(415) 418-0020 info@proteafinancial.com
The Benefits of Hiring a Bookkeeper with QuickBooks Experience

The Benefits of Hiring a Bookkeeper with QuickBooks Experience

Bookkeeping is not a new science. Historical records indicate bookkeeping existed as early as 6000 B.C. Ancient Babylonian kingdoms recorded inventory from crops. Bookkeepers in Greek and Roman societies counted and noted agricultural crops, as well as payments to farmers. While bookkeeping may have been around for thousands of years, they are just as important now as they were in the ancient past.

Not only do bookkeepers remain important, but they have branched into specializations.

In fact, there are many different types of bookkeepers with different specializations. While a general bookkeeper is great for a small business, you may reach a point when you need a bookkeeper with areas of specialization. One area of specialization that bookkeepers can have is with computer technology for bookkeeping, such as QuickBooks. Here is some information on why you want to hire a bookkeeper with QuickBooks experience for your business.

 

Protea Financial What Does a Bookkeeper do?

 

What Does a Bookkeeper Do?

The term bookkeeper is short for bookkeeping clerk. Bookkeepers keep the financial records of a business. In fact, bookkeepers are vital for the history of a business, because it is only when a business’ records are precisely kept can information help a business survive. For example, if you don’t have a bookkeeper, but you vaguely remember paying a vendor for your business, how can you prove it, if you don’t keep accurate records?

One of the most important tasks of a bookkeeper is to keep the accounting books of a business, which means they track the income that comes into the business, as well as outgoing expenses from the business. Usually, this means that a bookkeeper tracks the business’ inventory as well, because inventory can be related to outgoing expenses as well as income from the sale of inventory. Depending on the size of your business, bookkeeping may involve using accounting software, spreadsheets and databases.

Bookkeepers also track all of the money, usually through postings to accounting software, on a daily basis. It is through posting each transaction daily that bookkeepers can regulate the amount of money a business uses to operate. Without a bookkeeper, many business owners would have no idea what their monthly expenses and income is, which prevents any business from growing, developing a budget, forecasting future expenses and income, or even securing additional financing.

While bookkeepers do not deal with hiring, onboarding, or other aspects of Human Resources (or HR), they may process payroll, and they will keep records regarding pay, taxes, and other employee withdrawals on payroll, such as Social Security and Medicaid, insurance and retirement benefits. No matter what the payroll deduction is, a bookkeeper can keep track of it.

Because bookkeepers are record keepers, it is essential that they are versed in how to keep the most accurate records possible. Bookkeepers who are excellent at their chosen profession already know all of the best ways to keep records. In the past, record keeping happened in large ledgers, leather-bound, that bookkeepers stored on shelves behind them for authenticity. Now, the best bookkeepers use accounting software to keep the most accurate records possible. One example of accounting software that bookkeepers use is QuickBooks.

 

What QuickBooks Does

In the early 1980s, two computer software programmers decided to move from designing an individual expenses and accounting program (Quicken) to designing double entry ledger books for small businesses—which became QuickBooks. QuickBooks is the predominant bookkeeping software for businesses, with a 95% saturation in the market.

QuickBooks is an important financial tool. Through the QuickBooks program, bookkeepers can keep track of a ton of business financial information—all in one program. QuickBooks can help businesses manage:

  • Accounting. One of the most important functions of the QuickBooks program is to manage income and expenses daily. With QuickBooks, each line of income and expenses are tracked electronically. The importance of having a daily income and expense tally can’t be overestimated.
  • Payroll. QuickBooks can help businesses track the amount of money outgoing for payroll, taxes and employee benefits. This is extremely important for the state and federal business taxes you owe, either quarterly or yearly.
  • Inventory Management. If you have a business where inventory is important because you are selling a product, you need inventory management. Even if you sell a service instead of a product in your business, you still have to manage inventory such as printer paper, ink, pencils, and cleaning supplies. QuickBooks can help you keep track of your inventory.
  • Taxes. QuickBooks keeps track of the taxes (state, local, and federal) that you have paid in, as well as tracking payroll taxes.
  • Invoices. You can make invoices and send them to client, accept payments, and even pay your invoices via QuickBooks.
  • Bank account tracking and balancing (reconciliation). You no longer need to balance your books, because QuickBooks keeps track of all of your incoming and outgoing expenses and income via your bank accounts. Bank reconciliations are no longer an issue.
  • Budgets and expenses monitoring. Because QuickBooks can manage your incoming and outgoing money, you will find budgeting easy to do electronically, and monitoring your expenses will be less taxing as well.
  • Managing accounts payable and receivable. QuickBooks allows you more control over your accounts payable and receivable by setting reminders and due dates for you to keep your money flowing smoothly.

