Why Your Accountant Needs to Be a CPG Expert

You’ve likely learned running a consumer packaged goods business means jumping over a maze of financial hurdles. Between developing a network of reliable suppliers, managing inventory and cash flow, keeping tabs on the cost of goods sold, and weathering seasonal variations, it’s no wonder a one-size-fits-all accountant doesn’t cut it. Your finances need more than a general bookkeeper. 

I’ve spent years working with CPG brands, as an advisor and angel investor, and I’ve seen firsthand the transformation possible with a CPG business. The right accountant can help you spot opportunities and avoid costly mistakes. But there’s more. Keep reading to learn the ins and outs of why partnering with a CPG accounting expert is nonnegotiable.

The Unique Financial Needs of CPG Brands

Running a CPG brand comes with financial challenges that most businesses don’t face. The need to track COGS precisely, manage perishable inventory, handle seasonal fluctuations, and navigate the sustainability conundrum makes CPG accounting a whole different game. And if you're trying to scale, getting a handle on these complexities is imperative.

Let’s start with COGS tracking. In CPG, your cost of goods sold isn’t just an accounting line — it’s a constantly shifting target. Raw material prices, packaging, storage, and transportation costs can fluctuate from week to week. I’ve seen brands struggle to maintain profitability because they didn’t have accurate, real-time insight into their COGS. If you don’t know your true production costs, it’s tough to price your products right and protect your margins.

Then there’s inventory management, which can be especially tricky in CPG. Unlike tech products that can sit in a warehouse indefinitely, CPG products typically have a shelf life. Mismanaging inventory means you're either wasting cash on unsellable goods or running out of stock at critical times.

Many brands also face a sustainability challenge. Perhaps you want to adopt more eco-friendly packaging and shipping methods — but these often come with higher price tags. On the one hand, consumers demand sustainable products, and you want to offer them. On the other hand, going green can quickly eat into profits. Finding that balance between sustainability and profitability is something every CPG founder needs to grapple with. It’s not an easy decision, but the brands that ride the wave are the ones that build long-term customer loyalty while keeping their financials firmly in check.

And let’s not forget seasonal fluctuations. CPG brands face peaks and valleys in demand depending on the time of year or consumer trends. It’s common to see a massive spike during the holidays, only to face a dip afterward. Without smart planning, this can create a huge strain on cash flow. At BBG, the team and I help brands anticipate these swings so they’re ready when sales slow down or ramp up.

The Ability to Leverage a Deep Industry Network

Relationships with investors, lenders, consultants, and vendors who understand the intricacies of CPG operations open doors that would otherwise remain closed. For instance, one of the biggest advantages of working with CPG is access to better financing deals. 

Many traditional lenders don’t fully understand the long payment cycles and cash flow challenges CPG businesses face. Say you’re a specialty coffee brand that’s landed a deal with a major retailer. The retailer places a large order, but their payment terms stretch to 90 days. Meanwhile, you still need to cover the upfront costs of production — buying raw coffee beans, designing and sourcing custom packaging, handling warehousing, paying your suppliers, and managing your logistics network — long before you receive payment. With the right financial connections, you can secure better financing options or lines of credit to keep operations moving smoothly without cash flow issues.

And there’s even more that someone who specializes in accounting for CPG brands can do for you. I'd help you develop a cash flow forecasting model that aligns your production schedule with expected receivables, making sure you’re in a strong financial position throughout the process. We could also explore alternative financing options such as invoice factoring or lines of credit, giving you quick access to cash to cover operational costs without slowing growth.

But it’s not just about money. There’s also immense value in strategic partnerships. I’ve helped brands connect with trusted vendors that provide better rates and support long-term growth for CPG brands. 

The Value of Industry-Specific Financial Insights

Working with an accountant who specializes in CPG brands gives you access to financial data and industry insights that can help with long-term planning, profitability analysis, forecasting, and pricing. 

Say you’re a skincare brand focusing on organic ingredients. I’d help you with long-term financial planning by forecasting the impact of sourcing sustainable materials, planning for seasonal shortages, and aligning your financial strategy with your growth and sustainability goals. This way, your brand can scale while maintaining a steady cash flow, even during off-peak production cycles.

