Manufacturing
Manufacturing companies, fabrication shops, and production facilities across the Treasure Valley.
The Industry
Most manufacturers struggle to answer a basic question. What does it actually cost to produce one unit of your product? The answer requires tracking materials from the moment they arrive at your dock, through the shop floor as work in progress, to the finished goods waiting for shipment. Each stage accumulates different costs. Material costs are usually clear enough, but labor allocation and overhead absorption are where the numbers get fuzzy. Without that clarity, pricing decisions are educated guesses at best.
Cash flow in manufacturing works against you. You pay for materials upfront, cover payroll every two weeks, and wait 30 to 60 days for customers to pay invoices. Money gets trapped in inventory sitting on shelves and work sitting on the floor. A busy shop can be profitable on paper while struggling to make payroll because the cash is locked up in production. The accounting needs to show not just profit margins but where the money actually sits at any given time.
Who This Covers
Who This Covers
Manufacturing companies, machine shops, CNC operations, metal fabrication shops, welding operations, plastics manufacturers, wood product producers, assembly facilities, and custom fabrication businesses throughout Nampa, Boise, and the Treasure Valley.
What Complicates It
What Complicates It
Three-stage inventory tracking for raw materials, work in progress, and finished goods. Labor hours allocated across multiple jobs or production runs. Overhead costs like rent, utilities, and equipment maintenance that need factoring into product costs. Equipment purchases requiring significant depreciation planning. Customers on net 30 or net 60 terms while you already paid for their materials.
What We Handle
Inventory accounting follows your materials through every production stage. Raw materials get recorded at receipt and reduced when they move to the floor. Work in progress captures the labor and overhead being applied during production. Finished goods reflect the complete cost of what you built. This tracking gives you accurate cost of goods sold and prevents inventory from becoming a mystery where money disappears. Monthly reconciliation ensures your books match what’s actually sitting in the shop and warehouse.
Job costing connects every expense to specific production runs or customer orders. When you quote a fabrication job, you should know what similar work actually cost you in the past. We configure your accounting system to capture material usage, labor time, and overhead by job. Tax preparation addresses opportunities specific to manufacturers. Equipment depreciation through Section 179 and bonus depreciation. Potential R&D credits for custom engineering and design work. Inventory valuation methods chosen based on your operations and tax situation. Our team of Enrolled Agents handles IRS questions directly if your deductions ever get scrutinized.
Job and Product Costing
Job and Product Costing
Every material requisition, labor hour, and overhead allocation tracked to specific jobs or production runs. Your accounting system configured to show true margins by product line or customer. Historical job data that informs future pricing and helps you identify which work is actually worth taking.
Tax Strategy for Manufacturers
Tax Strategy for Manufacturers
Equipment purchases structured to maximize depreciation when it benefits you. Inventory valuation method selected based on your operations and tax implications. R&D credits evaluated for custom design and engineering work. Enrolled Agents on staff who can represent you directly before the IRS if manufacturing deductions get questioned.
What Goes Wrong
Work in progress gets ignored in a lot of shops. Materials get consumed, labor gets applied, but nothing shows up in the accounting until finished goods are sold. The result is cost of goods sold numbers that swing wildly from month to month depending on when jobs complete rather than when work actually happens. The income statement looks great one quarter and terrible the next for reasons that have nothing to do with actual performance. Physical inventory counts eventually reveal discrepancies that should have been caught months earlier.
The bigger problem is quoting work without knowing true costs. You price a job based on materials plus a markup for labor, but you forgot to account for setup time, machine hours, quality inspection, scrap rates, and facility overhead. The job looks profitable when you land it. Six weeks later you realize you barely broke even once everything is tallied. Meanwhile, your competitors seem to win bids at prices you can’t match because you’re actually accounting for costs they ignore. This cycle keeps shops busy but never as profitable as they should be.
Inventory Tracking Gaps
Inventory Tracking Gaps
Raw materials counted but work in progress ignored entirely. Finished goods valued at material cost without labor or overhead. Cost of goods sold that jumps around based on job completion timing rather than actual production activity. Inventory counts that don’t reconcile to accounting records with no explanation for where the gap originated.
Pricing Without Full Costs
Pricing Without Full Costs
Jobs quoted using materials and direct labor only. Shop overhead treated as a fixed monthly expense rather than allocated to production. Products that appear profitable until you factor in machine time, setup, rework, and indirect labor. Winning bids that turn out to be losers once the job is complete and all costs are captured.
What Changes
You know what it actually costs to make your products. Every quote starts with real data from previous jobs and production history. When a customer pushes for a discount, you can see exactly how much margin exists to work with. When material costs increase, you know which product lines need price adjustments to protect profitability. You stop guessing and start making decisions based on numbers you trust.
Financial statements reflect what’s really happening in the shop. Inventory balances match physical counts. Cost of goods sold moves in proportion to production activity. Monthly reports show consistent trends instead of wild swings caused by accounting timing. When you need financing for new equipment, the bank sees a manufacturer with proper inventory controls and clean records. Tax returns capture every deduction you’re entitled to. Equipment depreciated strategically. Inventory valued correctly. R&D credits claimed if you qualify. Our Enrolled Agents handle any IRS correspondence so you can stay focused on running production.
Pricing and Bidding Confidence
Pricing and Bidding Confidence
Historical job costing shows what similar work actually cost to complete. Quotes include proper overhead allocation so you’re not subsidizing customers. Clear visibility into which product lines and which customers generate real profit versus those that keep the shop busy without building wealth.
Financial and Tax Clarity
Financial and Tax Clarity
Monthly financials a manufacturer can actually use to make decisions. Inventory accounting that holds up under scrutiny. Equipment depreciation maximized within the rules. Year-round planning so tax season brings no surprises. A team of Enrolled Agents who understand manufacturing and can represent you before the IRS when needed.
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.
