1. Managing Your Inventory*
*And Production to Ensure Financial Success
Mary Brettmann, CPA
Vickie Brennan, Investigator, TTB

2. Welcome We will be covering a lot of ground in this seminar.
Our goals:
Understand the basics of inventory
Know where to get started
Showcase cool tools for inventory and production

3. Inventory Huge Benefit, Huge Hassle
Backbone of materials handling and forecasting
Give everyone the same playbook
Cost of mistakes grow with the company

4. What is Inventory? Keep track of everything that goes into the process
Raw Materials
Work in Process
Finished Goods
Keep track of what is sold
Merchandise

5. How is inventory valued?
Average Cost
FIFO – First in, first out
LIFO – Last in, first out
Actual Cost
Standard Cost

6. How do you do inventory? Physical count – worksheets, excel file
Periodic accrual – Journal Entry balance based upon PI
Perpetual accrual – System keeps its own balance

7. Possible obeer ipad count screen
Ekos is working on the creation of an electronic signature.

8. Important Internal Controls
Standards are important
Regular electronic backups
Proper sign off on the count worksheets
Strong standard Operating Procedures are important both to maintain the accuracy of your system and to prove to TTB that your inventory count is accurate.
As you grow, TTB will expect stronger SOPs.

9. TTB Definition of Inventory Requirements for Inventory

10. TTB Inventory Requirements
Brewery – 27 CFR
Must be taken at least once each calendar month and must include:
Data Taken
Quantity of beer and cereal beverage on hand
Losses, gains and shortages
Signature, under penalties of perjury of the brewer or person taking the inventory (as defined at 27 CFR Executed under penalties of perjury).
Retain on premises, made available for inspection by TTB officer

11. TTB Inventory Requirements Distilled Spirits Plant – 27 CFR 19.623
Production and Storage Accounts and Processing Account (wines and bulk spirits) 27 CFR , , and Must be taken at the close of each calendar quarter and must include:
Date Taken
The identity of the container(s)
The Kind and Quantity of spirits, denatured spirits and wines
Losses, gains, and shortages
Signature, under penalties of perjury of the proprietor or person taking the inventory (as described at 27 CFR Execution under penalties of perjury).
Retain on premises, made available for inspection by TTB officer

12. TTB Inventory Requirements Distilled Spirits Plant – 27 CFR 19.623
Processing Account (bottled and packaged spirits) 27 CFR : Must be taken at the return periods ending June 30 and December business days’ notice must be provided to TTB designating the date and time of inventory. The inventory record must include:
Date Taken
The Identify of the container(s)
The Kind and Quantity of spirits, denatured spirits, and wines
Losses, gains, and shortages
Signature, under penalties of perjury of the proprietor or person taking the inventory (as described at 27 CFR Execution under penalties of perjury).
Retain on premises, made available for inspection by TTB officer

13. TTB Inventory Requirements
Winery - 27 CFR
Must be taken annually, typically June 30.
Monthly report of operations filers may select another annual inventory period upon notice to TTB
Quarterly report of operations filers must select an annual inventory period that begins on the first day of a calendar quarter and notice must be filed with TTB.
Annual report of operations filers must take their annual inventory as of December 31.

14. TTB Inventory Requirements
Winery - 27 CFR
The inventory record must include:
Description of wine and spirits, including anticipated marketing identifiers such as vintage, varietal, or geographical designation
Type of wine (if other than grape), i.e., orange, apple, honey, etc.
Tank numbers. Barrels, puncheons, etc., containing the same kind of wine may be summarized by type unless marketing identifiers are noted.
Cases, bottles and other similar containers – the total volume of one kind of wine may be entered as one item and appropriately identified.

15. TTB Inventory Requirements
Winery - 27 CFR
The inventory record must include (con’t):
Summary: The volume of bulk and bottled or packed wine must be totaled separately in wine gallons or in liters, by tax class, and reported (in wine gallons) on the next required Report of Wine Premises Operations, in addition to any spirits on hand.
Signature on the last, consecutively numbered page, under penalties of perjury as described in 27 CFR €.
Retain on premises, along with the Report of Operations for the period in which the inventory is taken, and make available for inspection by TTB officer. Losses or gains must be reported any time an inventory is taken and reported.

16. Tools for Inventory and Production
Phase I reports
What basic info can the system give me? Reorder Points Tank Utilization Once you trust your system, The Next Step is for it to Talk Back to You.

17. Reorder Point Alerts

19. Tools for Inventory and Production
Phase II Reports
What is the reality according to the system? Inventory Stock Status Report FUTURE Inventory Stock Status Report

22. Tools for Inventory and Production
Phase III Reports
Tell me what will happen based upon a forecasted reality MRP Module Use it for Purchase Order Generation High Level Forecasting Forecast a shortage AND a solution

25. Pointers for Taking the Next Step
Count Early and Often
Appoint Someone “Inventory Czar”
Consistency is Key
Be Curious
Make Changes and Count Again

26. TTB Resources – https://www. ttb
TTB Resources – (Tools/Tutorials, Virtual Seminars and Online Training)
Common Compliance and Audit Issues:
Beer Regulations: 27 CFR Part 25
Distilled Spirits Regulations: 27 CFR Part 19
Wine Regulations: 27 CFR Part 24

27. Questions? Thoughts?

28. Thank You Mary Brettmann, CPA Beverage Business Builders
(714)
Vickie Brennan, Investigator
Alcohol & Tobacco Tax & Trade Bureau
(513)