 

Protea Financial Bookkeeper with QuickBooks Experience

Advantages of Hiring a Bookkeeper

With all of the advantages to a QuickBooks program, why would you need to hire a bookkeeper? The most important reason you need a bookkeeper is for financial record keeping. The larger your business grows, the harder it is to keep accurate, up-to-date records. When you hire a bookkeeper, you are able to turn over all of your financial recordkeeping headaches to them.

Another important reason to hire a bookkeeper is to give you an outside perspective on effectively managing the financial side of your business. You have tons of expertise when it comes to creating a business and making it successful, but the financial needs of your business may not be in your wheelhouse. Bookkeepers have tons of experience on financial record keeping and managing your incoming and outgoing expenses.

Although bookkeepers may cost you money up front, they will save you money in the long run, because they will be able to give you tips to save money on the expense side of your ledger. This may mean everything from trimming your office products budget to regulating the amount of inventory you keep on hand. Bookkeepers are invaluable for money-saving tips.

If you want to have time to really manage your business, concentrate on your clients, and focus on marketing and business growth, you need to hire a bookkeeper. While the bookkeeper focuses on the expenses and income side of your business, you can concentrate on making sure your business stays profitable.

 

Why Your Bookkeeper Needs QuickBooks Skills

Hiring a great bookkeeper is essential to growing your business. If you hire a bookkeeper, you need to make sure your newly-hired employee has QuickBooks skills. There are several reasons your bookkeeper needs to have QuickBooks experience.

First, one of the most important skills a bookkeeper can have is computer literacy. Although bookkeepers used to keep ledgers on income and expenses in ledger books, financial management has been working in the digital age for decades. Your bookkeeper needs to be literate in computers and computer programs, such as QuickBooks. If your new bookkeeper has knowledge of QuickBooks, and uses it regularly, you’ll know they can handle other skills on the computer as well, such as documents and presentations.

Bookkeepers must have numerical literacy as well as computer literacy. In fact, numerical literacy may be just as important as computer literacy for bookkeepers. Because bookkeepers need to have extensive attention to detail, numerical literacy is critical for budgeting and forecasting expenses and income. Your bookkeeper who has QuickBooks knowledge will have the skills to go into the program and problem solve when a mistake occurs with either income or expenses to quickly correct the error.

Bookkeepers sometimes use financial calculators for their business, in order to project future income, expenses by the month or by the year. These calculators will help you forecast when you could make changes to your business, such as adding new products or services, or adding new employees. Although QuickBooks has a ton of features to help business owners, bookkeepers with QuickBooks experience are vital for businesses. Along with financial tools, QuickBooks allows bookkeepers to utilize spreadsheets. Spreadsheets have been a part of a bookkeeper’s experience for decades, because they allow bookkeepers to lay out both past and present expenses. If your bookkeeper has QuickBooks experience, he or she will be able to keep your books accurately.

 

Protea Financial Has a Bookkeeper with QuickBooks Experience for Your Needs

Hiring a bookkeeper is one of the most important hires you will ever make. Be sure that the bookkeeper you hire has QuickBooks skills in addition to the requisite financial recordkeeping knowledge. Not sure how to hire a bookkeeper? You can begin by posting the job on job search websites. You can also ask friends or colleagues for recommendations as well. When you’re ready to hire a bookkeeper, be sure they have all the skills you’re looking for. That way, your business will continue to grow and thrive.

To find out more, reach out to us here at Protea Financial. We can help set up QuickBooks, or we can work with an existing account. Let us know how we can help!

