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Craft Brewery
report includes sub-totals for each major P&L cate-
gory: sales, margins, operating expenses and profit
or loss.
The simple P&L shows the summarized results for
a period of time (Year to Date, in this example) and
presents each category as a percentage of sales.
P&Ls don’t need to be five or ten pages long to be
good. In fact, shorter is better. Shorter is easier
to read and makes it more likely that you actually
will read the report. Start with a summary P&L like
this one, then expand the report by adding more
details. Here’s an example:
This P&L shows sales, cost of sales, and margins
by package type. This type of presentation makes it
easy to see the margin percentage by package type
(kegs, cans or bottles) which is useful in analyzing
portfolio profitability.
An alternative to this P&L is to present the infor-
mation by line of business. This might include sales
through the taproom, self-distribution and whole-
sale distribution. Regardless of which method you
use, it’s helpful to mirror the sales categories within you can use to make sure your numbers are com-
the cost of sales and margins categories. For exam- plete and accurate. A process is defined as a series
ple, have a separate account for taproom sales,
taproom cost of sales, and taproom margins.
Financial literacy is the ability to read and under-
stand the numbers of your brewery business so
that you can improve financial results. The income
statement, balance sheet and statement of cash
flows are reports that summarize those numbers.
Each report gives you different information about
the business, and each is important to review on a
regular basis.
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Brewery Chart of Accounts
Accountants use the term Chart of Accounts to
describe the listing of all the things you want to
track and report on in your business. These include
all of the assets, liabilities, revenue and expenses.
The purpose of this listing is to provide organization
and structure for your financial reporting. The Chart
of Accounts serves as the building blocks of your
financial statements.
The level of detail in your chart of accounts listing
will depend on how much information you want to
see on your financial reports. For example, you may
have three different sales accounts, as shown earli-
er: Sales-Kegs, Sales-Cans, and Sales-Bottles. Each
captures the sales specific to a type of package.
Alternatively, you may have any number of dif-
ferent sales accounts to show sales by market and
package type. For example, Sales Self-Distribution
Kegs, Sales Self-Distribution Cans, Sales Self-
Distribution Kegs, etc.
Be purposeful about the level of detail in your
chart of accounts. More detail may be preferable,
however this will take more time for your book-
keeper to record the transactions into the proper
accounts. Start with the kind of reporting you need
to see in your financial statements and build the
chart of accounts accordingly.
For an example of a full brewery chart of
accounts, visit www.craftbreweryfinance.com and
enter chart of accounts in the search box.
Brewery Financial Month-end Process
We’ve covered the basics of how to read the
financial statements and understand the chart of
accounts. Next, we’ll review a month-end process
of steps, followed in order, that will lead to the
right outcome. In this case, the right outcome is
accurate numbers in the financial reports.
The month-end process should be clearly written
and used as a document to train your bookkeeping
staff. An accounting manager should periodically
audit the work of staff to ensure that the process is
being followed.
The process can be presented in the form of a
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