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Bookkeeping for the Tasting Room


Sonja

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Thanks to the recent changes in Illinois law and our local village ordinances, we have just opened our tasting room. Now, we are trying to figure out how to track and report all the transactions, while still reporting and tracking all the transactions on the manufacturing and wholesale side. We use Quickbooks, which I assume many people here do.

For those who have a tasting room, any suggestions or paths you have found (or errors to avoid)? Looks like we can set up a different company for the tasting room, that might be the cleanest but leads to duplicate entry. Or, we can try to track it all internally, but it seems messy that way also to ensure COGS, revenue, and taxes are all paid/collected at the proper points.

Any advice would be most appreciated!

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We don't, at least not yet. We have Quickbooks for manufacturing/wholesale only right now. Is that what you use?

Its one of the software options i was looking at, and pretty much decided on, but we have so few tasting room visits, we just work with cash. We have a friend with a brewery though, and im pretty sure thats the program he uses with great success.

Sorry if thats not much help.

I think you have to look at how much $ the tasting room will bring in to justify the cost of a program like that... or you might be able to upgrade your wholesale version to include the POS.. speak with a quicken rep about that.

It also offers credit card processing, returns, inventory tracking, etc. I believe they have a demo on the website you can checkout

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Yes, we're just not sure what our traffic will be like, so we've not yet made that kind of investment in software. I prefer to give it some time and see how it goes before we go with a formal POS system. We have set up to take credit cards, but are trying to figure out how to account for the transactions, and how to track inventory, etc. so that we can report properly at the end of the year. Maybe it's just a spreadsheet for now, or something, but I was trying to set it up so Quickbooks could hold at least some of the information, especially for sales tax reporting, etc.

Edit: Thank you for the reply, I appreciate the input!

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Yes, we're just not sure what our traffic will be like, so we've not yet made that kind of investment in software. I prefer to give it some time and see how it goes before we go with a formal POS system. We have set up to take credit cards, but are trying to figure out how to account for the transactions, and how to track inventory, etc. so that we can report properly at the end of the year. Maybe it's just a spreadsheet for now, or something, but I was trying to set it up so Quickbooks could hold at least some of the information, especially for sales tax reporting, etc.

Edit: Thank you for the reply, I appreciate the input!

Sonja, we use two programs at our distillery. Distillery use is Quick Books that tracks everything about the distillery. The store uses Quick Books POS, credit cards inventory of store pricing, scanner the works. I will give you more information tomorrow from work, have to eat now. Coop

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Thanks very much, gentlemen, and I'm sorry to have missed the call - I was out at a meeting with our distributors today and just got back. We are not going to implement a POS just yet. We are not sure how much activity we're going to have in the tasting room, and want to hold off making that kind of investment for now. So, we are putting together a system to keep track of things and trying to make it as straightforward as possible. For now, my biggest concern is within Quickbooks, how to track the inventories of the separate businesses, as well as transfers of revenue back & forth. Those would be issues even with a POS system, but perhaps easier since the system is built for that.

Looks like we can use "classes" in Quickbooks to track two different businesses, or perhaps we can set up 2 businesses under one umbrella. Still researching, for now.

Thanks again, I appreciate all the ideas and suggestions, as well as the offers of help.

-Sonja

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Don't use classes...or at least, I think it's more difficult to do that. I use manufacturing/wholesale edition and added a credit card swiper to it for like $99 bucks. it's been working great for the wholesale side and tracking assemblies as well as tracking retail sales. Very simple and it gives me lots of friendly reports to track sales.

I'd like to see it ring up more sales, but that ain't the software's fault. :)

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It actually seems like it might be not so bad with classes, one for the distillery and one for the tasting room. We can transfer inventory between classes, as well as revenue, and each can have their own inventory/pricing, etc. So I was (as least in theory) thinking it will help. We just upgraded to 2011 Manufacturing Premiere, and it allows full reporting/analysis by class, too. Essentially, we are otherwise the same as you - we added a credit card swiper so we can do CC transactions. It just seems like we need to track inventory/costs separately for the tasting room to really understand what it costs to run. And, our tasting room is unbonded, so we need to transfer bottles to it and trigger the tax. How do you handle that recordkeeping, is it something else that I might be missing? Is the tasting room just a customer of the distillery? We were contemplating that too.

Thanks for your advice, I appreciate it! And I know what you mean, each day we have our fingers crossed. So far, it's been great considering our small tasting room, but who knows?

-Sonja

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It actually seems like it might be not so bad with classes, one for the distillery and one for the tasting room. We can transfer inventory between classes, as well as revenue, and each can have their own inventory/pricing, etc. So I was (as least in theory) thinking it will help. We just upgraded to 2011 Manufacturing Premiere, and it allows full reporting/analysis by class, too. Essentially, we are otherwise the same as you - we added a credit card swiper so we can do CC transactions. It just seems like we need to track inventory/costs separately for the tasting room to really understand what it costs to run. And, our tasting room is unbonded, so we need to transfer bottles to it and trigger the tax. How do you handle that recordkeeping, is it something else that I might be missing? Is the tasting room just a customer of the distillery? We were contemplating that too.

Thanks for your advice, I appreciate it! And I know what you mean, each day we have our fingers crossed. So far, it's been great considering our small tasting room, but who knows?

-Sonja

To answer your question "Is the tasting room another customer" YES, absoultly. What I have is in the bonded area clipboards at each product. This is where I keep a daily record of what and how much product was put into bottles along with what size, 750, 375 ect. Each time I remove from distillery inventory we mark what was taken out, to where is was taken, distributor or retail, how many and what date. As you know bi-monthly taxes. This inventory is added to the store in POS as receiving it.

