Manufacturing Accounting & Tax Services in Australia

Our Australian manufacturing accounting services are designed for businesses across the production landscape:

• Small-Scale Workshops & Fabricators: Businesses that need to establish a solid system for job costing and tracking the cost of raw materials.
• Medium-Sized Factories & Assembly Plants: Companies managing complex supply chains, multiple product lines, and requiring detailed analysis of factory overhead costs.
• Food & Beverage Producers: Companies that need to manage batch costing, track perishable inventory, and comply with food safety standards.
• Innovative Manufacturers: Companies investing in new product development, process improvements, or automation who are prime candidates for the R&D Tax Incentive.

From the moment you start producing goods, specialized manufacturing accounting is necessary. It becomes absolutely critical when:

• You Begin Production: You must have a system compliant with Australian Accounting Standards (specifically AASB 102 for inventories) to track the cost of inventory through its various stages.
• You Invest in Plant & Equipment: You need to manage complex depreciation schedules to accurately reflect the value of your assets and maximize tax deductions.
• You Need to Price Your Products: To price goods profitably, you must have an accurate Cost of Goods Sold (COGS), which includes direct materials, direct labour, and an allocated portion of factory overheads.
• You File Your Company Tax Return: The ATO has specific rules for inventory valuation. An incorrect valuation is a major red flag. This is also when you lodge your R&D Tax Incentive claim.
• You Innovate or Improve Processes: To claim the R&D Tax Incentive, you must have detailed, contemporaneous records of your experimental activities and the costs associated with them.

Outsourcing manufacturing accounting provides access to a highly specialized skillset. The costs reflect the complexity of cost accounting, inventory management, and R&D tax work.

• Small Operations: AUD $2,000 - $4,500 per month. This typically includes core cost accounting, inventory tracking, and standard financial reporting.
• Medium-Sized Plants: AUD $4,500 - $8,000+ per month. This service level adds more detailed job costing, variance analysis (standard vs. actual costs), and preparation support for R&D claims.
• Large or Complex Operations: Custom pricing, often including virtual CFO services for supply chain management, capital investment planning, and strategic financial leadership.

The financial risks in manufacturing are directly tied to the management of costs and inventory. Common pitfalls in Australia include:

• Inaccurate Inventory Valuation: Failing to comply with AASB 102 for valuing inventory can lead to inaccurate financial statements and is a major red flag for auditors and the ATO, potentially leading to significant tax adjustments.
• Improper Overhead Allocation: Not correctly allocating factory overheads into the cost of your inventory results in a distorted view of product profitability and non-compliant accounts.
• **Failed R&D Tax Claim:** A claim rejected by the ATO or AusIndustry due to poor record-keeping is a massive financial blow, resulting in the loss of a significant cash refund or tax offset.
• Inaccurate COGS: An incorrect Cost of Goods Sold figure means your gross profit is wrong, leading to flawed business decisions and incorrect company tax payments.

Cost accounting and R&D tax are specific disciplines that most general accountants do not specialize in. Hiring an experienced in-house management accountant or financial controller is a significant expense that is often prohibitive for growing manufacturers.

Outsourcing to YourLegal's manufacturing finance partners provides a cost-effective alternative. We bring the expertise to implement a robust cost accounting system, ensuring you can accurately track inventory and calculate a defensible COGS. Crucially, we work with you to identify and document your qualifying R&D activities throughout the year to build a strong, successful claim. Our reports provide clear visibility into your production costs, empowering you to make smarter decisions about pricing, efficiency, and investment, while maximizing the government incentives available to you.