Finance for Craft Spirits | Accounting GL Software & Operational Accounting

The PDF is a slide deck on the topic of accounting GL software and operational accounting in your finance department for a Craft Spirits company.

TCA - Craft Spirits Finance - GL Software and Operational Accounting

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Here is text only outline of the slide deck.

Process and Tools

• The topics of General Ledger (GL) software and operational accounting are part of a larger discussion about your organization’s accounting process and tools.

Topics

• General Ledger (GL) Software

• Paying Vendors

• Other Expense Management

• Invoicing Customers

• Inventory Tracking (including POS for DTC)

** Not covering payroll processing but will in future presentation related to compliance issues.

Accounting (GL) Software

• Small Business Systems

• Relatively low cost and low IT requirements

• Easier to use for accountants with less experience

• Don’t handle inventory accounting well, natively

• Examples (QuickBooks, Xero)

• ERP systems

• Used for operations as well as accounting, creating an easier data flow

• Can automate bringing together data from multiple systems and locations into a central hub

• Reduces accounting hours through automation

• More customizable reporting

• Significant cost increase over small business grade accounting software

• May have more IT requirements

• Usually requires specialized consulting for implementation, maintenance and report writing

Paying Vendors

• Bill payment platforms

• Allow for more automated digital approval process including multiple layers of approval

• Integrate the payment processing with recording the transaction in the accounting software

• Provide a quick digital record with invoice/receipt images that are often quicker and easier to use then accounting software.

• Examples: Bill.com, Melio, Ramp

• Bank payment platforms

• May provide the same level of online execution including sending checks

• May also integrate with accounting software

• May have limited access options and approval capabilities

Other Expense Management

• Expense Management

• Software including phone Apps

• Deployed across employees that will have expense reimbursements or company charge cards

• Streamlines record collection, categorization, explaining, approvals, processing reimbursements

• Integrates with accounting systems

• Examples: expensify, tally, concur, many others…

Invoicing Customers

• Invoices are usually prepared with your accounting system to streamline preparing the invoice for a customer and recording the sale and receivable in the accounting system.

• All conventional small business accounting software has this functionality including customizations.

Inventory Tracking

• Raw materials and work in process is usually a shared responsibility with Production team

• Finished goods in the wholesale distribution channel is often a shared responsibility with Sales team

• Finished goods in the DTC channel is a shared responsibility with tasting room and e-commerce teams

• Raw Material, Packaging and Work in Process

• Production team has “custody.”

• Accounting needs reports from Production on what is incoming, what is in various stages of process and what is outgoing. This information is used in Cost Accounting.

• Best practice is for Production Teams to use software for their operational tracking that also handles TTB compliance and can provide the information needed to Accounting.

• Even with production software, unless using an ERP, getting production data into the Cost Accounting is one of the more manually intensive tasks of the Accounting function.

• Finished Goods for Wholesale

• In the custody of warehouse operators.

• Accounting needs reporting on incoming, quantities on hand and outgoing.

• This data may be useful in verifying sales numbers as well as keeping a record of inventory on hand.

• Finished Goods for Tasting Rooms and E-comm

• And while we’re at it, let’s talk about payment processing

• In Tasting Room and E-comm teams’ custody

• Accounting needs reporting of incoming, on hand and outgoing inventory as well as reporting of the sales and payments processed.

• Conventionally this done with a Point-of-Sale system (POS). Some can integrate with accounting systems, but all should have necessary reporting.