How Can CPG Accounting Keep Your Products Flying off the Shelves?

Many online bookkeepers fail to correctly identify contract lengths, discounts and more. Based on those deals, you will see deductions occur from accounts receivable payments, sometimes without authorization. Expect your sales reps to acknowledge, review and understand any deductions that come through. With an experienced accounting team on your side, it can be cost-effective because you only pay for the services you need when you need them.

Understand the Big Picture with Trade and Other Deductions

Typically the most common process for reporting accruals, this is defined as a rate per case or percent of revenue that’s ‘earned’ on everything that you sell in the current budget period. The accruals are like deposits in the bank, while deductions for operational issues or trade promotion activities are withdrawals or credit. The main advantage to live accruals is that if sales are coming in lower than expected, sales teams can adjust the budget lower to maintain profitability. Every penny counts, so you need to accurately track product costs, including raw materials, production, and packaging costs. You can price your products more competitively once you have tighter control of your expenses.

Setting up strong CPG accounting foundations

Our expertise covers the full spectrum—from Procure-to-Pay and Order-to-Cash (Quote-to-Sustain) to Record-to-Report and Decision Support—backed by a strong history of successful delivery. Accurate and timely financial statements that comply with industry regulations, such as GAAP and IFRS. However, the facility is outdated due to changes in technology and consumer preferences. In this case, the company must recognize an impairment loss of $20 million on its financial statements. For example, a CPG company produces 10,000 units of a product in January for $5 per unit.

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After the teams involved agree on the proper method to manage accruals, the accounting team must then manage details surrounding revenue recognition for deducted payments. There are several circumstances that require more nuanced accounting processes. CPG accounting isn’t just about crunching numbers; it’s the engine that keeps your business going.

Why Outsource Bookkeeping for Consumer Packaged Goods Companies To Us?

Thus, our CPG accounting services are assured for quality by its US CPA management team, serving as reassurance to clients interested in outsourcing accounting function but having concerns about service quality. In this newsletter you’ll learn about the common mistakes in CPG accounting, how to optimize cash conversion cycles, and the eCommerce triple threat of marketing, inventory, and finance. Demand for consumer packaged goods is relatively steady in good and bad economic times, but this is still a highly competitive sector of the U.S. economy. Virtually every product in the sector has many competing brands, and the switching costs for consumers are low.

Servicing Consumer Packaged Goods (CPG) Accounting

• In terms of disputing deductions, it’s important be both diligent and timely.
• Although CPG makers generally enjoy healthy margins and robust balance sheets, they must continuously fight for shelf space in stores.
• The real value of working with a CPG-focused accountant is the ability to anticipate challenges before they become obstacles by leveraging deep industry knowledge and a network of CPG-savvy contacts.
• Break down blockchain’s complex financial and regulatory framework and ensure compliance with industry regulations.
• In this article, we will explore the world of CPG finance, including the crucial aspect of managing deductions.

Maintain your investment in inventory and working capital at ideal levels with Expertise Accelerated’s support on demand and supply planning. We recently interviewed Chelsea Cohen, co-founder and CEO of SoStocked, who’s mastered this delicate balance. Her leadership led SoStocked to significant growth, culminating in its acquisition by net sales Carbon6.

If a client removes anything from that shared folder it becomes out of our sight and access. In this article, we’ll break down three key ways you can stay ahead of tariff-related challenges. Budgeting for Nonprofits Accounting services are not highly profitable for CPAs, and that’s precisely where our CPA firm clients leverage our services. We transform messy books into investor-grade reporting — so you can scale with confidence and make smarter decisions.

• Your books serve as a window into your business’s financial health, demonstrating your financial strength and transparency to potential backers.
• Our team can handle all your bookkeeping and accounting needs, including accounts payable and receivable, bank reconciliations, and general ledger maintenance.
• Returns and allowances can be estimated based on historical data, industry trends, and estimates of future returns/claims.
• Ensure cash adequacy while meeting operational and strategic commitments with Expertise Accelerated’s support on cash flow projections.
• In this article, we will discuss some of the key accounting considerations for CPG companies.

CPG companies can’t run effective operations without insight into their cash flow. As you now know, the accounting considerations for CPG companies require careful management. Revenue recognition, inventory management and reserves, COGS, returns, and cpg accounting 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.

• When it comes to streamlining your CPG accounting and procurement processes, there are a few key steps that can help make the process more efficient.
• By entrusting your accounting needs to experienced professionals specializing in restaurants, you can focus on what truly matters to your business.
• Kruze’s CFOs, tax CPAs, controllers and bookkeepers have deep expertise in the most important startup industries, from biotech to ecommerce to SaaS and beyond.
• Accurate and timely financial statements that comply with industry regulations, such as GAAP and IFRS.
• With high upfront costs for inventory and demanding production schedules, cash flow is often tricky for CPG brands.

LIFO assumes that the most recent inventory purchased is sold first, while FIFO assumes that the oldest inventory is sold first. CPG companies must select the method that best reflects their business operations and properly disclose this in their financial statements. The Financial Accounting Standards Board (FASB) has issued Accounting Standards Codification (ASC) 606, which provides guidance on revenue recognition for all companies, including CPG companies.