would posit that anyone from a dairy or a juice (company) or some other kind of background would fit in very well,” he said.
Finding the right software The best CPA with the best data available is going to have a long, uphill battle to try to apply standard accounting software to distillery tracking. It can quickly become unwieldy to try to calculate the actual cost of a product, given variations in yield, cuts and evaporation. “No accounting package out of the box deals with proof gallons as a finished product. A thousand gallons are now 950 gallons, but it's worth the same if not more depending on what I put into it. The software isn't really designed for that,” he said. “I have a master's degree and a CPA and I sat down, when I first started, with a spreadsheet. And after about four months, I thought, ‘This is ridiculous.’ Because of how fluid every batch of spirit is, you need the specialized software.” Most of the distilling packages on the market now will track those variations, whether yield was high on a mash, or a fermentation went wrong and deeper cuts were made, or a barrel sat near a sunny window and had higher loss due to evaporation. “What Whiskey Systems has, what I'm sure Distillery Solutions has, and the 100 software packages that have come out in the last couple of years, somebody is tackling that problem in some way, tracking the financial transactions and matching it to the proof
gallons. It's tracking it per distillation and per redistillation. You can even see if you bought the grain for all the same amount.” “Your cost of the spirit is constantly changing because it's a fluid that is being mixed and remixed and have different outputs every time you run the still. But that's where the software handles that. So you may have, at the end of a year, 100 barrels where you started with the exact same recipe but every single barrel has a slightly different value because it performs slightly differently.” A specialized distillery program is a complement to, not a replacement for, regular tax accounting software, though. “You just can't do it all in one software,” he said. “The proof gallons may have changed but your accounting system says you've got X amount of product, your distillery software says I have X amount of proof gallons. This is what I did and this is what I have to report to the TTB. So by making sure that your transactions equal in both systems you can run an effective distillery reporting software alongside your accounting software and not have too much complication. Knowing it gives you an edge. Tracking that data gives you the ability to make better decisions.”
Gabe Toth is lead distiller at The Family Jones Spirit House in Denver and Loveland, CO. A former craft brewer, his passion for fermenting and transforming ingredients also extends to sausage and meat curing, cheesemaking, and pickling. He can be found up in the mountains or at email@example.com.
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