On my recommended Chart of Accounts, the wine making costs are in the “Other Expense” section of the chart of accounts. These costs are really inventory costs, not expenses, but I put them there for two key reasons:
- You can monitor the costs of the winemaking department with the Budget reports much easier than if they were recorded directly to the balance sheet.
- Other reports are much easier to run with “expenses” rather than “balance sheet” costs.
Before the end of the year, you will need to create a journal entry to transfer these amounts to the balance sheet. Some people will do this at the end of the month or at the end of the quarter, but the end of the year is fine because you can still use the Profit & Loss report.
I discuss this procedure in the Using QuickBooks in the Wine Industry course, but I don’t actually show how to do it. So here is the step-by-step video of how to enter that journal entry.
In this video (must be a Silver Club member to view) I will walk you through the steps. If you would like assistance, come to Office Hours or use this link to set up a coaching session.