Accountants for manufacturers
Manufacturing ties up more money before a sale than almost any other business: raw materials, work in progress, finished stock and the plant that makes it. The profit for the year depends on how that stock is counted and costed, the cash position depends on how the equipment was financed, and which products actually make money rarely shows in a standard profit and loss. A general small business accountant can lodge the returns. Running a manufacturing business on the numbers takes a team that understands cost of goods properly.
New Wave works with manufacturers across the Gold Coast and Australia, from a founder in a single leased unit to groups with a production facility, an equipment entity and export customers. Manufacturers selling their own product online should also read the ecommerce page, and fabricators and joiners working mainly on building projects the construction page.
The questions manufacturers bring us
What the stock is really worth
For tax, trading stock is valued at cost, market selling value or replacement value, chosen item by item each year, and for a manufacturer cost means absorption cost: materials, direct labour and a fair share of production overheads. The method and the stocktake move taxable profit, so we set the costing up in Xero and check it before 30 June. Businesses under $10 million turnover can skip the formal stocktake where stock has moved by $5,000 or less.
Margin by product line
Margin by product after materials, labour time, machine time, freight and waste decides what to push, what to reprice and what to drop. We build it from the bill of materials and Xero tracking, or the inventory system that feeds Xero, and report it monthly as part of our virtual CFO work.
Equipment, depreciation and finance
Buying plant outright, under a chattel mortgage or on a lease changes the GST timing, the deductions and the balance sheet. A chattel mortgage lets the business claim the GST on the purchase in its next BAS and depreciate the asset; a lease spreads both across the payments. The small business instant asset write-off threshold has changed almost every year, so we confirm the current limit before the purchase, not after. Holding the plant in a separate entity that leases it to the trading company keeps it away from the trading risk. See business structuring and cash flow forecasting.
The R&D tax incentive
Developing a new product, material or process can qualify, but only where there is genuine experimentation with an uncertain outcome; routine development, quality control and production runs do not. Only companies can claim, eligible spend generally has to reach $20,000 for the year, the activities must be registered with AusIndustry within 10 months of year end, and records need to be kept as the work happens. We flag it early, set up the cost tracking and say plainly whether a claim is worth making.
Exports, imports and GST
Goods exported within 60 days of the earlier of payment or invoice are generally GST-free, provided the export paperwork is kept. Imported materials carry GST at the border, which the deferred GST scheme lets a monthly BAS lodger move into the BAS instead of paying upfront. Invoicing overseas customers in US dollars brings foreign exchange gains and losses into the accounts and the tax return, so we set Xero up to record them.
What the work looks like
- A designated team covering the manufacturing company, any equipment or property entities, and the owner’s personal and family position, on one monthly package agreed up front.
- Bookkeeping in Xero with stock, work in progress and cost of goods recorded properly and margin reported by product line.
- Tax planning in May with real numbers, not a tax return in October.
- Annual review of the stock valuation method, equipment finance and R&D position.
- Advisory for the next move: new plant, a bigger site, export markets, a partner or a sale.
Who we work with
Food and beverage producers, joinery and cabinet makers, metal fabrication and engineering workshops, packaging and printing businesses, and consumer product brands that make their own stock, across the Gold Coast, Brisbane and interstate.
Getting started
Book a FREE discovery call, 30 minutes with a New Wave team member. Bring your last financials and a rough cost to make for your top products. If it is a fit, a proposal follows within the week with the monthly package set out.