Like many industries, food industry folks can benefit from some simple yet effective strategies that stress organization and efficiency. Food industry companies don’t have an easy time of it. So while these ideas may seem tedious or pesky, they can make your food production or food and beverage business more profitable and less stressful in the long term. Some of these food industry accounting efficiencies are “one and done!” Others require more time and attention, but they are all incredibly helpful in making sure you’re on top of the financial part of your business.
If you bill monthly, you will likely have to wait longer to get paid. Think about billing more frequently, even daily (like some big companies), to shorten the time between when the bill goes out and when the check comes back.
Payment Due Upon Delivery
Have customers pay upfront whenever you can. Make sure you are equipped to take credit cards to help in this regard. If they just can’t pay upfront, you can offer them some relief – 50% now, 50% in 2 weeks, or some other flexibility. But make it the rule, not the exception to be paid immediately. And make it clear to new customers that this is your policy, so they can be prepared for it.
Inversely, you might need or want to get longer terms when you’re paying vendors. If the typical 30-day doesn’t work for your business, see if you can negotiate 60 or 90-day terms. Cash flow can be an issue in many food industry business. If yours is one of them, ask your vendor for some special consideration. You won’t know if you don’t ask.
Receipts, receipts, receipts
Your accountant (or your future self) will thank you for keeping your receipts in a neat and organized manner. First, photocopy them. You know how they fade or smudge? You don’t have to worry about that if they’re copied. And if you copy them onto a full sheet of paper, they fit better in a file folder (or multiple file folders, for organizational purposes), and you have room for additional notes, categories, etc.
So don’t be afraid to change a process simply because you’ve “always done it that way.” Change is the only constant in life and business, so embrace it! Look to other successful food manufacturers and food production companies for different ways of thinking and doing. Try out some food industry accounting efficiencies – like the ones above. If they don’t work, you can always change them!