In a rapidly evolving industry, you need a team of chartered professional accountants who specialize in manufacturing and distribution accounting and tax advice — not a one-size-fits-all accounting software. We help you make the best decisions for growth, consolidation, or the restructuring of your business.
Manufacturing Accounting Experts
Our team of chartered professional accountants have extensive experience providing accounting solutions and tax planning advice to importers, supply chain management, logistics, transportation, warehousing, manufacturing, and distribution companies of all sizes.
Contact our team to develop a strategy that helps you focus on long-term growth and profitability.
Why work with accounting experts?
We understand the daily challenges and critical risks inherent in any manufacturing and distribution business and can tailor custom solutions (unlike the leading accounting software) to help keep your business profitable and ahead of the competition.
Our manufacturing and distribution accounting services can help your company:
- Develop profit enhancement strategies
- Calculate manufacturing overhead
- Increase productivity
- Maximize margins
- Identify areas of improvement
- Manage and assess risk
- Protect assets
- Create and build long-term value
- Ensure corporate tax compliance (T2)
- Develop effective job costing
- Secure financing that requires additional compliance (in the form of a review or audit)
- Track assets and liabilities
- Understand its worth with a business valuation
- Develop transfer pricing
Get in touch with our accounting experts today to get started.
Optimize Your Company’s Corporate Structure
To maximize your earnings and minimize taxes, we help set up family trusts and holding companies for your manufacturing and distribution business. Here’s how it works:
- Invest excess funds: rather than hold funds in the operating company, we help set up a holding company for corporate beneficiaries to allow business owners to keep their savings separate from the operations.
- Extract money tax efficiently: we use different tax strategies to take out money from the corporation at capital gains tax rates rather than dividends or salary/bonus.
- Creditor proofing: we take out money from the operating company and loan it back on a secure basis. For example, an operating company (OPCO) could have significant funds that should be transferred to a holding company. A holding company has a secured position, so if the OPCO goes under the holding company has first right to those funds.
- Capital Gain Exemption and Purification: stripping out retained earnings in a manner that allows business owners to benefit from their capital gains exemption and keep the business sale-ready. This process helps keep the business lean and prepared for sale.
Let us help your business reach its full potential. Get in touch to start optimizing your company’s structure.
Our Accounting Services For The Manufacturing & Distribution Industry
We offer customized solutions tailored to operations that face external pressures on price and timelines. Whether you are starting a new venture, planning to establish a Canadian operation, or operating a family business, we have the scope and experience to support your business.
Our accounting services include:
- Developing working capital management strategies
- Operational performance reviews and process improvement
- Cash flow analysis
- Production and inventory control management
- Profit enhancement strategies
- Management control and reports
- Strategic tax planning
- Tax credit possibilities
- Schedule of cost of goods manufactured
- Managing manufacturing overhead costs
- Financial analysis and reporting
- Strategic business advice
We are agile, entrepreneurial thinkers and creative decision-makers not encumbered by national firm procedures and policies, and our team has the bench strength to guide you through growth, consolidation, or restructuring.
Talk to our team about your business needs today!
Who We Work With
Our Manufacturing & Distribution Practice Group aggregate experience over time and from very different enterprises to provide tailored guidance to each client. We work with:
- Manufacturing and distribution entrepreneurs of both domestic and international products
- Large and small companies who work in, or are new to, the manufacturing space
From HVAC Wholesalers to Steel Fabricators, we have expertise that will help your business not just survive, but thrive.
We Can Help
Contact us today to learn how our manufacturing and distribution industry experts can help your business succeed!
When your manufacturing overhead has a debit balance, it means that your incurred costs are more than the standard costs. For example, if your labour is budgeted at $25 an hour and the actual cost incurred is $30 this will result in an unfavourable variance. This cost matters in the event it was not budgeted on the bidding process.
The primary costs for manufacturing businesses include:
- Cost of material
- Overhead (e.g. Amortization, utilities, rent, supervisor salary, insurance)
Other costs can include intellectual property and software related to designing and engineering products in addition to the entire manufacturing process.
Yes, these costs may qualify for claims under the Scientific Research and Experimental Development Tax Credit (“SRED”) provided by the Canada Revenue Agency.
Standard costs are a set value that is calculated and used for the valuation of inventory components during the manufacturing process. A standard cost includes items such as direct material costs, direct labour and an allocation of manufacturing overhead. As a product is manufacturing, the standard costs at each stage are applied to the item to build up its actual calculated costs. This is a more efficient way to value manufactured items since the individual tracking of costs by project would be costly.
Yes, we have cross-border expertise and have worked with many manufacturing companies who focus on exports outside of Canada.
Manufacturing companies typically have three accounts:
- Raw materials,
- Work in progress, and
- Finished goods.
Under generally accepted accounting principles, inventory is categorized as an asset but it really is a collection of costs which, if not managed properly, can significantly impact profitability and cash flow.
Proper tracking of inventory along with its costing is critical in managing both your costs but also driving decisions related to pricing strategy. In addition, excess or old inventory is a drain on cash flow which is a critical driver in all businesses.
From an accounting point of view, direct labour is included in the cost of goods sold and, as a result, tends to be viewed as a variable cost. In reality, direct labour is becoming less and less of a variable cost compared to decades ago (or even a few years ago).
With the current state of the labour market along with employment laws, a company’s ability to adjust its direct labour costs is very limited. As a result, this cost is starting to look more and more like a fixed cost. Companies can limit their exposure to this cost through better scheduling, automation, and process improvement.
No, producing larger batches won’t always reduce your costs. Companies determine standard costing models to apply overhead costs, but in reality, your overhead doesn’t change enough. Therefore, this results in an over-absorption of costs to inventory, storage, tracking, and the possibility of writing down the value of inventory based on ageing.
Having a better handle on the cost of inventory matched with cash flow considerations may provide a better guide for manufacturing decision-making.
Our team of chartered professional accountants (CPAs) work with clients across Southern Ontario, including:
- St. Catharines