Many of us are looking forward to putting 2020 behind us and welcoming in a new year. The idea of a fresh start is refreshing and business owners are looking to prepare their businesses for 2021 and beyond.
Looking back on 2020 and acknowledging what worked and didn’t work for you and your business is vital to mapping your 2021 approach. While there are numerous areas to think about, including operations, human resources, and sales, these four key steps will help point your business in the right direction.
“Flexibility will be the central theme for 2021. Preparing multiple options may help the process of being prepared for the unexpected.”
Build Your Budget
The start of the new year is a great time to prepare your budget. And entering 2021 marks a critical time to sit down and analyze your future.
The COVID-19 pandemic of 2020 caused many businesses to realize that the traditional static budget of using fixed inputs and outputs was no longer necessarily useful. Creating a fluid and flexible budget that can adapt to changing business realities is now the new reality.
As many small businesses were stretched to the max in 2020, feeling like you were always reacting was the norm. You were stress-tested and learned some valuable information. Use that knowledge and combine it with a proactive approach.
Creating a “perfect” budget for 2021 is probably unrealistic, as things possibly get more difficult before returning to normal, building a better budgeting process is attainable. Businesses should consider preparing a few different budgets that capture best and worst-case scenarios that roll back spending to factor in contingencies for scarce resources or slowed demand. This rolled back spending can create contingency funds that can be used say when demand for your products in certain parts of the country increases or when customer retention rates drop.
Collaborate with your managers to prioritize tasks and projects to justify when and how much to spend. New or special projects that were important at the start of 2020 may be optional for 2021. If you pivoted and launched new products in 2020, access whether you want to include these revenue sources in your 2021 budget.
Flexibility will be the central theme for 2021. Preparing multiple options may help the process of being prepared for the unexpected.
Talk to Banks and Shareholders
If you haven’t already been having an ongoing dialogue with your bank, start one in 2021. With 2020’s unprecedented business environment, banks have been working round the clock to help their customers. They’ve likely encountered every possible scenario a business could face. You should rely on their expertise to guide you, but they can only help you if you are honest and prepared
Whether you need a bridge loan to finance operations, need help completing your PPP loan forgiveness application, or need a line of credit in the event you need short-term cash flow in 2021, start the conversation today.
Similarly, start a conversation with your shareholders and partners. Set a realistic tone and expectation for 2021. This will be easier to do once you’ve completed your budgeting scenarios. Let them know the worst and best-case scenarios and explain how you’re prepared to adapt as the uncertainty of 2021 unfolds.
Although the thought of having these difficult conversations with shareholders may be stressful, they will appreciate your honesty and place further trust in you that you’re making the right decisions for business success in 2021.
Move Your Back-office Away from Paper
If you weren’t previously optimizing your use of technology, the pandemic quickly forced you to. When administrative offices closed to keep employees safe, working remotely became the new norm and accessing documents remotely became vital.
While having multiple filing cabinets and heaps of paper was sufficient when employees worked in an office, it quickly showed its ineffectiveness when the pandemic struck.
Continue the trend to move your office away from reliance on paper files and documents. With numerous electronic storage options, it’s now cost-effective to move away from paper filing cabinets.
Cloud storage providers ensure your data is secure and easily accessible. And unlike paper filing cabinets, electronic document storage is easily duplicated to create back-up copies.
Having only paper files is risky. With only one copy of documents stored in a cabinet or a box means that if that paper is misplaced or damaged (fires are a real risk these days), you have no back-up copy.
Upgrade Your Accounting and Bookkeeping
With 2021 being the year of flexibility, having an agile accounting team will position your winery for continued success.
If 2020 caused you to reduce your bookkeeping and accounting staff, your business might be at a disadvantage now. If you find your books are not up-to-date or you’re not receiving regular financial reports from your accounting department, you may be operating leaner than you should.
With more uncertainty to come, having timely financial information about your business’s health has never been more critical. When you’re going to need to make decisions quickly in 2021, you’ll need current, accurate financial statements.
But if you’re uncertain about bringing on more employees, outsourced bookkeeping and accounting may be what you need.
With outsourced accounting, you can quickly scale your resources to meet your business needs. You’ll not have to wait to find and hire new staff and train them so they’re up to speed. Your outsourced team can add new members immediately who are already experts in the winery and beverage industry. And if business slows down, you can scale down your outsourced team until business picks back up again.