In our regular QB, a beginning inventory is applied. Each time we remove something from the bonded area it automatically deducts from other inventory, corks, capsules, bottles. Once a month we manually count every bottle of spirits to make sure count is correct. Sometimes we forget to mark a bottle down but this count is accurate to what is on hand. I never trust that the computer is right, so my manual count is what I pay taxes on. As to our tasting room being profitable, we take in from 50K to 60k a year so affording software is not a question. Coop

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It actually seems like it might be not so bad with classes, one for the distillery and one for the tasting room. We can transfer inventory between classes, as well as revenue, and each can have their own inventory/pricing, etc. So I was (as least in theory) thinking it will help. We just upgraded to 2011 Manufacturing Premiere, and it allows full reporting/analysis by class, too. Essentially, we are otherwise the same as you - we added a credit card swiper so we can do CC transactions. It just seems like we need to track inventory/costs separately for the tasting room to really understand what it costs to run. And, our tasting room is unbonded, so we need to transfer bottles to it and trigger the tax. How do you handle that recordkeeping, is it something else that I might be missing? Is the tasting room just a customer of the distillery? We were contemplating that too.

Thanks for your advice, I appreciate it! And I know what you mean, each day we have our fingers crossed. So far, it's been great considering our small tasting room, but who knows?

-Sonja

Sonja,

One of my clients is a rum distiller and we will be looking to implement in a similar fashion later this year.

There are two things to consider with using classes in QB Manufacturing edition. The first is the volume of transactions which you've already considered. The QB POS investment you can always make later when the tasting room deserves part to full-time staffing. The second thing to consider with classes is that you can only define them one way. For example you can use them for profit center reporting such as distillery and tasting, or you could use them for cost center reporting such as distillation, bottling, warehouse, etc. You get into trouble if you need both.

But if you stick with profit centers the setup is straight forward by enabling classes in preferences, setting up sales tax items (I believe lake county is 7% for merchandise such as t-shirts etc but would double check) and then entering the inventory items and pricing. You should think through the customer setup with the simplest option being a generic "tasting room customer." You also need to think how you can maintain an audit trail for credit card transactions if you go the generic route.

If you do decide to add your retail customers to quickbooks it does add time for the initial entry during checkout and you should make sure to select the customer type on their customer record to differentiate the retail vs. the wholesale customers.

The good news is that once you have your items (inventory / sales tax) and customers setup you can reuse them in QB POS if you decide to upgrade.

Hope this is helpful,

Rich

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Thanks Coop, it's helpful to hear how you're working it (and also how your tasting room is doing - so far, it's going great here, but we don't know what the long-term will look like yet - only open 2 weeks).

Thanks also Rich, that is very helpful. That's kind of the route I was finding my way toward, so I appreciate you confirming that for me. We should be fine with using the classes for our two profit centers, so I'll be off to setup the items, etc. on my next date with Quickbooks.

Thanks again! Now, off to get the bar ready for our visitors today.

Cheers,

-Sonja

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If you make your tasting room another customer you can't sell the wholesale inventory you sell him/her/it. That inventory is gone. You could open another business or class with that inventory, but that sounds painful each time. My solution may take some time to setup, but it's really, really easy in everyday transactions.

Here's how we track inventory.

We created the initial assemblies, a few of them. As you know, you can build assemblies in Premier Wholesale/Manu. It consists of 1 bottle, 1 label, 1 cork, 1 capsule, 1/6 case. For example, we call it Wholesale Vodka.

When we move product out of the bonded area to a bailment state where I need to see cases being moved but also need to know what I have in bailment, we created a assembly called West Virginia Bailment Vodka (or any state we sell into) where the assembled item is built from 1 cs of Wholesale Vodka. When I move product out of the bonded area and ship to WV, I build that number of cs and it automatically moves the product from the Wholesale Vodka Category to the WV Bailment Category.

When we sell in our retail store, I first have to sell a case to the state, they put the markup on it and sell it back to me. I then sell those bottles. I just sell them a wholesale vodka case (because I'm not moving inventory into the bailment system) buy back a retail case (another assembly I built) and then sell the bottles. Since you can choose how the items you buy are sold...you can buy cases and sell the bottles inside, it's really easy that way.

In 14 months of doing it, inventory, payment, etc has NEVER messed up. I've been using Quickbooks for about 10 years....sorta a love/hate relationship.

If this is as clear as mud, I'll help on the phone. It would be simple to walk you through it. Sometimes I'm not so clear when I type.

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Does what you are doing in WV really apply to the situation for a tasting room in Illinois as per the original poster? (Or Michigan, or others with a license that allows direct sales in a tasting room.) In that case, the items is moved from one status to the other, but it is not actually sold to the state? Or do I misunderstand what is required in Illinois?

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That is what we were thinking, as well, because we are not required to sell to the state here - you are correct on that point. I think we just essentially change the status on the items or transfer the inventory over to the retail store and trigger the tax, etc. that way. I will be working on setting it all up tomorrow, so I may have more updates as I work through it.

Thanks again, all.

-Sonja

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I was just trying to help....nothing more....and giving you my example of creating build assemblies and moving between inventory items. I'm not sure how it's done in Illinois because I don't sell there. I have used classes before and I think it sucks.

At some point, it seems the inventory needs to change status. If its the same item, of course you could use different price levels for the same item.

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I very much appreciate the help, John, and your comments spurred some discussion on our side about whether that approach was something we wanted to incorporate. I totally see the value in it, but it does add a level of complexity that we want to avoid, based on what we have done thus far. Everyone's comments have been very helpful, just in thinking through all the various complexities about how to track everything that must be tracked.

My impression is that you can move inventory between classes, and that the class functionality has been improved with the 2011 edition. That remains to be seen, as I am just about to embark on this project. I might be back and getting in touch if this doesn't work out!

Thanks again, all.

-Sonja

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