Instructor: Mary Brettmann
Start Date: TBD
This course focuses on how to understand what’s happening with your business and what the books say. You will use your understanding of costing or cost accounting to work with your margins—those differences between what it cost you to brew your beer and the cost to the consumer. Distributing breweries and self-distributing breweries will have different considerations, and we’ll help you navigate whichever road you choose.
You will learn how to calculate margins, identify true fixed costs, and learn how a brewery can improve their profitability using operational benchmarks and regular reporting. You will explore cash flow and learn how to create and maintain a cash forecast to predict bank balances in the short and long term. You will also determine key ratios for your brewery and identify benchmarks to improve your cash flow. “Cash is king,” and you want to ensure that you can purchase the next batch of ingredients, pay your bills, and avoid credit trouble.
Finally, you will calculate both gross and net burn rate to determine how quickly your cash pool is depleted and explore best practices to manage your working capital.
By the end of this course, students will be able to:
- Calculate gross, operating, contribution, and net profit margins
- Identify actions to improve gross margin
- Create and maintain a cash forecast and know the difference between a cash flow statement and cash forecast
- Determine key ratios for brewery finances
- Set benchmarks for activities that generate the fastest cash inflows and utilize best practices
- Calculate gross burn rate and net burn rate
- Manage working capital
- Ability to get good data from whatever accounting system you use
- A basic understanding of accounting data (e.g. chart of accounts, effective period close and financial statement review, bank statement reconciliation, how a budget becomes a forecast, how forecasts work together)
- Ability to generate an effective costing methodology for beer production and other operations (bill of materials (BOMs), fixed and variable costing, budgeting)
- Brewery accounting staff
- Brewery owners
- Breweries in planning
- Financial professionals who service breweries