Outsourcing your accounting can provide immediate expert advisors who can provide guidance and financial direction in uncertain times. While you might think that having industry expert accountants on your team may be a luxury your business can’t afford, the numerous flexible fee options at Protea fit any budget. With professionals with decades of experience in the winery and beverage industry, you’ll receive the specialized knowledge you need with the personalized service you deserve.
Reach out to us today to schedule your initial evaluation, and let us help you take some of the uncertainty out of 2021.
Outsourcing routine tasks is an easy way to simplify and grow your business. Accounting, customer service, and marketing are easy places to start when it comes to outsourcing. None of these tasks are unique to your business but all are necessary for a successful business.
Fewer in-house employees and the legal and financial complexities that come with them mean you’ll be able to quickly adapt when the time comes to grow your business. But is outsourcing your accounting right for you?
Consider these five advantages when looking to hire an outsourced accounting team.
Save Money and Reinvest to Grow Your Company
Employee hiring can be expensive. Recruitment, pre-screening reports, training, and payroll taxes add up quickly when hiring a full-time accountant. The ongoing salary and taxes will eat into your profits even when your business is in a lull.
By using an outsourced accounting team, you’ll pay a fraction of the money you’d spend on full-time employees. And that money you’ll save can be used to grow your business.
Perhaps your winery needs to replace its aging cooperage or purchase a new point of sale system for your retail operations. Reducing your payroll costs can help fund these new investments and grow your business.
As an extra bonus, no more searching for an employee with decades of experience in the beverage industry who knows the industry jargon and nuances. You’ll have a team of winery accounting experts on hand.
Promote or Reinforce Good Business Habits
If you’ve been attempting to do your own bookkeeping and find that it’s not a priority and doesn’t get completed until the bank, the tax preparer, or an investor asks, you’re not setting yourself up for victory. Accounting is the language of business and your business needs to be fluent.
When you work with an outsourced accounting firm, you’re working with a team of financial experts with years of experience in bookkeeping, financial statement preparation, and internal controls.
An outsourced accounting team can help with calculating winery inventory costs and design internal controls to prevent employee theft. Relying on your team of experts allows you to have up-to-date bookkeeping records so you’ll always know where your business stands.
These solid habits will pay off when the time comes to expand your business. Outside investors will love seeing that you have complete control over your business and its operations.
Receive Unbiased Advice From Your Accounting Team
If growing your business means soliciting outside investors or competing in a new market, your outsourced accounting team can provide you with the unbiased advice you deserve.
Your team of experts can offer tips on how to reduce your cost of goods sold to obtain a higher profit margin to make your winery attractive to investors. Or they can help you evaluate various warehouses to find the best fit for you.
And if you’re in need of improving cash flow, ask your team how you can reduce your accounts receivable and encourage customers to pay quickly. Offering a discount for prompt payment may cut into your profits but if it decreases your need to rely on expensive short-term loans to meet your cash needs, it may well be what your business needs to hear.
Outsourced accountants can see your business from the outside, something that may be challenging for the business owner. They can see what’s working and what isn’t. And any fair and trustworthy accountant will give you an honest take on the health of your business.
Reduce Burdens on You and Your Managers
As a winery owner, you’re pulled in dozens of different directions. Harvesting, production, operations, finance, and customer relations all compete for your attention each day.
You can alleviate stress on you and your management team by letting a team of expert accountants handle the day-to-day finances. Let them get into the trenches so you don’t have to. They will keep your bookkeeping records current so that you’re free to focus on areas that need your personal touch.
Relying on your team’s expertise gives you the confidence you need to make sound business decisions.
Your expert outsourced accounting team can even help with production reporting and TBB compliance – freeing up your operations team to focus on quality production.
Grow Your Business Together
When the time comes for your business to expand, your outsourced team will be able to grow with you. You won’t be slowed down searching for and hiring additional full-time employees. Start with a team now that has the ability to meet your needs today and tomorrow.
Rely on a team of experts who can help you answer questions like:
- Am I pricing my cases correctly?
- Which customers are most profitable?
- Can I afford to offer seasonal sales incentives?
And if the time comes when business is slow, your outsourced team can easily be scaled back. You won’t have to continue incurring overhead payroll costs when revenue has dipped. Your outsourced team can fluidly adjust to your business needs.
If you’re considering outsourcing your accounting, do your due diligence to find the right team of experts to complement your business. With the right outsourced team, you’ll be able to tap into the top talent in the accounting industry setting your business up for continued success.
