Business Sense
THE LANGUAGE OF BUSINESS Accountant-turned-distiller Béla Náhori offers insights on his former trade. Before he and his family opened ChainBridge Distillery and started making brandy in Oakland Park, Florida, Béla Náhori worked as an accountant in Ohio. We checked in with Náhori recently to discuss insights into accounting best practices for those in the craft spirits business. What type of accounting work were you doing before you launched ChainBridge? How long were you doing that work? Béla Náhori: Before launching ChainBridge Distillery, I worked at Grant Thornton, an international public accounting and advisory firm. I worked in their national tax strategic solutions (NTSS) team with a focus on national tax training development. I also helped launch the newly developed shared service center in Bangalore, India. Prior to Grant Thornton, I was a tax accountant at a regional public accounting firm in Cleveland, Ohio. How does your previous work in accounting benefit your career as the owner of a craft distillery? Being part of a small group (NTSS) who was in charge of the entire national tax group at Grant Thornton helped me to learn how to balance wearing many hats. Owning a small craft, family-owned distillery, I wear the hat of a distiller, marketer, running the tasting room, distillery tour guide, product development, accounting, purchasing and so on. Is accounting in the spirits world remarkably different or the same as accounting in other industries? Understanding the fundamentals of accounting is imperative to all business owners. The most complex accounting for a distillery is inventory and cost accounting, similar to any industry that has three categories of inventory—raw materials, work in process (WIP) and finished goods. At our distillery, the cost of each batch is different. It is very important to track the cost of your raw materials. For us the biggest costs are the cost of fresh fruits and
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vegetables. The brix values of the fruit/vegetable, fermentation results or even outside temperatures—all could affect the cost of the product. It is very important to track the value of your inventory. Are you currently doing all of the accounting work for ChainBridge? Currently, all the accounting and tax work at ChainBridge Distillery is done in-house by me and my wife, Katie, who is a CPA. Her being on the audit side of accounting, she tackles the monthly bookkeeping in order for us to have accurate records for cost and completing our federal tax return. She is still in practice for a regional public accounting firm. Based on my prior work experience, I am responsible for any tax accounting including federal and state excise tax returns, state sales and use tax, state reemployment tax and TTB reporting. Her being on the audit side of accounting and me being in tax gives us a great balanced duo. For startup distillers who are considering tackling accounting on their own vs. hiring a person or a service, what advice would you give to them as they get underway? Make sure you invest in an inventory system that tracks your cost of goods in detail early in the startup process. If you lack the fundamentals of accounting, I highly recommend hiring a professional to keep your records current and don’t fall behind the required reporting. What types of qualities/attributes should distillery owners look for in an accountant or accounting service? Distilleries should look for someone that is experienced in tax reporting, inventory accounting and cost accounting. What are the most common accounting mistakes or potential problems/issues/ considerations that distilleries should look out for?
The Náhori family and team at ChainBridge Distillery, left to right: Béla, Katie, Agnes, Béla and Monika.
Distilleries should invest in inventory system that tracks cost of goods sold. Without detailed cost accounting, it is hard to determine the real cost of the product and know if the product is profitable or not. Another, common accounting mistake someone could make at the beginning is forgetting to factor in the cost of direct and indirect labor cost. The cost of labor could be one of the biggest expenses a distillery could have. It is important to accurately track your WIP, which should include labor and overhead costs. Are there any important trends in accounting that distilleries should be aware of? Or any resources you would particularly recommend? Distilleries should make sure to do the proper research to determine what inventory system best suits them and their distilleries. Make sure the software covers distillery operations, distributor or tasting room fulfillments, average unit cost or total inventory cost. ■
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