cbe16 - managing your inventory and production to ensure financial success
TRANSCRIPT
Mary Brettmann, CPA
Vickie Brennan, Investigator, TTB
Managing Your Inventory**And Production to Ensure Financial Success
WelcomeWe will be covering a lot of ground in this seminar.
Our goals:
Understand the basics of inventory
Know where to get started
Showcase cool tools for inventory and
production
Huge Benefit, Huge Hassle
Backbone of materials handling and forecasting
Give everyone the same playbook
Cost of mistakes grow with the company
Inventory
Keep track of everything that goes into the process
Raw Materials
Work in Process
Finished Goods
Keep track of what is sold
Finished Goods
Merchandise
What is Inventory?
Average Cost
FIFO – First in, first out
LIFO – Last in, first out
Actual Cost
Standard Cost
How is inventory valued?
Physical count – worksheets, excel file
Periodic accrual – Journal Entry balance based upon PI
Perpetual accrual – System keeps its own balance
How do you do inventory?
Possible obeer ipad count screen
Standards are important
Regular electronic backups
Proper sign off on the count worksheets
Important Internal Controls
TTB
Definition of Inventory
Requirements for Inventory
Must be taken at least once each calendar month and
must include:
Data Taken
Quantity of beer and cereal beverage on hand
Losses, gains and shortages
Signature, under penalties of perjury of the brewer or
person taking the inventory (as defined at 27 CFR 25.11
Executed under penalties of perjury).
Retain on premises, made available for inspection by TTB
officer
TTB Inventory RequirementsBrewery – 27 CFR 25.294
Production and Storage Accounts and Processing Account
(wines and bulk spirits) 27 CFR 19.312, 19.333, and 19.371. Must
be taken at the close of each calendar quarter and must include:
Date Taken
The identity of the container(s)
The Kind and Quantity of spirits, denatured spirits and wines
Losses, gains, and shortages
Signature, under penalties of perjury of the proprietor or person
taking the inventory (as described at 27 CFR 19.45 Execution
under penalties of perjury).
Retain on premises, made available for inspection by TTB
officer
TTB Inventory RequirementsDistilled Spirits Plant – 27 CFR 19.623
Processing Account (bottled and packaged spirits) 27 CFR 19.372: Must be taken at the return periods ending June 30 and December 31. 5 business days’ notice must be provided to TTB designating the date and time of inventory. The inventory record must include:
Date Taken
The Identify of the container(s)
The Kind and Quantity of spirits, denatured spirits, and wines
Losses, gains, and shortages
Signature, under penalties of perjury of the proprietor or person taking the inventory (as described at 27 CFR 19.45 Execution under penalties of perjury).
Retain on premises, made available for inspection by TTB officer
TTB Inventory RequirementsDistilled Spirits Plant – 27 CFR 19.623
Must be taken annually, typically June 30.
Monthly report of operations filers may select another
annual inventory period upon notice to TTB
Quarterly report of operations filers must select an
annual inventory period that begins on the first day of
a calendar quarter and notice must be filed with TTB.
Annual report of operations filers must take their
annual inventory as of December 31.
TTB Inventory RequirementsWinery - 27 CFR 24.313
The inventory record must include:
Description of wine and spirits, including anticipated marketing
identifiers such as vintage, varietal, or geographical designation
Type of wine (if other than grape), i.e., orange, apple, honey, etc.
Tank numbers. Barrels, puncheons, etc., containing the same
kind of wine may be summarized by type unless marketing
identifiers are noted.
Cases, bottles and other similar containers – the total volume
of one kind of wine may be entered as one item and
appropriately identified.
TTB Inventory RequirementsWinery - 27 CFR 24.313
The inventory record must include (con’t):
Summary: The volume of bulk and bottled or packed wine must
be totaled separately in wine gallons or in liters, by tax class, and
reported (in wine gallons) on the next required Report of Wine
Premises Operations, in addition to any spirits on hand.
Signature on the last, consecutively numbered page, under
penalties of perjury as described in 27 CFR 24.313€.
Retain on premises, along with the Report of Operations for the
period in which the inventory is taken, and make available for
inspection by TTB officer. Losses or gains must be reported any
time an inventory is taken and reported.
TTB Inventory RequirementsWinery - 27 CFR 24.313
What basic info can the system give me?
Reorder Points
Tank Utilization
Once you trust your system,
The Next Step is for it to Talk Back to You.
Tools for Inventory and ProductionPhase I reports
Reorder Point Alerts
What is the reality according to the system?
Inventory Stock Status Report
FUTURE Inventory Stock Status Report
Tools for Inventory and ProductionPhase II Reports
Tell me what will happen based upon a forecasted reality
MRP Module
Use it for Purchase Order Generation
High Level Forecasting
Forecast a shortage AND a solution
Tools for Inventory and ProductionPhase III Reports
Count Early and Often
Appoint Someone “Inventory Czar”
Consistency is Key
Be Curious
Make Changes and Count Again
Pointers for Taking the Next Step
Common Compliance and Audit Issues:
https://www.ttb.gov/beer/beer-
tutorial.shtml#_Production_and_Inventory
https://www.ttb.gov/spirits/common_compliance_tax_issues-during-
audits-ds.shtml#_B.1_Inventory_Issue
https://www.ttb.gov/wine/common_compliance_tax_issues.shtml#inv_1
TTB Resources – https://www.ttb.gov (Tools/Tutorials, Virtual Seminars and Online Training)
Beer Regulations: 27 CFR Part 25
Distilled Spirits Regulations: 27 CFR Part 19Wine Regulations: 27 CFR Part 24
Questions?
Thoughts?
Thank You
Vickie Brennan, Investigator
Alcohol & Tobacco Tax & Trade Bureau
(513) 684 - 2473
Mary Brettmann, CPA
Beverage Business Builders
(714) 227-1443