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Accounting for Manufacturers

Having an accountant who understands your manufacturing business can provide significant benefits.

The truth is, running a manufacturing business in Australia is tough given the high labour costs. Not only that there are complexities such as managing inventory and costs, tracking customer orders, managing pending builds and assemblies plus identifying which orders have shipped. If you import components or export your finished goods you also have to contend with the volatility of the Australian dollar.

Over the past twenty years we have helped a number of manufacturers through the various stages of their business life cycle and we can provide you with a range of accounting, tax and business coaching services to support and grow your business. If you need help with job costing, pricing, break even analysis or management accounting services we can assist you. We also use industry benchmarks to compare your business performance against your peers to help you assess what is working in your business and what needs working on.

THINKING OF STARTING A MANUFACTURING BUSINESS?

We are recognised as business start-up specialists and manufacturers are one of our industry niches. If you are looking to start a manufacturing business or buy an existing operation, there are numerous issues to consider including your business structure, tax registrations, insurances, tools, software, your vehicle plus finance. As business advisors we can assist you in all of these areas plus provide advice on HR matters, payroll and the preparation of a business plan.

Over the past two decades our team of accountants have helped dozens of manufacturers get their business off to a flying start. We offer you experience, technical tax knowledge and most importantly, an intimate understanding of the manufacturing industry.

Starting a business is a bit like building a house and you need solid foundations. In a business sense these include the right taxation structure, accounting software, insurances and marketing. Your choice of business structure is critical and there are a number of different options such as sole trader, partnership, company and trust. When it comes to selecting the most appropriate tax structure for your business we always recommend you ‘start with the end in mind because Australian tax laws are complex and changing your business structure at some point in the future can trigger a capital gains tax event that could prove costly. Whenever we provide advice on business structures we always take into account issues like:

• Minimisation of Income Tax
• Maximize Asset Protection
• Allow for the admission of New Business Partners or Investors
• Comply with all Legal Requirements in your Industry
• Consider Future entitlement to Discount Capital Gains Tax Concessions
• Risk Profile of Your Industry

As a consequence, we often find the business structure is a compromise based on the relative importance of each of these issues.

Your choice of accounting software is another brick in your business foundations and up to date, accurate financial records let you to make informed business decisions. The wrong choice of software can be catastrophic and poor business records are one of the biggest causes of business failure in this country. You need to match your business needs with your level of accounting skill otherwise you could end up producing ‘computerised shoebox’ records that cause frustration and extra fees which conflicts with our mission of helping you slash the cost of bookkeeping and compliance. Here at SBG Accountants, we want to be your accountant and business advisor, not an expensive bookkeeper. You’ll find we support a range of software options but do have a preference for cloud based solutions like Xero.

To build a house you also need the right tools and when 'constructing' your business we have developed a number of tools including a start-up expense checklist broken down into various categories including: 

-  tools and equipment
-  professional advice and software
-  information technology costs
-  marketing and signage
-  vehicle and trailer costs

This checklist will help you identify all your potential establishment costs and these figures then filter through to our cash flow budget template and allow us to produce a projected profit and loss statement for your first year of trading. These reports can also tuck neatly into our business plan template that is designed to help you secure funding from external sources like a bank.

Our business start up checklist is another useful tool. For a manufacturer your truck van or utility is arguably your most important business tool and you can download our Motor Vehicle Tax Guide from the resources section of our website to learn more about the alternative methods of claiming your vehicle expenses and the distinction between a business and private trip for tax purposes. In addition, through our affiliate partners we can also assist with vehicle finance (chattel mortgage, CHP or lease) and get you fleet pricing on your new car, ute or light commercial van that could save you thousands of dollars.

Through another affiliate partner we can also help you source funds to finance your business purchase or equipment. Pricing is absolutely vital to the success of your business and we can help you do some price modelling plus we use benchmarks to compare your business performance against your peers so you know what is working in your business and what needs working on.

If you're starting a business you don't need to reinvent the wheel as we have all the tools and resources to help you get off to a flying start. We view the tax return as the start of the client process not the end. We can do some financial modelling and using industry benchmarks we can compare the performance of your business against your peers so you understand what is working in the business and what areas you need to work on.

MARKETING YOUR BUSINESS

For small business owners, your marketing can be the difference between gloom, doom and boom.

Most manufacturers rely on their reputation and referrals to grow their business. While these ingredients remain important, you need to shift your marketing focus online. Increasingly local searches like ‘trailer manufacturer South Melbourne’ are driving traffic to your website and often your website is the first touch point with a potential new customer. As you know, you only get one chance to make a good first impression and your website is your 'shopfront' and silent sales person working 24/7 to promote your business.

One of our biggest points of difference compared to other accounting firms is our marketing expertise. We can assist you with your branding (business name, logo and slogan), your corporate brochure and help you harness the power of social media to win more referrals. Over the past few years we have worked with dozens of clients to help them create affordable, quality lead generation websites that are responsive to smart phones and tablets. We can provide advice and guidance with your website content including video production and if your website lacks calls to action or lead magnets we'll help you build them. In addition, we'll introduce you to strategies like re-marketing and search engine optimization to drive more traffic to your website.

If you aren’t using some of these marketing techniques your business probably won't reach its full profit potential.

The marketing process begins with your branding and we have worked through the process with dozens of clients over the years and using some online resources we can help you build a modern brand that resonates with your target market. We can even help you develop your stationery at a fraction of the cost of engaging a graphic artist or marketing consultant.

It's important that you understand the Four Ways to Grow A Business so you know the key profit drivers in your business. We can walk you through a number of profit improvement strategies and even quantify the profit improvement potential in your business. Our role is to make sure you don't leave any profit on the table and if you're a manufacturer we offer you a range of accounting, taxation and business coaching services including:

• Start-Up Business Advice for Exporters
• Advice regarding the Purchase or Sale of your Business
• Spreadsheets and Tools including a Start-Up Expense Checklist, Business Plan Template and Cash Flow Budget.
• Provide Advice and Assistance with the Establishment of Your Business Structure (sole trader, company, trust, partnership etc.) taking into account issues like Asset Protection and discount Capital Gains Tax Concessions
• Business and Tax Registrations for ABN, TFN, GST, WorkCover etc.
• Preparation of Business Plans, Cash Flow Forecasts and Profit Projections
• Accounting Software Selection and Training – Bookkeeping, Invoicing, Payroll and Costing
• Preparation of Finance Applications
• Preparation and Analysis of Financial Statements
• Bookkeeping and Payroll Services
• Income Tax Returns and Tax Planning Strategies
• Wealth Creation Strategies and Financial Planning Services
• Industry Benchmarking and KPI Management
• Vehicle & Equipment Finance (Chattel Mortgage & Lease)
• Monitoring and Controlling Labour and Sub Contractor costs
• Advice & Assistance with Pricing and Claiming Motor Vehicle Costs
• Recession Survival Strategies
• Advice regarding Employee Relations and Workplace Laws
• Business & Risk Insurances
• Business Succession Planning

We are not your typical Melbourne accounting firm. We pride ourselves on being business and profit builders who provide a full range of accounting, tax and business coaching services to manufacturers and business owners from all around Australia. If you are starting a manufacturing business or want to take your existing manufacturing business to the next level, contact us today.

We invite you to book a FREE, one hour introductory consultation to discuss your business needs. You can expect practical business, tax, marketing and financial advice that could have a significant impact on your bottom line. To book a time, call us today on (03) 9629 6744 or complete your details in the box at the top of this page. Let's get to work ON your business so it is more profitable, valuable and saleable.

SBG Accountants & Business Advisors - Taking Care of Business