5 Biggest Accounting Mistakes for CPG Businesses

We’ll equip you with the tried-and-tested knowledge to make smarter sales and financial decisions. Stabilize your cash flow and extend your runway with expert foresight that anticipates future needs. In the CPG industry, deductions are adjustments made to a company’s invoiced amount due to factors such as promotional discounts, allowances, and chargebacks. Deductions can be a significant challenge for CPG companies, as they directly impact the bottom line. As your biotech company is getting ready to head through FDA and government trials https://www.bookstime.com/articles/what-is-encumbrance-accounting and certification, you’ll want to work with an experienced CFO who can help you anticipate the costs and possible bottlenecks. Biotech companies bookkeeping and accounting needs are extremely specialized.

Consumer Business Guide to Reporting Trade Spending

Take time to learn the ins and outs of every category of FBA fees and how they apply to your products. You need to familiarize yourself with the different types of charges, including fulfillment, storage, disposal, and returns. Then, understand how each expense applies to your products based on size, weight, and storage duration. Set up a monthly review process as well to check these fees and ensure they’re recorded correctly in your financial statements. With real-time data on sales figures, inventory levels, and cash flow, you can make informed business decisions with confidence. No more waiting for end-of-month reports — you’ll have the information you need readily available to track your progress and identify areas for improvement.

Understand and regularly review FBA fees

Without the right accounting systems in place, even the most popular products can hit a wall, as we have seen in the case of Coca-Cola. When you implement strong accounting practices, your products fly off the shelves and have sustained growth. Financial reporting is necessary for any business, especially when the business has taken a loan or sought investment. The lenders and investors want correct revenue figures, sound financial projections, and a clean balance sheet. In a CPG business, you have to track tangible products and store and sell them.

Inventory and Cost of Goods Sold (COGS) Mismanagement

Let Opals group of experienced team members help with your business strategy, with almost 30 years of comprehensive experience in the CPG and FMCG industry. Another underutilized approach is demand forecasting integration with production scheduling. Too often, brands produce based on past trends, but integrating real-time demand signals into your financial strategy can keep production aligned with market demand. Perhaps you want to adopt more eco-friendly packaging and shipping methods — but these often come with higher price tags. On the one hand, consumers demand sustainable products, and you want to offer them. Finding that balance between sustainability and profitability is something every CPG founder needs to grapple with.

• To tackle this problem, you need good accounting software or a professional service.
• Many traditional lenders don’t fully understand the long payment cycles and cash flow challenges CPG businesses face.
• We help CPG manufacturers optimize inventory management by implementing cost-effective processes, providing guidance on negotiating with suppliers, and identifying opportunities for supply chain consolidation.
• Our extensive network of peers, specialists, and potential suppliers help each other succeed.
• This can include sales tax, income tax, and payroll taxes if you have employees.

• Outsourcing your accounting and financial reporting requirements to Expertise Accelerated allows you to concentrate on expanding your CPG business and delivering exceptional customer service.
• Without clear insight into incoming and outgoing cash flow, it’s easy to lose track of your finances.
• Automated tools can also handle the complex task of inventory valuation to verify the accuracy of your financial statements.
• Today, Propeller’s 250+ full-time professionals on three continents are proud to be considered the premier finance and accounting partner to many of the most iconic emerging companies in every category we specialize in.
• This process involves comparing your bank statements with your accounting system’s records every month.

Together, we’d develop a pricing structure that balances competitive pricing with healthy What is bookkeeping profit margins, helping you stay profitable and competitive. Let’s say you own a craft beer brand facing fluctuating demand during seasonal events. For forecasting, I’d use my database to help you align production schedules with expected demand, reducing waste and optimizing inventory so you don’t end up with surplus stock or stockouts during peak periods.

Cpg Accounting

Finatics has extensive experience supporting CPG businesses, including areas of agribusiness and manufacturing. Our team of sector-specific accountants will help you navigate industry challenges and provide tailored solutions for your accounting needs. Confido offers live accrual exhaustion, for enhanced visibility into trade promotion performance. After the teams cpg accounting 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.