 

Options If You Want To Move Away From Paper Checks

Options If You Want To Move Away From Paper Checks

Researchers have noticed a shift in the last two or three years in the business check writing habits of managers and owners. While the number of people using other forms of payment besides checks has been increasing, the number of businesses relying on paper checks as payment has steadily declined.

There are many reasons why paper checks for business use are continuing to fall. First, paper checks take a long time to go through the banking system. While electronic payments can hit a business’ bank account in a day or two, paper checks can take up to 10 business days to process. That is a lifetime for many small businesses. Second, paper checks are easy to duplicate given today’s technology. This means businesses that are still using paper checks are leaving themselves open to fraud because the account number is clearly written on the check. No one wants to lose money from their business due to fraud.

If you are tired of worrying about paper checks as a business owner, there is software available to help you move paperless payment systems. This has become even more important because many companies have a brick-and-mortar business as well as an online business. You need a payment system that can handle both. Here is more information and ideas for moving away from paperless checks.

 

Things to Consider With a Payment Processing System

When you begin thinking about moving to a paperless payment processing system, there are some criteria you need to consider before making the switch. First, how much will the paperless system cost your business? If the cost is too high, it does not make sense to switch from the system you already have. 

Second, will you have to sign a contract? Many business owners prefer software that allows them to try the service for a few weeks or a month for free. That way, they can decide if they like the service before they purchase it. 

Third, what kind of equipment will you need to operate the service? The less equipment your business needs to move to paperless checks, the better for your business.

Fourth, is there a customer support feature? You will want a service that allows you to contact customer service quickly if a problem arises. Finally, you need to know what forms of payment the system accepts. It needs to match the forms of payment your customers are familiar with.

Protea Financial Move Away from Paper Checks

New Payment Systems

In the past, payment processing systems came in the form of software you could download onto computers. While some payment systems have software downloads, many others are available as an app or as a subscription that is available via cloud technology. Small businesses find apps on phones or tablets helpful because they are able to view their balance sheets and payments from anywhere.

Here are three of the most popular payment systems for businesses if you want to move away from paper check writing.

 

Braintree Payments

One of the popular payment systems for small businesses is Braintree Payments. Braintree Payments began as an independent company, but they have since been purchased by PayPal, which gives them immediate name recognition and PayPal’s good security features.

There are a lot of positives if you choose to go with Braintree Payments for paperless check payments. First, Braintree Payments allow small businesses to take many forms of payment, such as PayPal, ApplePay, AndroidPay, Venmo, and Bitcoin, which puts this service ahead of many paperless payment services. Another great benefit of Braintree Payments is that the system can accept a monthly subscription payment, direct sales, service calls, online sales, and brick and mortar sales. No matter what kind of business you have, Braintree can handle the payments.

The paperless payment plan doesn’t charge a monthly subscription fee, and there are no minimum transactions your company must make monthly. Braintree charges a flat 2.9% fee plus 30 cents per each transaction. Braintree has the same amount of fraud protection as PayPal has, which is great for small businesses. One of the only downsides to Braintree is that the service does not accept American Express as payment.

 

Melio

Another payment system that is popular with businesses is Melio. With Melio you can pay invoices, but you can also receive payments from customers. Melio accepts credit or debit card payments for your invoices or sales, as well as ACH payments available as bank transfers. There are no setup fees for businesses that use Melio, and the payment system can be integrated with the Quickbooks system. You can see both incoming and outgoing payments with your phone or tablet as well as your laptop.

Melio allows you to grow the number of people who have access to your payment system as your business grows. This is great when you have multiple people handling your accounts payable or receivable. Melio charges the standard $2.90 fee per transaction. One of the reasons Melio is so popular is the ease of use. If you cannot figure an aspect of Melio out, customer service is around 24/7 to help you out. One of the only negatives about Melio is that it is not integrated with Zapier, which is a popular workshare application.     

 

Protea Financial Move Away from Paper Checks

Bill.com 

Bill.com is also very popular with businesses. Bill.com works well for both small and medium-sized businesses. The software to use Bill.com works through the cloud, so it is available to download onto a laptop. Like Melio, Bill.com allows you to pay your bills and receive payments for products or services. Bill.com has a budgeting program that gives you the ability to get credit for your business and continue to grow it. Bill.com takes ACH payments as well as international payments for products or services and requires a monthly subscription based on the size of your business. The company is tailored for companies who charge for professional services, such as bookkeeping, counseling or therapy, nonprofit organizations, and other service-oriented businesses. Bill.com can integrate with Quickbooks, Xero, Oracle, Sage, and Microsoft, which gives business owners a lot of options for integration as their businesses grow.

