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Accounting for Manufacturers

Here at Sheridans, we understand the majority of manufacturers in this country are small, family-owned businesses that employ less than ten people. Statistically speaking, just under ten percent of total Australian employment is in manufacturing.

There are a number of reasons why the manufacturing sector in Australia has been in decline for the past 40 years. Our high labour and raw material costs combined with our remote location and relatively small production runs make it difficult to compete on a global scale. On the other hand, despite globalisation, a relatively high local currency and diminishing scale in various industries, some manufacturers are thriving.

There remains plenty of opportunities with niche products and our successful manufacturers are innovative, they use cutting edge product designs, process innovations and their marketing stands out in the crowd. There are plenty of manufacturing success stories in this country in electronics, machine tools, textiles, food, plastics and trucks.

As a manufacturer you face some unique challenges. You may have to manage pending builds and assemblies, track customer orders, manage inventory and costs plus identify which orders have shipped. If you import components or export your finished goods you also have to contend with the volatility of the Australian dollar. It's not easy but over the years we have helped a number of manufacturers work through the stages of their business life cycle - from start-up right through to the sale of the business.

In our opinion, having an accountant who understands manufacturers can give you a serious competitive edge and we offer you a range of accounting, tax and business coaching services to support and grow your manufacturing business. We can help you with job costing, pricing, break even analysis and management accounting services plus using industry benchmarks we can compare your business performance against your peers to help you assess what is working in your manufacturing business and what needs working on.

No job is too big or too small for the team at Sheridans who offer you experience and most importantly, an intimate understanding of the manufacturing industry.


Manufacturers are one of our specialist client groups and having mentored hundreds of clients through the start-up phase of their business we have built a reputation as as business start-up specialists. If you are looking to start a manufacturing business or buy into an existing operation, there are numerous issues to consider including your business structure, tax registrations, insurances, accounting software selection as well as your vehicle and finance options.

As accountants and business advisors we can assist you in all of these areas plus provide advice on HR matters, payroll and the preparation of a business plan, marketing plan and a cash flow budget.

In a sense, starting a business is a bit like building a house and you need solid foundations including the right tax structure, accounting software, insurances and a marketing plan. Your choice of business structure is critical and there are a number of different options including sole trader, partnership, company and trust. When it comes to selecting the most appropriate tax structure for your business we always recommend you ‘start with the end in mind'. Australian tax laws are complex and changing your business structure at some point in the future can trigger a capital gains tax event that could prove costly. Whenever we provide advice on business structures we always take into account issues like:

  • Income Tax Minimisation
  • Maximize Asset Protection
  • Allow for the Admission of New Business Partners or Investors
  • Comply with all Legal Requirements in your Industry
  • Risk Profile of Your Industry
  • Consider Future entitlement to Discount Capital Gains Tax Concessions

As a consequence, we often find the business structure is a compromise based on the relative importance of each of these issues.

Another brick in your business foundations is your choice of accounting software. Up to date, accurate financial records let you to make informed business decisions and the wrong choice of software can create frustration and waste a lot of time and money. Poor record keeping is one of the biggest causes of business failure in this country and when deciding on the most appropriate software program to use in your manufacturing business you need to match your business needs with your level of accounting skill. Too often business owners produce ‘computerised shoebox’ records that create additional fees. This conflicts with our mission of helping you slash the time and cost associated with bookkeeping and compliance.

Here at the Sheridans, we want to be your accountant and business advisor, not an expensive bookkeeping service. You’ll find we support a range of different software programs but we do have a preference for cloud based solutions like Xero, MYOB Essentials and QuickBooks Online because of their flexibility and the fact that you can access your financial data via the internet. You can invite your accountant or bookkeeper to view your accounts at the same time that means you can get bookkeeping support and valuable advice in real-time. You can log in online anytime, anywhere on your Mac, PC, tablet or smart phone to get a real-time view of your cashflow. Your data is automatically backed up and users have access to the latest version of your financial data plus you never need to worry about installing software or program updates.

To build a house you also need the right tools and when 'constructing' your business we have developed a number of tools including a start-up expense checklist broken down into various categories including: 

-  professional advice and software
-  information technology costs
-  marketing and signage
-  equipment and leasehold fit out
-  vehicles
-  insurances

This checklist will help you identify all your potential establishment costs and these figures then filter through to our cash flow budget template and allow us to produce a projected profit and loss statement for your first year of trading. These reports can also tuck neatly into our business plan template that is designed to help you secure funding from external sources like a bank. Another useful tool is our business start up checklist that walks you through key business registrations you might require, insurance options, legal issues, branding items and the domain name registration for your website.

