The PDF is a slide deck on the topic of budgeting your finance department for a Craft Spirits company.
Here is text only outline of the slide deck.
Size = Budget
How much of the “wants” you address necessarily are constrained by budget.
Accounting costs $$$. Shortage of accountants before the great resignation.
Budget approximately 3% of the business “size,” until hit scale (around 20M).
Measure size by sales if funded by operations.
Measure size by “burn rate” if venture backed.
Size = Budget Example 1
Assume size is $1M business
Budget approximately $30-40K per year for accounting
Doesn’t leave room for much beyond meeting “Level 1” (basic) needs
No one in-house dedicated to accounting
Probably use outside experts to help setup process
Size = Budget Example 2
Assume size is $3M business
Budget approximately $90-110K per year for accounting
May have an in-house person dedicated to accounting or use an outsourcing firm for greater breadth of experience
Start to address “Level 2” wants
Size = Budget Example 3
Assume size is $5M
Budget approximately $150 -$170K annual for accounting function
Have some amount of regular expertise on the team or use outsourcing firm
Should be addressing most Level 2 wants, with some constraints on management reporting
You know that “one offs” can be costly in time, focus and $$ operationally.
Ex. “let’s do an export deal, just this once.”
You know that spreading yourself too thin costs time, focus and $$.
Ex. “Let’s sell in every state we can get distribution, open the maximum number of tasting rooms permitted by law, do e-commerce, ect…”
You weight the benefits of those actions against their costs.
Don’t forget to consider the costs of Accounting and Compliance.
Don’t build an Accounting process for a $10M business when you are $1-5M business.
Ex. Complex ERP systems, excised management/department level reporting, over staffing at the clerical level