One of the downsides to Bill.com is the amount of the monthly subscription plan. However, if you need specialized accounting software for a consulting or other service-oriented business, Bill.com may be perfect for your needs.

 

Let Protea Financial Help Guide You Away from Paper Checks

No matter which paperless option you choose, you need to get with the future. Because businesses are constantly growing and changing, adding paperless check writing options is a great way for your business to advance with the times. To find out more about how going paperless could help your business, reach out to us here at Protea Financial today!

What is Gross Margin and Why is it Important?

What is Gross Margin and Why is it Important?

As a business owner, you understand how important bookkeeping is. The information a professional bookkeeper can provide will allow you to make informed decisions about your business. One piece of information your bookkeeper can provide is your company’s current gross margin or gross profit margin. Gross profit margin is a good yardstick for measuring how efficiently your company makes money from your products and services because it measures profit as a percentage of sales revenue. You can use your gross margin to compare your company’s profits to others that have different sales revenues.

 

Gross Margin Defined

Gross margin is the profit you’ve made after you subtract the direct costs of your products and services. It’s typically calculated as a percentage. A positive gross margin indicates that you have made back your costs and then some. A negative gross margin, on the other hand, means that it cost more to make your products than you made from selling them.

Essentially, the percentage is how much of a dollar you make as profit. For example, if your profit margin is 42%, you are making 42 cents for every dollar spent as profit. In other words, you spend $1 to sell your products, then make $1.42 from each sale. This means you paid back what you spent and made 42 cents in profit.

 

Protea Financial Gross Margin Outsourced Bookkeeping

Calculating Your Gross Profits

To calculate your gross margin, you first need to determine your gross profit. To do that, first add up all of your sales income. Next, add up all of your costs that are associated with manufacturing, procuring, and selling your products. Now that you have your gross profit, you can divide it by your total revenue. The resulting percentage is your gross margin.

Here’s an example. Say that your company made $100 million dollars in income. After subtracting out all of your expenses, you get a gross profit of $32 million. Divide 32 million by 100 million, and the result is 32%. That’s your gross margin.

 

Gross vs Net Profits

One important fact to remember is that gross margin is not your total profit. There are some indirect costs it does not take into account, such as taxes, licensing fees, and other expenses. Net margin or net profit deducts all of your expenses and costs from your revenue. It represents your true profit. Net margin, like gross margin, is very useful to business owners. Both percentages are useful when making decisions about your company.

 

What Information Can a Business Owner Gain from their Gross Margin?

Gross margin can provide business owners with a number of key insights that can be applied to maximize profits and minimize loss. First, it can tell you if your prices are too low, your costs too high, or both. If you have a very, very small profit margin, then you may not be charging enough for your products to fully offset your costs. You may also be paying too much for raw materials or for the manufacturing process.

Some businessowners make the mistake of assuming that just because their sales are good, they are profitable. Others may believe that their high gross profit margin indicates that they have good sales. Both of these statements can be true, but that’s not always the case. You may have thousands of sale transactions within a quarter yet still not be making a profit because your prices are too low or costs are too high. On the other hand, you could have a good profit margin yet not be making as many sales as you could be.

Knowing your gross margin will help highlight these issues. You may discover that you are making a very small profit even though it seems like your sales are good.

 

Protea Financial Calculate Gross Margin

How Gross Margin Can Help in Calculating Prices

When calculating your gross margin, you’ll also calculate your overall product costs. By looking at these numbers, you will be able to determine if you are selling your product for too little or too much. High sales but low profit margins may indicate that you are under-valuing the product. Low sales but a high margin could also indicate that your prices are too high.

A good bookkeeper will remind you that you cannot look at gross profit margins in a vacuum. There are many factors that can affect pricing, and you need to take all of these factors into consideration. The market sets the prices. If the market dictates lower prices, you will need to adjust your costs in order to meet those prices.

