Wine making company

About the company

Management of inventory

The firm had inventory in terms of finished stock and in process inventory which were not a part of the books of accounts. The finished stock of the firm was stored at a warehouse of a third-party service provider. The sales invoices entered in the books of accounts was not reducing the finished goods inventory. The raw material purchases were not entered in the books of accounts. The result being:

Defining a bill of material for wine production

A bill of material (BOM) is a starting point in a manufacturing process. The firm did not have clear idea of the costs involved in the cost of production. Consequently, the cost of production and the resultant margin on products were not known.

Correction of accounts receivables

Most of the firm’s sales were online orders, in effect there should not be any accounts receivable. However, the money’s received from customers were not set off against the receivables. The settlement from the payment gateways were not reconciled with the bank accounts. The balance sheet was incorrectly carrying receivables.

Accounting entries from the bank statement

There was a huge backlog of entries from the bank account which were not entered in the bank accounts. There were nearly 2,000 entries which had to be entered. The included customer receipts, business expenses, loans, and the owner’s drawings

Defining a Bill of Material

Our team had to prepare a flow chart detailing the process involved in production of wine. We had to define the costs for each of the following:
The costs for all the above had to be defined for six different types of wine produced by the firm. Further, this had to be in the accounting software which was being used by the firm. In this case the firm was using Zoho Inventory for managing the inventory. Our team set up the bill of material in Zoho Inventory. The units of measurement of the final product were different from the units of measurement of the raw materials. Our team harmonized these different units of measurement for ease of comparison.

Managing Inventory

Correcting the customer receipts

One of the major points of troubling the firm was handling the customer receipts. The receipts from online sales were transferred from different payment gateways into the firm’s bank accounts. Our team had to do a three-way match between:
This was not an easy task as the sales showed an abnormal spike upwards pushing up the sales 10X in a month. This task was completed by our team leading to reconciliation between the payment gateway and the bank accounts.

Reconciling the bank accounts & credit cards

Result

we could achieve

The bill of materials was set up for all categories of wines, giving the management a clear picture of the cost of production. Consequently, the margin on the products were clear for the management.

The dashboard on Zoho Books (accounting software) started showing the correct picture of accounts receivable, accounts payable, expenses, and sales.

Our team established an accounting procedure including the documentation for transactions to ensure accurate information.

The firm was able to file the tax returns on time.

The books of accounts were also presented to auditors as part of due diligence.

The owner of the firm was featured on “Shark Tank”. He was made an offer for investment, which he accepted

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The most frequent problems that business owners face are to do with accounting & regulatory compliance. Entrepreneurs view time invested in doing both as unproductive time.

34, Manikanta Sankeerana

Complex, 1st Floor Gangamma Temple St.