Manufacturers
Inventory accounting and product costing for manufacturers. We track materials through production so you know true costs and can price accurately.
The Industry
Manufacturing businesses carry money in three forms before any cash comes back: raw materials sitting in the warehouse, work in progress on the production floor, and finished goods waiting to ship. Add equipment and machinery to the picture and you have significant capital tied up in assets that need careful accounting treatment.
The timing works against you. You buy steel or ingredients from suppliers and may need to pay within 30 days. You pay production labor every week or two. The customer might not receive an invoice until the product ships, then you wait another 30 or 60 days for payment. A profitable production run can still create cash stress because the money flows out long before it flows back in.
Who This Covers
Who This Covers
Metal fabrication shops, food production facilities, packaging companies, custom manufacturers. Any business in the Houston area that transforms raw materials into finished products through a production process.
What Makes It Complex
What Makes It Complex
Inventory valuation across production stages. Cost of goods sold calculations that include materials, labor, and overhead. Equipment depreciation on machinery that costs hundreds of thousands of dollars. Scrap and waste tracking. Cash flow timing that doesn’t align with profitability on paper.
What We Handle
Inventory accounting for manufacturers requires tracking materials from the moment they arrive through every production stage until finished goods ship out. We set up systems that capture the true cost of production including direct materials, direct labor, and allocated overhead. This gives you accurate cost of goods sold on your financial statements and real numbers for pricing decisions.
QuickBooks needs manufacturing-specific configuration to be useful. A standard service business setup won’t capture production costing properly. We configure inventory tracking with appropriate cost methods, set up accounts that separate raw materials from work in progress and finished goods, and build reports that show meaningful production costs rather than generic expense totals.
Inventory and Production Costing
Inventory and Production Costing
Raw materials tracked from purchase. Labor hours allocated to production. Overhead distributed across products based on appropriate drivers. Work in progress valued at each month end. Finished goods costed accurately so you know what each product actually costs to make and can price accordingly.
Equipment and Tax Planning
Equipment and Tax Planning
Machinery and equipment depreciated properly on your books. Section 179 elections and bonus depreciation evaluated each year for equipment purchases. Tax returns prepared with manufacturing deductions captured. Quarterly estimates calculated based on your actual cash flow patterns rather than last year’s numbers.
Common Problems
Manufacturers who don’t track inventory accurately end up with financial statements that don’t reflect reality. Physical counts don’t match the books. Cost of goods sold is calculated wrong. Gross margins look better or worse than they actually are. When you need financing for equipment or expansion, the bank sees numbers that aren’t reliable and asks questions you can’t answer.
Product pricing based on material cost alone misses the full picture. A fabrication job that looks profitable when you consider only the steel might lose money once you factor in machine time, setup costs, quality inspection labor, and facility overhead. Without true product costing, you take orders on products that drain money and don’t realize it until you wonder why the bank account isn’t growing.
Inventory That Doesn't Reconcile
Inventory That Doesn't Reconcile
Physical counts that don’t match what the books say you have. Materials that went somewhere in production but didn’t end up in finished goods. Scrap and waste not tracked so you can’t see patterns or measure improvement. Finished goods sitting on shelves for months without movement tying up cash.
Cash Trapped in the Cycle
Cash Trapped in the Cycle
Material purchases and production labor paid weeks before you invoice the customer. Inventory building up faster than it moves out. Supplier payment terms that don’t align with customer payment cycles. Growth requiring more working capital than profits can fund because the timing gap keeps widening.
What Changes
Product costing shows actual profitability by product line and job type. You know which items generate healthy margins and which ones barely break even after overhead. Pricing decisions get based on real production costs instead of estimates or gut feel. You stop quoting work that loses money without realizing it.
Inventory becomes visible and reliable. You know what you have on hand, what it cost, and how quickly it moves. Financial statements reflect accurate values that hold up to scrutiny from lenders or potential buyers. Cash flow becomes more predictable because you understand how the production cycle affects your bank balance and can plan around it.
Pricing Based on Real Costs
Pricing Based on Real Costs
True product costs that include overhead allocation and production labor. Margin analysis by product line showing what actually makes money. Confidence to adjust prices or discontinue items that drain resources. Quotes for new work based on historical cost data from similar jobs rather than hopeful estimates.
Financial Statements That Work
Financial Statements That Work
Accurate inventory values on your balance sheet that match physical reality. Cost of goods sold calculated correctly so gross margin means something. Equipment depreciation capturing available tax deductions. Reports that answer questions from bankers, partners, or anyone else who needs to understand the business financially.
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The Next Step:
A Quick Conversation
Tell us about your business and what you need help with. We'll listen, ask a few questions, and give you a straightforward quote.