Let Protea be your team for today and tomorrow. Discover why we’re the premier winery and beverage accounting experts on the West Coast by requesting your complete business evaluation today.
Few of us like to think about bookkeeping and accounting. Without it though, you’ll find yourself in the dark about how your winery is performing.
Bookkeeping is the backbone of all businesses. To know what’s happening at the most basic financial level, you’ll need to have a great bookkeeping system.
Today, learn why bookkeeping is essential for a small business and how it prepares your business for continued success.
Understand the Who, What, and Why
Accurate and timely bookkeeping lets you know who owes you money, who you owe money to, and how much you own.
Your bookkeeping will allow you to know:
1. Who owes you money,
2. What they owe you, and
3. Why they owe you.
You’ll have receivables if you’re making sales on account. And without good bookkeeping, you won’t know whether you’ve been paid for all of your sales.
Keeping on top of your receivables will help you maintain your cash flow and avoid charging late fees and chasing collections.
Tracking the who, what, and why with bookkeeping helps you with payables too.
You want to know who you owe money to and how much you owe them. Paying your vendors and suppliers on time avoids paying late fees and helps to maintain a strong working relationship. Plus, these vendors could provide trade references when you’re applying for credit with another supplier or a loan from a lender.
Great bookkeeping lets you know how much equity you have in your business.
Your equity is more than just the cash you invest. It’s also the assets, liabilities, and accumulated profits of the business. Equity calculations are important when applying for loans or taking on new investors. If you don’t know how much equity you have in your business, a lender or an investor won’t be comfortable giving you money.
Improve budgeting and planning
Proper bookkeeping is essential for budgeting and cash flow management.
When you keep track of your receivables, you can manage your cash flow better. You want to ensure that money is flowing in on a consistent basis to offset the money that goes out each month. If you let several customers become past due, you’ll need to use other resources, like delaying payments to suppliers or using your own capital, to make up for the cash shortfall.
Keeping on top of your bookkeeping and cash flow will let you budget effectively. Budgeting is an essential process for anyone in the beverage industry. It allows you to allocate money to processes critical for your business’s success and prioritize spending.
Without a solid budget, you will feel like you’re just running in a circle, never knowing if you’re meeting your goals. Investing a little bit of your time now to get your bookkeeping in line to prepare your budget will free up your time and energy.
Elevate analysis and decision making
Great bookkeeping will produce essential reports you’ll need to make decisions for your business.
Although you may be in the winery industry for your love of wine, you’re also in business to make money. You’ll need an income statement, also called a profit and loss statement, to know whether you’re turning a profit. The income statement will show you profit margins and where you’re spending money on overhead expenses.
With a current income statement, you’ll be able to make decisions on whether it’s necessary to cut costs or if you need to grow your sales revenue.
The income statement receives most of the attention of business owners, but the balance sheet is just as important. Here you’ll be able to see everything you own and owe in one place.
This is where you’ll see if you’ve kept on top of collecting on your receivables and how much inventory you have on hand. The balance sheet is also where you’ll see your equity amount.
Streamline Tax Planning and Prep
Do you find yourself scrambling each year to get your company’s financial affairs in order for your tax preparer? Although some last-minute calculations for things like depreciation are common, most of your financial information should be up-to-date at year-end.
Your bookkeeping is essential to preparing your financials for tax time. It will ensure you receive the maximum deductions and credits.
And when your books are organized, you’ll likely receive fewer questions from your tax professional.
Access to accurate financial data will put you on the path to success. And if you need help with your bookkeeping needs, start by asking us how we can help.At Protea, our dedicated and experienced staff are industry experts in the winery industry. Let us help with the day-to-day finances so you can get back to making great wine. Our team works hard to make sure you’re positioned on the right path. Reach out today for an evaluation to learn what Protea can do for your winery.
It’s been a tough summer. First, the COVID pandemic slowed down commerce, and most recently the massive wildfires are burning throughout Northern California. This year’s fires came earlier than they historically have and this early arrival means grape harvesting is caught in the crossfire.
Many winery owners are rightfully nervous about what the future holds and are thinking about what they can do to protect their business. Fortunately, the government has stepped in to help businesses impacted by the wildfires and there are numerous action steps you can take today to help prepare you and your business for future natural disasters.
Extended Tax Deadlines
The IRS recently granted some relief to taxpayers impacted by the California wildfires. It extended the filing deadline for all tax returns and payments that were due starting on August 14 through December 15. The new deadline for these returns and payments is December 15. The California Franchise Tax Board followed suit and issued a similar extension.
