and cash flow, you can make informed business decisions with confidence.
- Lumping together trade spend will cause challenges for your business from a forecasting perspective especially when reflecting on historicals.
- With plans interconnected, you can instantaneously see the ripple effect of a change, and the impact on production KPIs, margins, and profitability.
Remove the $3,000 in marketing costs, and your gross profit margin increases to 53%. Based on years of experience nDepth Consulting has built a 3-phase, 9 step model to provide the services high-growth CPG brands need – from cleanup and organization to investor confidence and strategic growth support. A handful of expenses fit between gross revenue and net revenue on the income statement. These expenses are related to discounts between the product manufacturer and the retailer that are used to impact sales to the end customer. Given that inventory challenges are prevalent in the CPG / Food & Beverage industries, our hands-on approach includes thorough site evaluations to identify and eliminate inefficiencies. By streamlining inventory management, we Online Bookkeeping help you maintain the ideal stock levels, crucial for managing perishable goods effectively.
Financial Statement Preparation
This activity can be extremely time-consuming and may include filtering hundreds of line items to extract meaningful financial intelligence for sales and finance teams. The validation process ensures that all deductions are legitimately based on agreed-upon trade deals and terms with customers. But for this process to work, you need to make sure everyone in your organization is playing their part.
Cost Optimization and Profitability Analysis
- Any issues can be resolved with others throughout the organization, and cleanup can happen over time.
- In this case, the company must recognize an impairment loss of $20 million on its financial statements.
- For startups, this reality means planning is essential, especially when navigating these hurdles with limited resources.
- These are the questions that will guide the business to its next great products with an accurate cost profile as part of the new product business case.
- We offer specialized tax planning and compliance services designed for CPG manufacturers.
- Retailers recognize consideration received for slotting fees as a reduction of cost of goods sold.
That’s why we’ve dedicated ourselves to helping Kansas business owners just like you create the kind of business that makes life better, not harder. Your business success should create lasting security for you and your family. We help you transform today’s hard work into tomorrow’s legacy, ensuring your wealth works as hard as you do to protect what you’ve built. Whether you’re planning to pass it to the next generation, sell to your employees, or transition to new owners, we help you create and execute a plan that honors your life’s work. From hiring your first employee to managing a growing workforce, we help you create the kind of workplace where people want to stay and grow with you. We believe in building long-term partnerships that cut through the complexity, seize the right opportunities, and build lasting prosperity – for your business and your family.
Fractional CFO Services
While not required for certain types of companies, standardizing the reporting merely allows for credibility within your organization. Keeping a close eye on your P&L lets you know whether you’re actually making money. For CPG companies, revenue recognition will be dictated how is sales tax calculated by the shipping terms (i.e., FOB shipping destination or FOB shipping point). The bill, released Thursday, would block textiles and apparel from being imported through what is known as the de minimis provision. It also would establish a fee of $2 per shipment for goods that aren’t banned from entering via this route.
- From FDA labeling requirements for ingredient disclosures and health claims to food safety regulations like the Food Safety Modernization Act, CPG businesses face strict compliance rules.
- We want you to understand why we collect your contact information, how your information may be used, and how we manage it.
- Your business success should create lasting security for you and your family.
- For a plant-based food company, I’d bolster your pricing strategy by analyzing competitor pricing and customer preferences.
- Consumer packaged goods are products used daily by consumers that must be replaced frequently.
The Value of Industry-Specific Financial Insights
Accurate bookkeeping isn’t only about compliance or record-keeping — it’s a powerful tool for strategic decision-making. Let’s talk about all the ways we can support your goals and not only help you overcome the challenges and obstacles of retail but help your business thrive. We’ll equip you with the tried-and-tested knowledge to make smarter sales and financial decisions. The CPG industry is witnessing massive change in many aspects (do you know many CPG companies are increasingly going digital this year?). Whether you’re a seasoned veteran or a newcomer, navigating these waters can be challenging.
As you now know, the accounting considerations for CPG companies require careful management. Revenue recognition, inventory management and reserves, COGS, returns, and tax considerations are all important factors that CPG companies must consider. By carefully managing these factors, CPG companies can maintain profitability and succeed in a highly competitive market. Finatics has extensive experience supporting CPG businesses, including areas of agribusiness and manufacturing. Our team of sector-specific accountants will help you navigate industry challenges and provide tailored solutions for your accounting needs. Accounting for beverage brands isn’t just about balancing the books — it’s about understanding the unique financial challenges that come with scaling a physical product business.
Analyzing sales trends and operational costs empowers us to identify the best markets to enter and adjust your supply chain strategy to minimize costs and increase your reach. If you had a niche snack brand with multiple product lines, a CPG expert might approach product line profitability analysis by diving into the data to uncover which cpg accounting SKUs are truly profitable. For example, you might find a top-selling item has lower profit margins due to higher packaging costs. In this case, you can work on renegotiating supplier contracts and focusing resources on products with stronger margins.