 

Gross Margin Also Provides Insight into Labor and Material Costs

In addition to looking at price, you can also use your gross margin to see what you’re spending on your products and services. New business owners may be surprised at how much they spend. If your gross margin is low but you feel that your prices are fair, there are two factors to consider. One factor is marketing, but that is a separate area of discussion.

In relation to gross margin, the factor you will want to focus on is your overall costs. Are you spending too much? You may want to consider alternative materials, new partners, or renegotiating current contracts to lower these costs and grow your business.

 

Who Should Pay Attention to Gross Margin?

All business owners should consider their gross margins on a regular basis, whether that’s monthly, quarterly, or annually. Small business owners can use gross margin to help them determine if they are pricing products correctly or if they could potentially save on costs. Marketing experts can look at gross margins to see if their marketing plans are meeting their goals. Even experienced business owners and bookkeepers can use gross margin to compare previous fiscal years and project their company’s growth over the next few periods.

If you have a bookkeeper, they can calculate your gross margin and help you understand what it means in terms of your profits, expenses, and sales. However, if you don’t have a bookkeeper, you run the risk of miscalculating your margin or not fully understanding how to use it to make financial decisions.

If you’re in need of a bookkeeper, Protea Financial is here to help. We provide bookkeeping, payroll, compliance, and inventory management services to wineries of various sizes. Contact us today with any questions or to discuss partnering with us

What Makes Wine Accounting Complicated?

What Makes Wine Accounting Complicated?

You may have only been drinking wine made in the United States for a few years, but people have been making wine in this country for nearly 500 years. American wine was an undervalued industry for decades, and it has only been in the last 50 years that people have really savored good wine made in America. If you are in the wine business, you already know that the winemaking industry is a different business, especially when it comes to accounting practices. Accounting for wineries and vineyards is difficult. To make things easier, you’ll need an accountant with experience in winery and vineyards, specifically. Anyone without that experience is more prone to making mistakes, which could lead to financial woes for you.

Two Types of Accounting in One Business

Most agricultural bookkeeping—whether with crops and crop rotation, produce, or livestock—is straightforward. Accountants in the agriculture business only have to keep one set of books. However, the wine making process is different in terms of accounting. In reality, there are two types of accounting going on at the same time in the wine business.

Protea Financial Cash Accounting

Cash Accounting

First, in accounting terms, vineyards—the fields where the grapes are grown—operates as a traditional farm. This means that farmer built arbors or trellises to hold the grapevines, planted the grapes, waited for them to mature, and harvested them. The farmer handles pesticides, replanting, and other issues with a vineyard. The farmer selects specific grapes to grow depending on the type of wine desired, the soil conditions, and the planting or growing season. Because vineyards are an agricultural crop, accountants can keep the books as a cash accounting business.

If the grower has a vineyard without a winery, the cash accounting method of bookkeeping is still acceptable because the crop is planted, grown, and harvested in a cycle that typically spans one growing season. Payments for the growing season occur at one specific time.

 

Accrual Accounting

Many vineyards are attached to a winery business. If you own both a winery and a vineyard, the cash method of accounting isn’t enough. Wineries must be measured on an accrual accounting basis. In accrual accounting, revenue and expenses are recorded in the books at the time of the transaction. Many wineries use accrual accounting as part of the bookkeeping process, because not all wine sells at the time of bottling.  A bookkeeper would record expenditures for wine barrels at the time of the barrel purchase. The wine that goes into that barrel may not be sold for months or years, at which time the bookkeeper records the revenue. Cash accounting is easier than accrual accounting, because expenses and revenues happen in the same growing season. Accrual accounting takes someone with far more knowledge of accounting practices.

Because of the operations of a winery with a vineyard, a wine accountant must be able to balance two books—using cost and accrual accounting practices—rather than a single ledger.

Protea Financial Accrual Accounting

Wine Production Has a Long Expenditure Capitalization Process

Not only does a wine accountant need to manage two books, they must also understand the long period of vineyard growth. Beginning operations as a vineyard is an expensive initial investment. After you purchase the land, you must pay for arbors or trellises for the grapes and pick the type(s) of grape you want to plant for winemaking. Grapes used in winemaking take several years to grow and become good wine producers. People who plant vineyards must be in it for the long haul, and not mind excessive spending with a return on investment in years rather than months.

