Manufacturers
Raw materials on the shelf, half-finished product on the floor, finished goods waiting to ship. Every stage has a cost, and most small manufacturers are guessing.
The Industry
Manufacturing starts with buying raw materials and ends with shipping a finished product. In between, there’s labor, machine time, waste, and overhead. At any given moment you have money sitting in three places. Raw materials on the shelf waiting to be used. Partially completed products on the production floor. Finished goods ready to ship. Each stage carries a cost, and most small manufacturers in the Tampa Bay area aren’t tracking those costs at each stage. They know what they spent in total but not what it actually cost to produce a specific product or fill a specific order.
Then there’s the cash flow problem. You buy materials weeks or months before you ship product. Your employees need to be paid every pay period regardless of whether customers have paid their invoices. A $200,000 month in sales can leave you scrambling for cash because $70,000 is tied up in inventory and another $80,000 is sitting in receivables. The income statement says you’re profitable. The bank account disagrees. Without proper inventory accounting and cash flow management, you’re running the business based on how the checking account looks today.
Who This Covers
Who This Covers
Metal fabrication shops, food producers, packaging companies, custom manufacturers, assembly operations, and small production facilities across the Tampa Bay area. Any business that transforms raw materials into a finished product and needs to track the costs involved.
What Makes It Complex
What Makes It Complex
Inventory at multiple stages of production. Cost of goods sold that depends on accurate tracking of materials, labor, and overhead. Equipment that costs hundreds of thousands to buy and maintain. Payroll with overtime for production workers. Cash flow timing that doesn’t match when you recognize revenue. Waste and scrap that eat into margins if nobody is watching.
What We Handle
Inventory accounting is the foundation. Raw materials tracked from purchase to production. Work-in-progress valued properly so your financial statements reflect what’s actually happening on the floor. Finished goods costed accurately so you know the true margin on every product you sell. Cost of goods sold calculated from actual production data, not just what you happened to spend on materials that month. This is the difference between financial statements that mean something and numbers that mislead you.
Beyond inventory, manufacturers deal with equipment depreciation on expensive machinery, payroll for production staff with varying rates and overtime, and tax situations where the right strategy around equipment purchases and inventory methods can save real money. QuickBooks needs to be set up specifically for manufacturing or the reports won’t help you make decisions. We configure the system, maintain it monthly, and make sure your tax returns are prepared by someone who understands how manufacturing businesses actually work.
Inventory and Production Cost Tracking
Inventory and Production Cost Tracking
Raw materials, work-in-progress, and finished goods tracked separately. Cost of goods sold tied to actual production. QuickBooks configured for manufacturing with inventory tracking and job costing for custom orders. Monthly reporting that shows true product margins so you can see which product lines make money and which ones don’t.
Payroll, Equipment, and Tax Strategy
Payroll, Equipment, and Tax Strategy
Production payroll with overtime calculated correctly. Equipment depreciation using the approach that makes the most sense for your tax situation, whether that’s Section 179, bonus depreciation, or standard schedules. Tax returns prepared with full understanding of inventory methods and manufacturing-specific deductions. Quarterly estimates that prevent April from turning into a crisis.
Where the Numbers Break Down
The most common problem we see with small manufacturers is materials getting expensed when purchased instead of tracked through production. You buy $18,000 in steel in March and expense it all immediately, even though half of it is still sitting in the warehouse in April. March looks unprofitable and April looks great, but neither month reflects reality. Product pricing gets based on rough estimates because nobody has calculated what a production run actually costs once you include labor, scrap, machine time, and allocated overhead. You think margins are 30% but they’re actually 18% on your highest-volume product.
Equipment decisions get made without understanding the tax implications. A $150,000 piece of equipment bought this year could be handled several different ways for tax purposes. The wrong approach costs you thousands in unnecessary liability or missed savings. Meanwhile, nobody tracks which machines need the most maintenance, so you can’t tell whether it makes more sense to keep repairing or to replace. And cash flow forecasting doesn’t exist, so every large material purchase or equipment repair becomes a stressful scramble to figure out whether you can cover payroll next week.
Inventory Misstated, Margins Unknown
Inventory Misstated, Margins Unknown
Materials expensed at purchase instead of tracked through production stages. No work-in-progress accounting, so partially completed jobs don’t show up on the balance sheet. Product pricing based on gut feel instead of actual production costs. Financial statements that don’t reflect what inventory is really worth or what products actually cost to make.
Cash Flow Surprises and Missed Deductions
Cash Flow Surprises and Missed Deductions
No forecasting around material purchases, production cycles, or collection timing. Equipment depreciation handled generically instead of strategically. Tax returns that miss manufacturing-specific deductions or use the wrong inventory valuation method. Quarterly estimates based on last year instead of current production volume and revenue patterns.
What Changes
Every product has a real, verified cost. Raw materials tracked from the moment they arrive to the moment the finished product ships. Work-in-progress valued accurately so your balance sheet tells the truth about what’s on the production floor. Waste and scrap accounted for and monitored so you can spot when material loss starts eating into your margins. You price products with confidence because you know what they actually cost to produce, not what you think they cost.
Cash flow gets forecasted based on production schedules, material needs, and collection timing. Equipment purchases planned with tax implications considered up front. Payroll runs smoothly without taking up your time. Monthly financial statements closed and delivered that actually reflect how the business is performing. Tax returns prepared by someone who understands inventory accounting, manufacturing overhead, and the deductions available to production businesses. You run the shop floor. We handle the numbers.
Product Costs You Can Trust
Product Costs You Can Trust
Actual production costs tracked by product or job. Inventory valued correctly at every stage. Waste monitored and factored into pricing decisions. Financial statements that give you a real picture of profitability by product line. You stop guessing at margins and start making pricing decisions based on what the numbers actually say.
Financial Clarity and Tax Savings
Financial Clarity and Tax Savings
Monthly financials that reflect real performance instead of numbers distorted by purchase timing. Cash flow forecasting tied to production and collection cycles. Equipment depreciation optimized for your tax situation. Payroll handled without eating into production time. Tax returns that capture every deduction your manufacturing business is entitled to.
Tampa Bay's Small Business CPA Firm
First Step:
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