Manufacturing Services GroupNortheast Ohio is known for its history of manufacturing. For 30 years, Corrigan Krause has been assisting manufacturing companies and their leadership through the formulation of strategic plans and approaches, helping our clients realize their business goals.
The Experts in Manufacturing & Distribution Services Accounting and Consulting
Corrigan Krause continues to help companies of all sizes to operate at their highest level of efficiency – during times of sustained production and times of rapid growth. We do this by understanding the many challenges the manufacturing industry faces, including: customer demands, technological advances, changing tax regulations, capital expenditures and global competition.
We’ll work with you to develop a system which works within the fluctuating manufacturing cycles, stimulating more cost-effective runs and continued growth within your business.
Choose a Firm that Specializes in the Manufacturing Industry
Manufacturing accountants play a vital role in helping manufacturing and distribution companies maintain financial health, comply with regulations, make informed decisions, achieve long-term financial success, and more. Our team's expertise is invaluable in managing the financial complexities unique to the manufacturing industry.
Manufacturing accounting, also known as cost accounting in the context of manufacturing businesses, differs from general accounting in several ways. Manufacturing accounting focuses on tracking and analyzing the costs associated with producing goods, whereas general accounting deals with the broader financial activities of a company. Here are some key differences between manufacturing accounting and general accounting:
Manufacturing accounting places a strong emphasis on tracking and allocating costs related to the production process. This includes direct materials, direct labor, and manufacturing overhead costs. General accounting, on the other hand, is more concerned with recording overall financial transactions, such as revenue, expenses, assets, and liabilities, without a specific focus on the production process.
In manufacturing accounting, costs are categorized into three main elements: direct costs (materials and labor) and indirect costs (overhead). These costs are allocated to specific products or production orders. General accounting deals with a broader range of financial elements, including income, expenses, assets, liabilities, equity, and various income statement and balance sheet items.
Manufacturing accounting employs methods like absorption costing or variable costing to determine how inventory costs are allocated to products. This is crucial for calculating the cost of goods sold (COGS) and the value of ending inventory. General accounting focuses on the periodic valuation of inventory for financial reporting purposes but does not delve into the specific allocation of these costs to individual products in the same way as manufacturing accounting.
Manufacturing accounting uses various performance metrics like cost of production, cost variances, and efficiency ratios to evaluate the performance of the production process and identify areas for improvement. General accounting primarily focuses on financial ratios, profitability analysis, and overall financial performance of the company as a whole.
Manufacturing companies often need to comply with industry-specific regulations and standards, such as Generally Accepted Accounting Principles (GAAP) for manufacturing. These standards may require specific cost allocation methods and reporting. General accounting follows the more universal accounting principles and standards applicable to all types of businesses.
Budgeting and Planning
Manufacturing accounting is instrumental in creating production budgets, cost forecasts, and production plans. It helps in estimating the cost of producing goods and optimizing production processes. General accounting is more concerned with creating overall financial budgets, including revenue projections, expense budgets, and capital expenditure plans.