Wine accountants know that to operate a successful winery, expenditures must be capitalized throughout the growing process. When commercial production begins, the accountant can begin to account for both expenditures and income on the ledger. Capitalization is important during the wine production process to allow the business room to grow without all of the expenses taking the operating and production capital out of the business when production begins.

 

Cost Accounting Is Different For A Winery

When an accountant uses the cost accounting procedure for a winery, they must use a non-traditional method. Two of the processes during making wine, crushing grapes and bottling the wine, take a short amount of time. That means the expenses or income happen quickly. However, two other processes for winemaking are long term. Wine is aged in barrels for a period before it is poured into a bottle. After the wine is poured into a bottle, it is aged again. Any costs incurred here happen over a period of months or even years. In fact, the higher grade a wine is and the more expensive it is, the longer the aging process takes.

 

Activity-Based Cost Analysis

In activity-based cost analysis, costs are assigned by wine type. That way, an accountant can figure the cost to produce the wine by the gallon or by the bottle. However, activity based cost analysis can get complicated for an accountant. Each wine has a different storage time, and this impacts cost accounting. Wine accountants must take shrinkage into consideration, as the volume of wine in a bottle shrinks during the aging or bottling process. A winery may sell some of the wine in bulk in the barrel or in the bottle before it is aged. Also, wineries may value inventory in different ways, including last in—first out, or by the dollar value of each bottle.

One other factor that wine accountants must take into consideration is charitable donations of bottles and the effect on inventory. Wineries are often asked to contribute bottles to charity auctions, and it is good advertising for any winery or vineyard. Because each bottle must be accounted for, a wine accountant must check inventory against a list of charitable donations of wine bottles.

 

Let Protea Make Wine Accounting Less Complicated – We Are Here to Help

Wine accounting is understandably complex, especially if you own or manage both a winery and a vineyard. If you are the owner of a winery and a vineyard, you want to find an accountant who is familiar with the bookkeeping and inventory practices of wineries. Don’t trust your accounting to someone who isn’t familiar with keeping books for the wine industry. When you need a wine accountant, contact Protea Financial, and let us help you keep the best books in the wine business. 

Cut Your Winery’s Operating Costs with a Winery Bookkeeper

Cut Your Winery’s Operating Costs with a Winery Bookkeeper

Operating a winery is a challenging job. It requires an in-depth knowledge of many aspects of growing produce. You need to understand your plants, keep your soil healthy, watch for signs of infection or pests, and know when your plants are ready to harvest. Then you need to harvest your grapes and go through the entire winemaking process. Once the wine is bottled, aged, and ready to sell, you then need to take on the marketing of your product.

As the owner, it is your job to keep track of all aspects of this business. You need to know your details readily, including expenditures and income. Not having accurate finances can cut into your bottom line. It can even cost you money instead of making a profit. Some business owners struggle with this aspect of their winery as they do not properly keep up with the numbers of the business. That is when outsourcing to a winery bookkeeper may be the best option to prevent your winery from taking a loss.

By outsourcing your winery’s bookkeeping to a bookkeeper who understands the wine industry, you can reduce your operating costs. There are several benefits to using an expert bookkeeper that make it worth the cost. By knowing your strengths and weaknesses when it comes to running your business, you know where to reach out to experts. This is one of the easiest places to seek help.

 

What Does a Winery Bookkeeper Do?

A winery bookkeeper can assist you with virtually any task related to managing your finances. They will oversee your accounts payable and accounts receivable. Plus, they work with clients to ensure that invoices are paid in a timely manner and communicate with vendors to make payments. They will also reconcile your monthly bank statements with your internal financial documents and coordinate with the bank if there are any issues.

Tax preparation is another task that a winery bookkeeper can assist with. Your bookkeeper can work closely with your accountant on your annual tax returns. They can gather much of the information your CPA needs, reducing the amount of work your accountant must do. This, in turn, can reduce the cost of your professional accounting services.

