Food Production
You know the recipe. We figure out the real cost. Ingredient tracking, batch costing, and inventory done right for specialty food producers.
The Industry
Most specialty food businesses start the same way. You made something good. Friends asked for more. Farmers market customers kept coming back. What began as a hobby turned into something with real revenue. The problem is that making great food and running a profitable food business are completely different skills.
Idaho cottage food laws make it easy to get started from a home kitchen. But growth hits a wall. Commercial kitchen rental, state licensing, liability insurance, and proper food handling certifications all cost money. At some point you need to know whether your $8 jar of jam actually makes a profit after ingredients, labor, packaging, and facility costs are counted.
Who This Covers
Who This Covers
Specialty food producers, small-scale processors, bakeries selling wholesale, jam and sauce makers, spice companies, jerky producers, and anyone turning raw ingredients into packaged food products for sale.
The Transition
The Transition
Moving from home production to a licensed commercial operation changes everything. Rent, equipment, insurance, and compliance costs show up all at once. Without accurate financials, you cannot know whether scaling up is sustainable or a path to losing money faster.
The Process
We break down your costs by product and by batch. Ingredients fluctuate in price. Labor hours vary depending on the recipe. Packaging costs change when you switch suppliers. All of this affects your margin, and you need to see it clearly. We track these inputs so you know what each unit actually costs to produce.
Inventory accounting matters for food producers in a way it does not for service businesses. You have raw materials on hand, products in various stages of production, and finished goods waiting to ship. We value inventory correctly so your cost of goods sold is accurate and your financials reflect reality.
Batch Costing
Batch Costing
Each production run gets tracked. Flour, sugar, labor hours, packaging, and facility time all get allocated. You see the true cost of that batch of salsa or that day of baking. This tells you whether your current pricing works or needs adjustment.
Inventory Valuation
Inventory Valuation
Raw materials, work in progress, and finished goods all need proper accounting. We track spoilage and waste as part of your cost. Your balance sheet reflects what you actually have on hand, and your COGS is accurate when tax season arrives.
Common Problems
Pricing by gut feeling is common in this industry. You look at what competitors charge, add a little margin, and hope it works. The problem is you do not know your floor. If your true cost per jar is $4.50 and you sell for $6 thinking you have a good margin, but your competitor has lower overhead and a true cost of $3, you are both at different levels of profitability at the same price.
Tax rules for food products are not straightforward. Idaho exempts many food items from sales tax, but the definitions matter. Prepared foods may be taxable while ingredients are not. Selling wholesale to a grocery store has different rules than selling direct at a farmers market. Getting this wrong means either overpaying or facing penalties down the road.
Sales Tax Confusion
Sales Tax Confusion
Food taxation in Idaho depends on the type of product and how it is sold. We sort out what requires sales tax collection and what does not. This keeps you compliant and prevents you from either overcharging customers or underpaying the state.
Equipment Deductions
Equipment Deductions
Commercial ovens, mixers, refrigeration units, and packaging equipment represent significant investments. These assets need proper depreciation schedules or Section 179 treatment depending on your situation. Many producers miss out on legitimate deductions simply because they did not track purchases correctly.
What Changes
You stop guessing on prices. When you know that a jar of jam costs $4.12 to produce including ingredients, labor, packaging, and allocated overhead, you can price it confidently. You can walk away from wholesale accounts that want pricing below your floor. You can raise prices knowing exactly how much margin you need.
Growth decisions become clearer. You know whether moving to a commercial kitchen makes financial sense based on your current volume and margins. You can calculate what happens if ingredient costs rise 15 percent. Equipment purchases get evaluated against actual production data rather than hope.
Product Line Clarity
Product Line Clarity
Data shows which products make money. That labor-intensive specialty item might have the highest retail price but the lowest margin. You can decide to keep it because customers love it, or cut it because the numbers do not work. Either way, the decision is informed.
Tax Savings Captured
Tax Savings Captured
Every deduction gets found. Equipment is depreciated correctly. Inventory is valued properly. As Enrolled Agents, we handle your returns with the expertise to maximize savings and represent you if the IRS or state ever has questions.
The Treasure Valley's Tax and Accounting Team
The Next Step:
A Short Conversation
Tell us what you're dealing with. We'll listen, answer your questions, and give you a straightforward quote.
