Accounting plays a vital role in the operation of any manufacturing company. By utilizing these accounting for manufacturing tips, you can keep track of your finances and make your life easier at the end of each financial quarter.

You can also contact Odini Partners, LLC, to get direct help from accounting experts. Our team can help break down common accounting myths for you. Speak with a member of our team today at (312) 440-0960.

#1: Get Familiar with Accounting Terms

When it comes to accounting for manufacturing, you need to know all the lingo to manage your business properly. Several accounting terms will likely come up a lot as you operate a manufacturing company, including:

Cost of Goods Sold (COGS)

COGS deals with how much it costs to create the products that your company sells. You need to factor in labor and material costs for each product off the production line into the COGS.

Cost Of Goods Manufactured (COGM)

You look at the COGM to see the value of the inventory your manufacturing company created during a set amount of time.

Inventory Valuation

Accountants look at inventory valuation to view the cost of your inventory when a reporting period ends. Inventory valuation plays a role in calculating COGS. An

#2: Set Up Multiple Accounts

You should set up more than one bank account if you operate a manufacturing business. At the very least, you need to have an account for your personal use and one for your business. However, the experts generally recommend having multiple corporate accounts as well.

Companies with multiple accounts often have an easier time keeping their finances organized. You can regularly review the balance sheet for each account, ensuring that you understand what’s going on with your finances.

You can also rely on an accountant to help you keep track of the funds in all of your business accounts.

#3: Work with Accounting Specialists

You don’t have to handle the accounting needs for your manufacturing business on your own. Many manufacturing companies choose to hire an outsourcing company. The benefits of working with accountants include:

• Allowing someone else to take care of complex data functions
• Lowering business costs by avoiding an in-house accounting department
• Getting access to multiple services

Depending upon the accounting specialist team you hire, you could get services that help with:

• Ensuring compliance with all financial rules
• Supply chain management
• Finance and accounting
• Reporting
• Analytics

Working with an accounting firm allows you to keep your focus on the operation of your manufacturing business. You can put your energy into developing and producing the products that your customers want.

Review More Accounting Tips for Your Business

Do you want to learn more about accounting for manufacturing? Our team of manufacturing accountants in Chicago can help answer your questions and provide you with the accounting services you want for your business. Learn more now by calling Odini Partners, LLC, at (312) 440-0960.