So, C-corporations that timely filed for an extension to file their annual tax return would have had to file by October 15. The new deadline is now December 15.
Likewise, S-corps, partnerships, and sole proprietors would have had to file by September 15 but now have until December 15 to do so.
Any estimated income tax payments that would have been due on September 15 are now bumped back until December 15.
Those 3rd quarter payroll tax returns and any payment that would have been due on October 31 are now due by December 15.
If your county has been declared a federal disaster area by FEMA, you will receive this automatic extension. This new extended deadline is automatically applied by the IRS and there is no need to file any paperwork. As of September 2020, FEMA has declared the following counties federal disaster areas: Sonoma, Napa, Lake, Yolo, Butte, Solano, San Mateo, Santa Cruz, and Monterey.
All penalties and interest will be waived so long as you file all your returns and pay all your tax by December 15.
Disasters and Insurance
Most wineries have multiple layers of insurance protection. Property, business interruption, and viticulture policies just to name a few.
Now might be that time you need to make use of your insurance. If you’ve suffered damage from the wildfires, contact your insurance agent right away. Many property insurance policies cover natural disasters like wildfires. And some policies will cover a portion of lost revenue and increased expenses due to business interruptions.
Reviewing your insurance needs should be a regular occurrence. And if you haven’t had that conversation with your agent in a while, now is a good time. Talk through all your business needs to craft the coverage that’s right for your winery.
It’s never a fun topic to discuss but disaster preparation and plans should be an important part of your winery’s business strategy. With a proper plan and early preparation, you can lessen the chance of being negatively impacted by a natural disaster.
Regular Maintenance Is a Must
Winery owners should make sure their property is in the best possible shape to withstand any natural disaster. Repairs and maintenance should be made regularly, including clearing fallen debris and removing dead or dying landscaping.
Create a Continuity Plan
Have a plan in place to communicate with winery staff in the event of an emergency. Create a contact list with all employee’s names and phone numbers and establish procedures about how communication will happen in the event of a disaster. Don’t forget to consider how you’ll communicate with customers and suppliers.
Have a point person at your winery who is responsible for monitoring natural disasters. This person should have clear authority to make decisions about the safety of your crop, inventory, and staff.
Ensure your plan includes how you’ll protect your equipment, buildings, and inventory.
Protect Your Electronic Data
With so much of your business data stored electronically, be sure that it’s backed up regularly. The backup should happen off-site so that in the event your computers and servers are damaged, you’ll still have access to all your records.
If you’ve been hesitant to use the cloud to store your data, consider making the switch. Most cloud storage providers make multiple backups each day and access is easy from anywhere you have an internet connection. Cloud storage could help your employees to continue working even if your winery has been evacuated or damaged from a natural disaster.
Document, Document, Document.
Keep thorough and complete records of all your business assets and keeping pictures of all your assets will help if you have to make a claim to your insurance carrier.
You’ll want to document:
- The type of asset, including model number and serial number, if applicable
- The year it was placed in service
- The price you paid for it
- Any customizations made to the asset
A good place to start would be using a fixed asset schedule or report. If you don’t keep this schedule, your tax accountant should have a copy.
Keep in mind all your assets might not be on the fixed asset schedule. Inexpensive equipment like computers or office furniture may not be on the fixed asset schedule, but you’ll want to keep track of those, too.
Managing and Protecting Inventory Before a Disaster
Inventory is one of the largest assets a winery owns. With a robust inventory management system, you’ll know exactly what you have, and protecting your inventory from a natural disaster should be included in your contingency plan.
Your wine racks should be sturdy enough to withstand the shaking of an earthquake or strong winds from storms and your wine inventory should be well organized and labeled correctly.
Keeping your inventory system up to date and organized will be helpful in the event you need to file an insurance claim.
Your inventory management system should know the exact dollar value of all your inventory at any given moment. And if you hold a large amount of inventory, ensure your insurance policy covers all of it. A report with your costs and quantities can be created quickly.
If your business has been affected by the wildfires in California or you could use a helping hand with your business strategy or accounting, get in touch with Protea now. Our professionals are experts at bookkeeping for wineries and work tirelessly to ensure your financial goals are met. Learn how outsourced accounting and bookkeeping can save your winery time and money.
