Accounting for Vineyards and Wineries

winery accounting

Knowing which niche makes the most sense for your ambitions starts with ample research. Map out the pros and cons of the niches, including real estate investment trusts, that pique your interest. Determine whether this will be a side hustle with growth potential or your full-time career. You also want to look at the market landscape, such as zoning laws, rental vacancy rates and competition from new developments. Isabel is currently completing her Bachelor’s degree in accounting from Eastern Oregon University. Originally from Colombia, she relocated to California and attended culinary school, where she gained over a decade of experience in the restaurant industry before eventually settling in Oregon.

If you don’t meticulously assign these expenses, your financial statements won’t truly reflect how much it costs to produce each bottle. For example, if the area dedicated to packaging takes up to 30% of your total facility floor space, you can apportion 30% of your total rent and building insurance to package. Conversely, wine accounting utilities are usually broken down by actual consumption per production stage, unless all departments are using nearly equal amounts of energy. Take for instance a winery that has similarity and consistency across all departments and square footage allocation that reasonably reflects utilization derived by each department.

winery retail accounting just got easier

You can’t always foresee a hail storm that leads to a roof leak or a furnace that suddenly stops firing up. Unless you invest solely in real estate investment trusts, you’re going to be directly footing the bill. Neglecting maintenance items can also lead to legal woes with renters and potential buyers.

Here’s an example of how facility costs might be allocated to different departments based on the square footage they use. Additionally, a POS system reduces the risk of theft from within the retail operation. Cash is one of the most accessible areas for employee theft in a small business. Because the POS system tracks the amount of cash collected in the tasting room, daily reports can verify that the correct amount of cash was deposited into the bank.

Major categories of winery costs

The C corporation tax rate decreased to a flat rate of 21% from a maximum rate of 35%. With this change, business owners may want to evaluate if their current entity structure is still the most beneficial. We work closely with your tax accountant to provide all of the necessary year-end financials. We maintain wine costing by lot and SKU, and adjust inventory valuations monthly.

winery accounting

For more information on how to set up a COGS system for your winery, contact your Moss Adams professional. If you have questions or would like any assistance with finding solutions tailored to your winery, please contact your Moss Adams professional.

Valued Industry Perspectives

And on top of that, the winemaster might decide to engage in blending activities somewhere in the production process, which mixes wines together, and, of course, complicates the cost accounting. And, there can be wine shrinkage, where the wine evaporates while it’s aging in the oak barrels. And furthermore, the winery may choose to sell off some wine in bulk before it reaches the bottling process, so that a good chunk of the wine volume never makes it to the end of the process.

winery accounting

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