8 Manufacturing Accounting Tips That Benefit Your Company
Poor record keeping can have negative consequences in a manufacturing company. There can be delays in production, lesser profits, and dissatisfied customers. Here are eight accounting tips to boost productivity, increase record-keeping effectiveness, and help you to make decisions based on data.
Robust Accounting System
Look for a system specifically designed for manufacturing companies to track financial transactions and manage the company’s finances.
Accurate Inventory Management Services
A typical manufacturing company’s statement of financial position should include raw materials, work in process, and finished goods as part of the inventory calculation. You should also have a periodic inventory system to accurately track the number of products you have at any given time in your production line.
Update Inventory Records
Look for a system that tracks inventory in real time.
Monitor Production Costs
Regularly track and monitor direct and indirect costs to ensure that you are not overspending or even overtrading and to identify areas where cost savings can be achieved.
Monitor Cash Flow
Use a cash flow forecasting tool to anticipate any potential cash flow shortages and take steps to address them.
By accurately tracking job costs, you can identify inefficiency and improve profitability.
Prevent errors and fraud in the accounting process by segregating duties, requiring approvals for transactions, and performing regular audits.
Outsource Accounting Services
Rather than trying to manage the accounting services yourself, outsourcing these services is beneficial for owners who are not familiar with accounting practices nor have the time to do them. It can also be more cost-effective than hiring a full-time, internal staff member to oversee these activities.
Reach out to us to start a conversation about your accounting practices and needs. We’ve been helping Iowa manufacturers and distributors for more than 7 decades and would love to help you too.