Accounting and bookkeeping are the heartbeat of the business side of your winery. Unfortunately, these critical functions are too often overlooked by busy owners. While it’s tempting to take shortcuts, or simply rush through the tasks, that can lead to inaccurate financial statements. That’s why Protea Financial offers outsourced accounting services.
While it’s certainly understandable – you have your plate full with so many other business tasks – errors in your accounting and bookkeeping can derail your business. And often without warning.
In 2019, it was reported that 82% of small businesses fail due to cash flow problems. And this infographic from SmallBizTrends shows that 30% of all small businesses are continually losing money due to poor financial management.
With business growth, wine sales and general management stealing your focus, you may consider outsourcing your accounting to ensure financial accuracy and promptness. Outsourcing your winery accounting can help reduce your workloads and divert some, or all of your financial tasks to qualified, highly-skilled accountants. The results will be evident. Once you have outsourced your winery’s financial tasks to an experienced accountant, you can rest assured that your business accounts are in safe hands.
Don’t believe us? Consider this: A survey in 2018 showed that over 80% of businesses outsourcing their accounting function would recommend their accountant to other businesses. If you’re not yet convinced, we’re going to tell you about all the benefits of outsourced accounting.
What Can an Outsourcing My Accounting Department Do for My Business?
Outsourced accounting can take some elements or even the entire function of accounting outside of your business. This will make room for other tasks – especially those that are particularly time-consuming. Whatever your current accounting situation, outsourced accounting can offer you a far more comprehensive solution. Here are 4 of our favorite benefits of outsourced accounting.
1. Accounting Firms Are Made For This
Wine accounting is a complex and challenging task. Not only does outsourcing your accounting take the work off your shoulders, but it places it in the competent hands of highly trained and experienced accounting staff. That’s right, with many accounting firms, you’re no longer relying on one person to manage your books, often you’re getting a whole team.
2. You Can Cut Your Overhead
When you outsource accounting, you will only pay for the work done. In the USA, worker illness and injury cost businesses a total of $225.8 Billion. You need not be one of them. By outsourcing your winery accounting needs, you skip the hassle of payroll taxes, sick leave and vacation time. Therefore, significantly improving your winery’s profit margin. You also eliminate the risk of suddenly losing staff – an issue that most businesses face when someone goes into long term sick leave or quits without notice, leaving you and your books high and dry.
3. Trained Accountants Are Meticulous and Logical
There’s nothing quite so analytical and precise as the mind of an experienced accountant. By nature, accountants are highly logical and willing to deep dive into the details in order to produce the best outcome. Often, accountants utilize highly complex software in order to manage your accounts and to produce the most accurate results possible. One of the many benefits of outsourced accounting is of course, the accountants themselves.
4. You’ll Save Money
While paying someone to do a task you managed yourself might not seem like it would save you money, it definitely will in the long run. You are now free to take care of your business in other more effective ways, or to hone your focus into one element of finance such as bookkeeping and redirect the rest. So the fee your business pays to an outsourced accountancy firm will pale in comparison to the profits from a more active business. In fact, around 30% of businesses outsourcing their accounting functions have been able to increase profit with the guidance of their new accountant.
How Protea Financial Will Bring You All the Benefits of Outsourcing Your Accounting or Bookkeeping
To remain successful, wineries need business leaders to run fast while remaining agile, as well as access to accurate financial data. The opportunity cost of not having superlative accounting is potentially enormous. Protea is here to empower you to cultivate business growth, while your outsourced accounting team manages your financial back office.
Our clients enjoy the benefit of having a team structured around your business needs. The strategic benefits of outsourcing accounting start with the savings. It’s the stack of talent that works with you around the clock to maintain the integrity of your company finances. No matter what happens, your Protea team will have your back and strive to make your job easier.
Begin your journey with Protea by requesting an evaluation today. Our goal is to design a winery financial strategy that allows you the freedom to scale at the pace you desire.
It is common for small wineries to avoid raising their prices for an extended period of time. This is due to a variety of factors, including a lack of accounting input regarding price-volume trade-offs and management’s desire to preserve customer interest. Alternately, a winery may opt to make price changes based on a gut feeling. Neither of these strategies will help you maximize your profit margins and grow your business.
The Financial Impact of Price Changes
Perhaps the winery simply neglected to make price changes. That is still a decision that will impact the winery but produces exclusively negative results. When wineries choose to delay price changes, the cost of production steadily eats away at profit margins. This reduction in profit margins may go partly unnoticed or unattributed and encourage wineries to make ineffective price changes. Wineries should adjust their prices with relative frequency to match the rise of inventory costings and the value of labor. Planning for price changes is a key step for proprietors to undertake.
