Small-Scale Manufacturing

Bookkeeping for small manufacturers and makers. We track raw materials, work in progress, and finished goods so you know what products actually cost to make.

The Industry

Manufacturing bookkeeping is complex because you have three types of inventory to track. Raw materials you buy, work in progress on the production floor, and finished goods ready to sell. Most small manufacturers do not track this properly and their cost of goods sold is completely wrong.

We work with small manufacturers, custom fabricators, food producers, makers, contract manufacturers, and businesses that turn raw materials into finished products. We know how to track inventory through production, calculate accurate product costs, and handle the accounting that makes manufacturing different from retail or services.

Who We Serve

Small-scale manufacturers, custom fabricators, food and beverage producers, makers and artisans, contract manufacturers, assembly operations, and any business that produces physical goods from raw materials.

What Makes Us Different

We understand manufacturing inventory accounting, cost of goods manufactured calculations, direct versus indirect labor tracking, and overhead allocation. We know product costing is not the same as retail inventory tracking.

The Services

Manufacturing businesses need bookkeeping that tracks inventory through production and calculates true product costs including materials, labor, and overhead. Here’s what we handle.

Three-Stage Inventory Tracking

We track raw materials, work in progress, and finished goods separately. Materials move through production stages correctly in your books. Your balance sheet shows accurate values for inventory at each stage.

Product Cost Calculation

We calculate what each product costs to manufacture including direct materials, direct labor, and allocated overhead. You know true production costs and can price products profitably.

Job Costing for Custom Work

For custom manufacturers, we track costs by job or batch. You know exactly what each order costs in materials and labor. Quotes for similar future work are based on real historical costs.

Waste and Scrap Tracking

We account for material waste, scrap, and production defects. These costs are factored into product costs so your pricing reflects reality, not best-case scenarios where nothing goes wrong.

The Problem

Most small manufacturers treat raw material purchases as expenses when they buy them. But that is wrong. Materials are assets until you use them in production. Without proper tracking, your cost of goods sold is meaningless and your inventory value is a guess.

Without accurate product costing, you cannot price correctly. You might think something costs $50 to make when it actually costs $75 once you include labor, waste, and overhead. You lose money on every unit and do not realize it until tax time.

Wrong Inventory Accounting

Recording material purchases as expenses means your inventory value is wrong and COGS is wrong. You cannot tell if you made money or lost money in any given period because the numbers are fiction.

Unknown Product Costs

Without tracking materials, labor, and overhead by product, you have no idea what things actually cost to make. You base pricing on guesses and hope you are covering costs.

Labor Tracking Gaps

Most small manufacturers do not separate direct labor from indirect labor. Shop floor production time gets mixed with admin, maintenance, and setup time. Product costs are understated because half the labor is missing.

Ignored Overhead

Rent, utilities, equipment depreciation, shop supplies, and other overhead costs are real expenses that need to be allocated to products. Without this, your product costs are too low and your pricing leaves money on the table.

The Outcome

Your inventory is tracked correctly through all production stages. Raw materials, work in progress, and finished goods are valued accurately. Your cost of goods sold reflects what you actually manufactured and sold, not some approximation.

Product costing is accurate and includes all the real costs. Materials, labor, waste, and overhead are allocated properly. You can price products with confidence knowing the numbers are right.

Profitable Pricing

Knowing true product costs means you can price to make money. You stop underpricing because you finally know what things actually cost to produce. You can confidently quote custom work based on real data.

Better Production Decisions

Accurate costing shows you which products are profitable and which ones lose money. You can decide what to keep making, what to discontinue, and where to focus production capacity.

DFW's Trusted Bookkeeping Firm