This piece is a selection from a larger e-book titled "Lifting the cask on... brewery accounting" that we wrote for breweries to help them gain a better understanding of the inner workings of brewery accounting. To read more about brewery accounting, please make sure to download and access our full "Lifting the cask on... brewery accounting" ebook here.
Get Accounting Right
Our hats already go off to North American brewers. In Canada alone in 2020, according to Conference Board of Canada figures, 85% of the beer consumed was homegrown. That’s a hell of an achievement for domestic products.
“Breweries typically reach out to CPAs when they are struggling and when they realize they aren't getting what they need from junior bookkeepers."- Samantha Moyer, CPA at Beyond the Pale
So we know that the beer being brewed is high quality but what about the accounting that supports it? Well, in short – it depends. What we can say for certain is that for small breweries – or those that are experiencing growth – there is often a lack of knowledge or tools available to support themselves. There are a host of common blunders that they can be forgiven for making. Maybe you’ll recognize a few of these from your own brewery?
Shoebox accounting. That’s a colloquial term for stashing all your receipts in a shoebox in your back office. It’s ok, when you’re focused on brewing and taking your small homebrew setup into the beginnings of an industrial process you don’t have time to get it done properly. Or at least that’s what you tell yourself.
It’s not just a question of time when you’re starting out but of money. Naturally, you want to keep costs to a minimum as you invest in expensive pieces of equipment and maybe even start getting some staff on the payroll.
The danger of course is that when you should be focusing on the beer, its quality, and marketability, you could get swamped catching up on months- old invoices and receipt consolidation.
“Our MO for using Brew Ninja was first to become more efficient - to save time spent tracking all the moving parts. We wanted good traceability for food safety and for new legislation. I wanted systems that are available to and understood by more than one person. This is felt more because we are small.” - Susan Snelling, Co-Owner at Split Rail Brewery
Remember you’re great at beer, not at accounts. That doesn’t mean you can’t get better but it does mean you’re better off investing in people and systems that are built for it.
In the past when you’ve been making a new batch of some groundbreaking beer, you’ve probably been struck by inspiration and adjusted the mix mid-brew. This is how you create unique and creative beers that build your brand. But did you track those few extra ingredients? If not then you join a big club of other brewers who got caught up in the passion of brewing and forgot for a moment about the business of brewing.
So let's step to the next level of mistake. You’ve nominated a local bookkeeper to help out a day a week, they know what they’re doing so you can leave them to get on with it. If they’re just recording and tracking everything in a library of local Excel spreadsheets, controlled and understood by them – that’s a big risk. What if their laptop crashes or the person leaves your business without warning. In this case from a tech + standpoint, secure and cloud-based storage is particularly useful for a smaller business.
When a tank or keg runs out it needs reconciling. These types of things are the inventory figures that new starters don’t think of because they don’t have the business education to be aware of accounting practices. In exactly the same way, accountants often wake up in cold sweats thinking about small business owners buying materials on their personal credit cards and not being able to find their statements.