Bookkeeping for Manufacturers
In manufacturing, your profit spends most of its life disguised as raw material, then as work-in-progress, then as finished goods gathering dust in a corner. Books that can't follow that trail can't tell you if you're actually making money.
Your profit is hiding in inventory
Manufacturing accounting has a plot twist most owners learn the hard way: cash goes out to buy raw materials long before it comes back as a sale, and in between it sits as inventory in three different states — raw, work-in-progress, and finished. If your books just expense materials when you buy them, your P&L will lurch around like a drunk and tell you nothing true about a given month.
Cost of goods sold has to match the products you actually sold, not the materials you happened to purchase. Get that timing right and your margins stop being a monthly mystery.
Gross margin by product line, or you're guessing
One blended margin across everything you make is barely better than no number at all. The whole point of clean manufacturing books is seeing which product lines earn their keep and which ones you keep making out of habit and misplaced loyalty.
That's the difference between raising a price, dropping a SKU, or renegotiating a supplier — and just working harder at a product that was never going to pay. We build margin by line so those decisions are obvious instead of brave.
How Kaizen runs it
We track inventory across raw, WIP, and finished goods; tie cost of goods to what actually sold; and build gross margin by product line. Supplier bills get coded properly, resale certificates and sales tax get handled, and a documented monthly close produces the same reports every period.
We're named after kaizen — the continuous-improvement philosophy that started on factory floors. Applying it to your books instead of your line is either poetic or on-brand, depending on how you feel about accountants. Either way, each close gets a little sharper.
What's included
- Inventory tracked across raw materials, WIP, and finished goods
- Cost of goods matched to units actually sold, not just purchased
- Gross margin built by product line, not one blended number
- Supplier bills coded to the right materials and jobs
- Resale certificates and sales/use tax handled correctly
- Bank and credit-card reconciliations every month
- A documented, same-date month-end close
- 1099 tracking and a monthly data-quality scan
Pricing
Straight answers
Do you actually handle inventory and WIP, or just cash-basis it?
We handle it properly — raw, WIP, and finished goods, with COGS matched to what sold. Cash-basis bookkeeping on a manufacturer is how a good month and a bad month end up looking identical.
Can you give me margin by product line?
Yes, and it's usually the most valuable thing we produce. Margin by line is what tells you which products to price up, drop, or leave alone — decisions a blended number can't inform.
We use a separate ERP / inventory system. Do you work with it?
We reconcile the accounting to your inventory or ERP system so the two agree, rather than keeping a second set of numbers that quietly drifts. If you're on spreadsheets, we'll help you outgrow them.
We're a tiny shop with simple inventory. Overkill?
Could be. If you buy materials and ship product in the same month with little WIP, a solid general bookkeeper may do fine. The value shows up when inventory and WIP get big enough to hide your real margin.
Related
Free 20-minute books assessment
We'll show you the five things we'd fix first in your books — useful whether you hire us, hire someone, or do neither.
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