For a manufacturer, your vehicles are arguably one of your most important business tools. To learn more about the alternative methods of claiming your vehicle expenses and the distinction between a business and private trip, you can download our Motor Vehicle Tax Guide from the Resources section of our website. In addition, through our affiliate partners we can also assist with vehicle finance (chattel mortgage, CHP or lease) and get you fleet pricing on your new car, ute or light commercial van that could save you thousands of dollars.

If you're contemplating starting a business you don't need to reinvent the wheel as we have all the tools and resources to help you get off to a flying start. We can do some financial modelling based on different price points to produce profit forecasts and when you're up and running we can use industry benchmarks to compare your business performance against your peers.


For small business owners and manufacturers, your marketing could be the difference between gloom, doom and boom.

Most manufacturers rely on their reputation and referrals to grow their business and while these ingredients remain important, you need to shift your marketing focus online. Increasingly local searches like ‘plastics fabrication in Adelaide’ are driving traffic to your website which is often the first touch point with a potential new customer. As you know, in business, you only get one chance to make a good first impression and your website is your 'online shopfront' and silent sales person working 24/7 to promote your manufacturing business.

One of our biggest points of difference compared to other accounting firms is our marketing expertise. We can assist you with your branding (business name, logo and slogan), your corporate brochure and help you harness the power of social media to win more referrals. Over the past few years we have worked with dozens of clients to help them create affordable, quality lead generation websites that are responsive to smart phones and tablets. We can provide advice and guidance with your website content including video production and if your website lacks calls to action or lead magnets we'll help you build them. In addition, we'll introduce you to strategies like re-marketing and search engine optimization to drive more traffic to your website. If you aren’t using some of these marketing techniques your manufacturing business probably won't reach its full profit potential.

The marketing process begins with your branding and we have worked through the process with dozens of clients over the years and using some online resources we can help you build a modern brand that resonates with your target market.

Most importantly, we recognise the fact that business owners like you want more sales, more customers and more profit so we also give you access to one of the world’s most successful marketing programs, the ‘Business Growth System’. It contains more than 80 breakthrough marketing strategies supported by videos, templates, checklists and 2,500 pages of instructions. Access to this ‘vault’ of resources would normally cost you $500 per month, however, as a client of Sheridans you get FREE access. In addition, you also get unlimited access to the ‘Grow Your Business in 5 Days’ video training course that could have a massive impact on your future business growth. That's over $7,000 of valuable marketing tools you have access to as a client of the firm.

We can help you understand the Four Ways to Grow A Business plus identify the key profit drivers in your manufacturing business. We can walk you through a number of profit improvement strategies and even quantify the profit improvement potential in your business. Our role is to make sure you don't leave any profit on the table and if you're a manufacturer we offer you a range of accounting, taxation and business coaching services including:

  • Start-Up Business Advice for Manufacturers
  • Advice regarding the Purchase or Sale of Your Business
  • Tools including a Start-Up Expense Checklist, Business Plan Template and Cash Flow Budget Template
  • Provide Advice and Assistance with the Establishment of Your Business Structure (sole trader, company, trust, partnership etc.) taking into account issues like Asset Protection and future discount Capital Gains Tax Concessions
  • Registrations for Business Name, ABN, TFN, GST, WorkCover etc.
  • Preparation of Business Plans, Cash Flow Forecasts and Profit Projections
  • Accounting Software Selection and Training
  • Preparation and Analysis of Financial Statements
  • Bookkeeping and Payroll Services
  • Income Tax Returns and Tax Planning Strategies
  • Marketing Advice and Assistance
  • Wealth Creation Strategies and Financial Planning Services
  • Industry Benchmarking and KPI Management
  • Business Succession Planning
  • Vehicle & Equipment Finance (Chattel Mortgage & Lease)
  • Advice & Assistance with Claiming Motor Vehicle Costs
  • Recession Survival Strategies
  • Advice regarding Employee Relations and Workplace Laws
  • Business & Risk Insurances

Here are Sheridans, we do more than just keep the score for your manufacturing operation. We are business and profit builders who genuinely care about the success of your manufacturing business. We view the tax return as the start of the client process, not the end and if you're looking to grow your business, your profits and your wealth we invite you to contact us today.

To get to know more about us we invite you to book a FREE, one hour introductory consultation to discuss your business needs. You can expect practical business, tax, marketing and financial advice that could have a significant impact on your bottom line. To book a time, call us today on (08) 8376 0455 or complete your details in the box at the top of this page and let's get to work ON your manufacturing business so it is more profitable, valuable and saleable.

Sheridans - Build Your Business & Grow Your Wealth