Your Chief Financial Officer and team of accounting experts will analyze your business performance and work with you to strategize for the future. You’ll receive everything in the Bookkeeping Services package, plus industry-specific solutions that will help streamline operations and provide greater insight into your financial performance. In fact, during tough economic times, consumers may spend more rather than less on consumer packaged goods.

How Vividly Helps Quinn Snacks Be More Strategic About Trade Spend

It also inspires confidence and trust in investors, making your brand a more attractive proposition. Accurate and organized financial records are essential if you intend to attract investors or secure financing for your CPG brand at some point. Your books serve as a window into your business’s financial health, demonstrating your financial strength and transparency to potential backers.

• But for this process to work, you need to make sure everyone in your organization is playing their part.
• Navigating the complex world of CPG regulations is another area where a specialized accountant can save you headaches — and money.
• Eliminating unnecessary expenses helps you optimize expenditures, and maximizing profits boosts your net income.
• Failing to update the value of each SKU and not employing dedicated inventory management solutions can lead to inefficiencies and unnecessary costs.
• Accurate bookkeeping isn’t only about compliance or record-keeping — it’s a powerful tool for strategic decision-making.
• Tap into our extensive collection of SOPs, guides and advice for CPG founders, leaders, and managers.Need an industry introduction?

Understand the Big Picture with Trade and Other Deductions

• Overstocking can lead to increased storage costs, while understocking can lead to lost sales and reduced profitability.
• Reconciliation ensures the accuracy of those records, providing you with reliable data you can depend on.
• Finally, for a gourmet chocolate brand looking to expand internationally, I’d leverage financial data to guide your scaling efforts.
• Because the advertising arrangement is not separable from the sales arrangement with the retailer, the CPG company would record the allowance as a reduction of revenue.
• Personnel & fixed costs are a small portion of the P & L, as we just said, so you should be looking to leverage the fixed costs as much as possible since there isn’t much to begin with.

With automated tracking, you can identify potential bottlenecks or areas where products are sitting idle for extended periods. This empowers you to optimize your fulfillment processes and ensure a smooth flow of goods. Unlike brick-and-mortar stores with a single physical location, eCommerce brands can have a virtual presence in multiple states, each with its own sales tax laws, rates, and exemptions. It’s even worse on marketplaces, where many states have enacted marketplace facilitator laws.

• Our specialized team will extract and analyze your trade spend data to provide insights and advice, and assist with disputes.
• You’ll have multiple partners—each with their own promotions, spend calendars, order volumes, and deductions.
• Missteps in financial management can quickly escalate and give rise to problems with inventory valuation, compliance with tax regulations, and more.
• In the marketing category, you might include demos, advertising, in-store displays, marketing campaigns, and contests.
• The most common financial challenges we see in the CPG industry relate to net working capital, tracking and reconciliation of trade spend, gross margins and rising customer acquisition costs.

Accounts Receivables and Accounts Payables

In either case, the engagement is led by its Connecticut-based team and executed by handpicked and intensively trained offshore accounting & finance professionals. EA’s CEO, Haroon Jafree, has 25+ years of US CPG cpg accounting experience, 10+ years at C-suite levels. 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. The Consumer Packaged Goods (CPG) industry thrives on a high-octane mix of rapid sales, tight margins, and constantly moving inventory. At Vdriven, we’re committed to empowering brands with the knowledge they need to grow and succeed—let’s dive in and set your brand on the path to financial success.

How to Structure Your Chart of Accounts as a CPG Company

• My best advice here is again to just get started – significant improvements can happen in small steps with each monthly close.
• This reserve is an estimate and should be recorded based on historical trends, industry trends, or other substantiated data.
• Financial accounting and reporting can be complex and time-consuming for CPG companies, particularly when managing complex supply chains, inventory management, and forecasting demand.
• A CPG-specialized accountant analyzes your sales patterns, product turnover, supply chain costs, seasonal demand fluctuations, and storage expenses to pinpoint inefficiencies in how inventory is managed.
• In that case, the LIFO method may result in a lower taxable income than FIFO since the most recent and more expensive inventory is assumed to be sold first.
• 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.
• Move accounting work to the pros, and get more time and resources for your core business activities.

Get expert gross vs net advice from the Propeller team to navigate the changing CPG industry dynamics. Pedro holds a BA and MPA from The University of Texas at Austin and an MBA from Harvard Business School. He is an active member of the Young Presidents Organization, continually seeking growth in both leadership and learning. Outside of work, Pedro enjoys family time and outdoor activities, drawing personal fulfillment from his roles as a husband and father. Get in touch today if you’re ready to take your CPG business to the next level. Relationships with investors, lenders, consultants, and vendors who understand the intricacies of CPG operations open doors that would otherwise remain closed.

Analytics make it possible to predict lag time and determine when cash reserves might be lowest. Companies that want to develop best-in-class departments can take strides by asking the right questions and taking care to work their way to the right answers. I’ve broken up the questions below into broader areas to help CPG accounting and finance teams focus their efforts. While some of the activities expressed in the questions below seem readily apparent, they are not always activities that Remote Bookkeeping are prioritized and completed.