Getting Started
      Back to home
      1. Support Center
      2. Finance
      3. Getting Started

      Cost of Goods Sold (COGS) Tracking (Overview)

      Topics Covered

      Before we get to the "how," we have to first look at the "why?"

      Why is COGS Tracking Important?

      Cost of goods is an essential metric to monitor and understand the financial health of your winery. For many wineries, Cost of Goods Sold (aka COGS) has been a vaguely defined value on their Profit and Loss (P&L) Statement that often takes weeks, if not months, of effort by accountants to determine. But we have good news:

      InnoVint follows the volume so you don't have to!

      With InnoVint's COGS Tracking module, you can finally eliminate that messy back and forth between your winemaker and the finance team. We'll calculate exactly how many $/gal transferred between lots during topping, or how much of your Work-in-Progress (WIP) costs come from fruit vs packaging vs overheads. 

      To best understand how InnoVint supports COGS Tracking, let's first go back to the basics of COGS. 

      InnoVint precisely tracks your gallons (or preferred volume unit), and provides visibility into starting and ending volumes on hand during any given period. By also recording both overhead and raw material purchases in InnoVint, you can easily determine COGS per SKU. Ultimately, we know that understanding your COGS is essential to understanding your profitability. By gaining insight into what really contributes to your COGS, you can make more informed decisions about purchases, cellar processes, and so much more. 

      Who is COGS Tracking designed for? 

      Tracking COGS is typically handled by your accountant, bookkeeper, finance team, or CFO, and it's no different in InnoVint. We expect and highly encourage finance persons to get involved and own the overhead and raw material entries, as well as reporting. They should determine which and how many cost categories to use, the overhead allocation schedule, and their preferred methods of entry in InnoVint. Then coordinate with winemaking, share their intended practices and advise on how winery staff can best support them by properly recording winemaking activity in your account. In fact, we hope someone from your finance team is reading this right now, and if they're not, please share the link with them!

      What's Included in COGS Tracking? (Feature Overview)

      With our robust COGS Tracking, you’re able to capture and report on all direct and indirect costs from grape to bottle. If you are new to tracking production costs, you can start by simply having InnoVint distribute fruit costs from harvest through to your final bottled wines. If you're an experienced CFO that has a practiced methodology for tracking production costs, you can mimic that granularity in InnoVint by inputting all your direct and indirect costs and allocating cellar overheads to have your reliable work-in-progress (WIP) costs tied to real-time production workflow.

      Whichever method you employ, InnoVint automatically distributes costs proportionally by volume through all wine movements, whether costs are assigned in real-time or recorded retroactively once an invoice is received. Need to enter a purchase of bulk wine but the wine has already been blended into other lots? Not a problem! InnoVint automatically distributes that cost proportionally by volume to the blends that have been recorded thereafter.

      The system also retains the cost category breakdown throughout this process, so when a finished wine is bottled you know exactly what portion of the cost came from fruit vs. packaging vs. labor, etc. 

      There are 2 methods by which costs can be applied:

      1. Direct from InnoVint-managed inventory
        • i.e. Pulling costs directly from a vineyard source or a dry goods batch and applying the proportional costs to the appropriate lot(s) as that inventory is used
      2. Indirect, as an overhead "cost item"
        • i.e. Allocate or remove specific costs to lots as of today or a date in the past

      InnoVint also provides thorough forecasting, budgetary and reporting metrics such as: 

      • Forecasted fruit costs by vintage for budgetary purposes
      • Estimated vs. actual fruit cost reporting by fruit source
      • Real-time cost breakdown reported as total cost per lot, cost per unit (gal or liter), and cost per bottle
      • Cost breakdown as of a historical date, or date range, and the cost over time differential
      • Bottled, bulk out, and shrinkage information for bookkeeping purposes
      • Running list of all added and removed cost item entries with editing capability

      Limited Access for Accounting

      Members of your team that only need access to the COGS Tracking feature can be granted exclusive access to cost tools and reports without having to disrupt the winemaking team.

      💲 We encourage you to activate the COGS Tracking module to take your production reporting to new heights and bring incredible business value to your winery! Perhaps you'll find margins are healthy, profits are up, and you'll be able to invest in that new concrete tank you've been eyeing.

      Contact support@innovint.us for more information. 

      Let's Dive in

      1. Learn how to allocate costs (direct, indirect)
      2. Onboard starting costs and update your Settings
      3. Review cost reports and reconciliation
      4. Interested in learning more? See how InnoVint distributes costs 

      FAQ

      Q: Does InnoVint follow Generally Accepted Accounting Principles (GAAP)?

      A: Yes! Our program is crafted with GAAP compliance as a top priority. 

      Q: Where does InnoVint COGS Tracking start and end?

      A: InnoVint is focused on your bulk wine production costs from the point of receiving the grapes to the point of bottling.

      Think of InnoVint as the source of  truth for your unit costs ($/gal, $/liter, etc) for bulk wine inventory COGS. Your accounting software is the source of dollars. When bulk costs transition to bottled costs, we hand it back over to the accounting software.

      Q: Does InnoVint integrate with QuickBooks Online (QBO) or other accounting softwares or ERP systems?

      A: InnoVint does not currently have a direct integration with QBO, although we look forward to building one in the future.  We are happy to work with you and your accountants on how to best use InnoVint in parallel with QuickBooks. 

      If you work with an ERP platform, reach out to us directly to discuss further options. 

      Q: Does InnoVint support currency other than the US Dollar?

      A: You betcha! InnoVint now supports most costing currencies including the Australian and New Zealand dollars, the Euro, the British Pound, the Chilean Peso, the South African Rand and more! Just reach out to our support team at support@innovint.us to find out more.