Depending on your organization, a winery bookkeeper may even take on tasks related to inventory or order tracking. Some even manage all aspects of the winery’s inventory. Your bookkeeper will also be a sounding board for financial decisions you need to make. They can provide expert advice on potential projects or expansions.

Where a traditional bookkeeper would have to take time to look up regulations or requirements, a winery accountant knows these things from experience. What that means is you pay for fewer hours hiring a winery accountant, but get more accurate and detailed financials as a result.

 

Protea Winery Bookkeeping Saves You Money

How a Winery Bookkeeper Can Save You Money

Using a bookkeeper instead of handling your finances yourself will reduce your operating costs in several ways. To fully understand where these savings come from, you must look beyond the cost of using a bookkeeping service. Here are some of the ways you can reduce your overall costs of using a winery bookkeeping service.

 

Focus Your Efforts Where They Are Needed

As the owner of the winery, you likely handle many different aspects of running the business. This often includes many or all your financial tasks. If you had an expert to handle that work, you would be able to refocus your efforts on tasks that only you can do. By giving you back some time, you can focus on earning more income for your winery in that time. Bookkeeping is not something that requires your personal attention, but making major business decisions is.

You can also leave all the bill paying to your bookkeeper. It is often their responsibility to ensure that your bills get paid, accounts are billed, and payments are received on time. They then track these expenses and income, providing you with more accurate budgets and insight as to how financially healthy your winery is at all times.

 

Prevent Costly Mistakes

Bookkeeping mistakes, even those that may seem minor, can have a large impact on your business. These mistakes can result in lost income, missed opportunities to save money, or even fines. A professional bookkeeper can catch many of these mistakes and correct them before it is too late.

Your bookkeeper can prevent other mistakes as well. They will ensure that your bills and incoming invoices are paid promptly, which helps you avoid late fees and keeping your professional relationships intact. They will also carefully watch your budget, so you do not over-spend. A good bookkeeper will also make certain that all clients are invoiced correctly and keep on top of unpaid invoices.

 

Reduce Overhead

Finally, by hiring a bookkeeper, you may be able to reduce some of your overhead operating costs. These include costs such as:

  • Office supplies
  • Office furniture
  • Technology-related costs
  • Other expenses that are necessary to operate a business regardless of what industry that business is in.

According to Intuit, overhead costs should ideally make up less than 35% of your total costs. Bookkeepers typically have an understanding of what a reasonable cost is for these products and services. They may be able to identify areas where you are overspending and move you to a different vendor or renegotiate your contract. This is one area you may not have ever found the time to focus on, but a dedicated bookkeeper can.

 

Turn to Protea Financial to Get Help with Cutting Your Winery’s Expenses

Interested in learning more about how a winery bookkeeper can help you reduce your operating costs? Contact us here at Protea Financial today with your questions. We will gladly explain to you how we can help cut your costs and give you back time to focus on what you do best. 

Starting with a Budget Can Help New Wineries Succeed

Starting with a Budget Can Help New Wineries Succeed

Starting your own winery may be a dream, but you must understand, with that dream comes expenses. Many who enjoy a glass of wine have thought about what it would be like to start their own winery. Starting any business is a challenge, and this is especially true in the wine industry. Thankfully, you can use our experience and expertise to help make this process easier. Here are some important notes for creating a winery budget in general.

What Goes Into a Business Budget?

If you want to be able to apply a business budget to a winery, you need to step back and look at what it takes to create a business budget. There are many steps involved in this process, but overall, here are the basics:

  • An outline of expenses (both fixed and flexible) and returns on a monthly or annual basis
  • One-off costs, such as equipment or software purchases
  • Projected sources of revenue outside of the product you plan to create, if any
  • A list of areas where the expenses may vary and guidelines

Ideally, you do not want to spend more than you make, but when you apply this to a winery, that is rarely the case to start. That is because wineries take time to make a profit. They need to mature before a harvest becomes available, so you need to budget for that time.

How a Budget Changes for Wineries

Your budget for a winery starts with the purchase of land in most instances. Rarely are you going to go out and buy a fully functional winery to start. Your upfront costs are going to include the land, plants, and the actual planting process. Your one-off costs can include any equipment you need on top of these costs, just to get off the ground. The cost of land is as cheap as it is going to be, so buying now is the best option, even if you cannot start your winery right away. The cost of one acre of land in California’s wine region is expected to climb to approximately $1,000,000 by 2050.

