In addition to the chart of accounts and the general ledger, a well-structured taproom-focused brewery needs to maintain accurate financial statements, which can be thought of us summarized reports. For taproom-focused breweries, revenue includes draft beer, packaged beer, growler sales and merchandise. You could make this list https://www.bookstime.com/ as broad or narrow as you like, it all depends on how detailed you want your financial reports to be.

Latest release offers financial guidance for small brewers

One way to do this is by implementing recycling programs to reduce waste and promote sustainability. Breweries can recycle cardboard, glass, aluminum cans, and plastic bottles used in packaging to reduce landfill waste and potentially generate additional revenue through recycling. ​​Breweries can also reduce production costs by sourcing high-quality supplies and ingredients at competitive prices. This strategy may include negotiating with suppliers for better pricing, using local suppliers to reduce transportation costs, and monitoring pricing trends to identify opportunities for cost savings. Industry benchmarks for profit margins vary depending on the size and location of the brewery. However, according to the Brewers Association, the average gross profit margin for craft breweries is around 45%, while the average net profit margin is around 9%.

• But your product isn’t ready yet, or you’ve not been paid by your customers.
• They usually have a line item for festivals expense, which is a great place to acquaint walk-by customers with the company’s beer offerings.
• In other categories, such as point-of-sale (POS) and e-commerce, there is much more diversity in vendor choices.
• Breweries can reduce production costs by increasing efficiency and automation in their brewing processes.
• If so, it collects a refundable deposit on each one, which it pays back when kegs are returned.
• Let’s go back to that purchase order for $3,000 worth of hops from your supplier.

A comprehensive accounting system helps you remain profitable

In exactly the same way, accountants often wake up in cold sweats thinking about small business owners buying materials on their personal credit cards and not being able to find their statements. You’ve nominated a local bookkeeper to help out a day a week, they know what they’re doing so you can leave them to get on with it. If they’re just recording and tracking everything in a library of local Excel spreadsheets, controlled and understood by them – that’s a big risk.

• This is especially relevant if your brewery runs a brewpub or taproom model.
• For most breweries, the numbers are the “uncomfortable unknown.” Owners rely on the local CPA or the jack-of-all-trades, in-house bookkeeper to prepare the financials they use to make the most meaningful decisions in their business.
• Some of the modern marketing tools and social media channels can accelerate your success and help you run some of your marketing on auto pilot.
• In our analysis, we looked at the software that each craft business uses for accounting, point-of-sale (POS), e-commerce, customer relationship management (CRM), internal communication, and overall business management.

Managing your brewery team

Over the past few years we have worked with dozens of clients to help them create affordable, quality lead generation websites. We can provide advice and assistance with your content, video production and search engine optimisation. We’ll make sure your website is responsive to smart phones (click here to check your current website) and we’ll help you https://www.instagram.com/bookstime_inc develop lead magnets and calls to action.

It’s quite possible that a big increase in sales might have a minimal impact on profits, because the sales were through the least profitable distribution channel. 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.

SUBSCRIBE to the Business Accelerator Magazine

• Staying a step ahead of your peers in this rapidly changingenvironment is critical to maintain a competitive advantage and realize longterm success.
• However, it is important to evaluate the costs and benefits of each piece of equipment, considering factors such as maintenance costs, and space requirements before making an investment.
• The firm serves many craft brewers across the country, from startups to large national brands.
• This means having separate accounts for things like kegged beer, packaged beer, growlers, and taproom sales.

What if their laptop crashes or the person leaves your business without warning. In this case from a tech accounting for breweries + standpoint, secure and cloud-based storage is particularly useful for a smaller business. In the past when you’ve been making a new batch of some groundbreaking beer, you’ve probably been struck by inspiration and adjusted the mix mid-brew. If not then you join a big club of other brewers who got caught up in the passion of brewing and forgot for a moment about the business of brewing. Naturally, you want to keep costs to a minimum as you invest in expensive pieces of equipment and maybe even start getting some staff on the payroll. This piece is a selection from a larger e-book titled “Lifting the cask on… brewery accounting” that we wrote for breweries to help them gain a better understanding of the inner workings of brewery accounting.