However, important decisions regarding price adjustments do not need to be made by a single person or section of the winery – rather, it should be a deliberate choice based on data from multiple individuals or teams. By facilitating a conversation between sales, winemaking, and accounting, a winery can make informed decisions.
Establishing a Team of Expert Staff
Each section of the winery provides valuable information. Effective accountants will be tasked with determining the true profit margins for each wine. While it may seem simpler to apply a blanket price increase, this ignores individual inventory costings. A generalized decision can negatively impact your price-volume trade-offs and result in lost profit. It’s invaluable for wineries to track data on individual SKUs throughout the year.
Each wine will have a set of associated costs: fruit costs, barrel costs, winemaking costs, and packaging costs. By keeping track of these SKU-specific profit margins, it will be easier to adjust the price for individual products.
The sales team can compile market data to estimate the price elasticity of demand. This can help guide the price change by demonstrating how much a 2-5% increase will impact the volume of sales. This insight on price-volume trade-offs is an invaluable factor for providing an estimate for a price increase range and its effect on the business’s profitability. This market data is also crucial for pricing individual wines to maximize profit. Your most valuable wine can generate a higher ratio of profit when marketed and priced appropriately.
How to Determine the Right Price Change for Your Winery
It is important for wineries to avoid making gut-feeling decisions. At best, these choices will be ineffective – at worst, they will negatively impact your profit margins and customer trust. Wineries should rely on a dedicated team to keep an eye on trends, track inventory costings, and reevaluate costs versus prices.
For the most part, wineries should plan to increase prices for their products. Production costs and the value of labor is steadily rising, and that cost should be reflected in the price to maintain a 45% or better gross profit margin. There are rare cases where a winery will elect to decrease price and increase the volume of a particular wine to reap more profit over time.
However, due to the extensive timeline needed for winemaking, it is difficult to increase product circulation quickly enough to improve profit margins. Wineries may choose to invest in additional labor and inventory to bottle more wine. Yet months will pass before a winery can sell their product to consumers. This lag between investment in the product and reaping profits (and the associated time value of money) can compound the difficulties and further reduce the return on capital caused by low profit margins.
Another possibility exists for wineries to improve their profit margins by decreasing the price of their wines. However, this is a rare situation. This is most common in wineries that already have high-profit margins, and even then, it is rare. As with all pricing decisions, choose to approach price decreases with carefully collected analytical data.
Instead, wineries will almost always increase the price (instead of the volume) to reflect the value of the product. It is likely that a winery may delay price increases due to fear of customer reaction. This is one reason why it is necessary to rely on data from the sales team. By allowing sales to collect and report data regarding market elasticity, management can make guided price adjustments and have a realistic estimation of the impact on consumers.
Employing Phase Planning
If a winery has delayed increasing prices for an extended period of time, it may be necessary to institute phase planning. Planning phases of price increases can preserve the overall price elasticity in your market, therefore encouraging consumer retention. Choosing to increase prices gradually will also allow for the sales and marketing team to evaluate the effect of each phase. This data can be used to adjust future phases as a winery restores its profit margins.
Price changes can and should be communicated to customers. This is especially true for phased planning, as the buyer will see multiple raises in price. The communication can be effectively handled by management and sales. Providing a brief snapshot of the accounting data is usually deemed unnecessary. Instead, communicate with consumers in generalities while maintaining transparency. By setting expectations, customers will be more receptive to price increases. Effective marketing has the potential to reduce price elasticity.
Though it is possible to manage larger price increases or phrased price changes, it is ideal to make more frequent changes. Reviewing costing and pricing quarterly encourages wineries to track and record data throughout the year. Insightful inventory costing is often left until the end of the year. However, this decision can harm wineries. Accountants may neglect collecting important information under the pressure of a deadline. This can easily impact a winery, as it loses the potential to prioritize marketing its most valuable wines.
Price Changes Keep Your Winery Thriving
In order to maintain profit margins and preserve positive consumer opinion, plan for price changes. Even if you do not increase your prices quarterly, it’s crucial to collect and analyze pricing and costing data on an ongoing basis. If you haven’t done so already, construct a dedicated team to address pricing. Opening this line of communication and trusting in the expertise of sales, winemaking, and accounting is the key to maintain and improving gross profits.