Down the line, you will need to factor in other costs, such as

  • Fermentation equipment
  • Harvesting equipment and labor
  • Equipment to make the wine itself
  • Bottling equipment
  • Storage facility
  • Licensing
  • Trademark
  • Wages for any employees
  • Branding following a label approval
  • And more

Your winery should be able to begin making wine in three to five years from when the land is planted. However, there are some deterrents to that timeline. You may struggle with crops due to limited water resources, frost, diseases that can damage plants, or even pests, and all of this only if your plans to plant are approved by the local government. All of this may slow your return. 

Also you need to consider that wineries are seasonal. That means you need to budget costs that you must pay all year, even if you only harvest or produce wine part of the year.

Tools to Help You Stay Financially Focused

There are many tools you have at your disposal to remain focused on keeping your finances in order. One of those tools is your budget. It gives you a reminder of where your money is coming from or going to at all times. However, that is not the only tool you can use. 

Setting up a spreadsheet may be a simple, yet effective way for you to visualize your flow of money. Most accounting software titles have something like this you can use. However, if you do not have one of those already, this is an inexpensive alternative. Just understand that you must be dedicated to adding in all the information you want to track. If you forget, you will have to go back, track down the information, and put it all in. 

Another tool you may want to use should be software to manage your inventory. You need to track your plants, their age and location, how much produce they provided, and more. This is an essential part of the winemaking process, since it will factor into how much you charge per bottle. 

Payroll is another aspect of starting a winery you must keep in mind. Unless your winery is incredibly small, you will need help. This means paychecks for the employees you hire. Payroll is more than ensuring they get their hourly wage, as there are taxes at the federal level, most states have state taxes as well, unemployment, Social Security, and more. These are numbers you must track carefully, as being wrong can lead to IRS penalties and fines. 

Protea Financial Starting with a Budget Can Help New Wineries Succeed

Why is Winery Accounting Important?

The best tool you have at your disposal to remain focused on finances as you start a winery is going to be a winery accountant. They understand what goes into starting a winery, they have experience in setting up and following budgets, and they can help with things like payroll and managing your inventory. They become a tool that minimizes your time requirements while also saving you money. 

Great bookkeeping is the backbone of any successful business. Many businesses believe that they can track the books themselves. Unfortunately, this can lead to missed expenses, incorrect payments, and a budget that does not cover everything it should. The best thing any business can do to ensure that the financials are always in order and nothing is overlooked is to hire a bookkeeper. 

By putting a professional in charge of taking care of day-to-day activities like your finances, you can then pay attention to any part of your winery that would require your specific expertise. You get peace of mind knowing that your employees will always be paid when they should be. Plus, you also have the security of knowing your taxes are correctly filed and all your documentation is current. Those are simple assurances you get when you hire a bookkeeper for your winery.

Winery Accountants Keep You Focused

Understanding the costs of running a wine business can help you create the most appropriate budget for your winery. Do you have everything at your winery insured? This is an expense that is overlooked at times, and that could lead to major problems down the line. It is vital you have everything insured if you want to run and grow your winery into a solid business. The insurance should cover both your equipment and your property.

When you begin having a harvest, you also need a winery accountant as they can help you determine your cost of making wine. If you sell the wine for too little, you may lose money. However, if you price it too high, then no one is likely to buy. You need to know the right amount to sell it for, and that should be based on the exact costs you have per bottle you create.

Turn to Protea Financial for Help with Your Winery Expenses

Wine is the drink of choice for many of us after a long day at work or just to warm us up on a cold winter day. For those who have considered starting a winery, make sure you have the right approach in mind. Focus on your budget and expenses from the start.

Making wine is a challenge, but those challenges become easier when you have the right tools. A winery accountant is a tool that is necessary if you want to truly succeed in your endeavor. You want someone that can use their experience and knowledge to help you push forward. You need someone you can trust to go through this experience with you.

Turn to the experienced winery accountants of Protea Financial. We can answer any question you may have on financials, budgeting, or accounting for your winery. We are here to help.