Like all industries, bookkeeping in manufacturing businesses is challenging.
On occasion, owners of these businesses fail to acknowledge the need to update their books because they’re all too busy handling the daily operations.
But failing to organize the books is a disaster waiting to happen.
Manufacturing facilities especially are usually struggling to keep up with the demand.
There’s a constant need to improve operational efficiency and production cost to earn profit.
But the lack of a proper bookkeeping strategy leads to unnecessary spending, thereby affecting your business’s profitability.
Working with an experienced bookkeeper offers the chance of straightening your financial records after all these years of casualness and disinterest.
You establish control over costs, improve operational efficiency and enhance your profitability.
A bookkeeper also keeps your manufacturing business out of the prying eyes of local regulatory agencies by regularly updating your company data and submitting reports on time.
Hire A Bookkeeper When Your Manufacturing Business Expands
An entry-level or start-up manufacturer must hire a part-time bookkeeper as soon as it starts operations.
If your business is already up-and-running and successful, then it’s time to hire someone on a full-time basis.
Bookkeepers who work on a full-time basis are more proficient with their job.
Be sure to pick one with extensive knowledge about the manufacturing industry and be ready to assist during emergencies, i.e., accounting system failure or data loss.
Manufacturers fail to maintain adequate bookkeeping records because the ones running them don’t have the time or knowledge to handle the responsibility.
A seasoned bookkeeper will ensure your manufacturing business receives the correct information on time.
They help you maintain good working relationships with investors and regulators through effective reporting of financial results.
Accounting System Development
Manufacturing businesses incorporate a variety of systems to facilitate day-to-day operations.
At the very least, you employ an accounting system for bookkeeping purposes.
You may also have additional software that streamlines your production workflow and material tracking procedures.
A good bookkeeper will take note of these systems when setting up your accounting system.
Among the key areas, they’ll examine your data storage methods, document formats and its location within the company’s premises.
Having a full-time bookkeeper on your side means you have someone who’ll ensure that your business complies with industry regulations.
Checks And Balances For Each Production Department
Many manufacturing businesses fail to maintain separate checks and balances for each production department because they still use manual accounting systems.
Such systems fail to identify operational inefficiencies and bottlenecks until it’s too late.
Hire a bookkeeper who works on developing a customized accounting system that allows for easier identification of inefficiencies and bottlenecks to implementing corrective actions immediately.
Keep Up With Changes
Manufacturing businesses find it challenging to stay up to date with the latest accounting developments.
They’re forced to implement accounting solutions that eventually become obsolete due to new software releases or industry updates.
Those businesses who hire bookkeepers find it easier to keep up with these changes since they have someone on their side updating their systems accordingly.
Part of the job is to assist management and staff with any clarification needed for accounting operations.
A well-versed bookkeeper helps your manufacturing business avoid mistakes that could potentially lead to exposure to regulatory agencies or loss of investors’ confidence.
Even well-established businesses fall into the trap of not having their books updated, eventually losing backers and investors along the way.
Recently, online accounting systems have gained popularity among many businesses and small-scale manufacturers.
But it’s not everyone’s cup of tea.
If this is the case with your company, then it’s time you hire a bookkeeper to assist you in setting up an online accounting system. You can also retain the same bookkeeper to perform data entry and reporting duties on a regular basis.
Meticulous Recording Of Financial Transactions
A bookkeeper who understands the manufacturing industry will take note of a company’s production schedule and work on accounting solutions that fit its operational needs.
Every transaction must be recorded immediately after it happens, whether your financial transactions involve cash or other tangible goods.
For many business owners, recording invoices is still done manually, but it could have an adverse impact on the company’s cash flow.
Experienced bookkeepers solve this predicament by using automated invoicing software; this ensures your business receives payments on time.
They’ll also help streamline your accounting process by implementing methods such as batch posting transactions for quicker processing of your financial records.
Access To An Accountant When Needed
Most bookkeepers have an accountant on standby in case their clients run into accounting-related issues.
Remember that bookkeepers are responsible for recording, but they can’t provide the correct information or knowledge that will help you solve your business’ financial problems.
You need an accountant who’s specialized in manufacturing businesses to assist you with such critical matters.
They’re also well-versed in regulatory requirements and how to comply with them. The last thing you want is to break regulations without you knowing it.
What Bookkeeper Should You Hire?
When you interview prospective bookkeepers, ask them about their experience with companies like yours. Discuss the type of accounting software they use and ask them what they bring to the table.
Don’t forget to inquire about the bookkeeper’s experience with software, hardware and databases – this is crucial for traditional accounting systems and cloud-based storage for your records.
If you need help with your bookkeeping in manufacturing, then please give us a call and we’re happy to help. We have packages that align with your business goals and budget so get in contact today!