If you had a niche snack brand with multiple product lines, a CPG expert might approach product line profitability analysis by diving into the data to uncover which SKUs are truly profitable. For example, you might find a top-selling item has lower profit margins due to higher packaging costs. In this case, you can work on renegotiating supplier contracts and focusing resources on products with stronger margins.

Let’s say you own a craft beer brand facing fluctuating demand during seasonal events. For forecasting, I’d use my database to help you align production schedules with expected demand, reducing waste and optimizing inventory so you don’t end up with surplus stock or stockouts during peak periods.

For a plant-based food company, I’d bolster your pricing strategy by analyzing competitor pricing and customer preferences. Together, we’d develop a pricing structure that balances competitive pricing with healthy profit margins, helping you stay profitable and competitive.

Finally, for a gourmet chocolate brand looking to expand internationally, I’d leverage financial data to guide your scaling efforts. Analyzing sales trends and operational costs empowers us to identify the best markets to enter and adjust your supply chain strategy to minimize costs and increase your reach.

The Role of Inventory Management in CPG Accounting

Without careful oversight, you might find your CPG brand is stuck with too much stock that ties up cash or not enough to meet customer demand. A CPG-specialized accountant analyzes your sales patterns, product turnover, supply chain costs, seasonal demand fluctuations, and storage expenses to pinpoint inefficiencies in how inventory is managed. Using this data, they help you adjust reorder points, ultimately improving cash flow and maximizing profitability.

Navigating Complex COGS Calculations

Inaccurate COGS can lead to mispriced products, shrinking margins, and poor financial visibility, which makes it difficult to identify where profits are lost or how to adjust pricing to maintain profitability. With so much variability in the CPG supply chain, precision is absolutely vital.  

When I work with clients on COGS, I set up enterprise resource planning software. Then, we dive into inventory management tools, cost accounting methods, and automated procurement systems. These systems automate the process of tracking every cost involved in production, from raw materials to logistics. 

Managing Cash Flow in a CPG Business

With high upfront costs for inventory and demanding production schedules, cash flow is often tricky for CPG brands. Payment cycles that stretch beyond 60 or 90 days can cause strain. To overcome this, I recommend dynamic discounting with core vendors. It allows brands to offer slight discounts in exchange for faster payments, which can drastically improve liquidity without impacting long-term profitability.

Another underutilized approach is demand forecasting integration with production scheduling. Too often, brands produce based on past trends, but integrating real-time demand signals into your financial strategy can keep production aligned with market demand. This can reduce excess inventory and free up cash.

Learn more about the financial KPIs that matter most to CPG brands in our article, Understanding Key Financial Metrics for Food and Wine Entrepreneurs.

Compliance and Regulatory Knowledge

Navigating the complex world of CPG regulations is another area where a specialized accountant can save you headaches — and money. From FDA labeling requirements for ingredient disclosures and health claims to food safety regulations like the Food Safety Modernization Act, CPG businesses face strict compliance rules. Even California’s Proposition 65, which mandates warning labels for products containing certain chemicals, can catch brands off guard, leading to costly fines if not properly handled.

I’ve seen brands face significant penalties simply because they missed key updates to these regulations. Working with a CPG-focused accountant keeps your labeling and operational processes compliant, letting you focus on brand growth without worrying about regulatory missteps.

Partnering With a CPG Accounting Expert for Success

The real value of working with a CPG-focused accountant is the ability to anticipate challenges before they become obstacles by leveraging deep industry knowledge and a network of CPG-savvy contacts. 

At Balanced Business Group, we specialize in providing the CPG accounting expertise and finance services that founders need to stay ahead in a competitive market. 

Get in touch today if you’re ready to take your CPG business to the next level. 

Author Name: Pedro Noyola

Author Bio: Pedro Noyola is the CEO of Balanced Business Group (BBG), a company dedicated to helping Founders in the CPG food and beverage industry gain financial confidence. At BBG, Pedro combines traditional accounting with tailored financial guidance, providing industry-specific insights to ensure sustainable growth for passionate food entrepreneurs. He is also an angel investor and a mentor to emerging CPG brands via SKU and TIG Collective. Pedro’s career spans leadership roles at FluentStream, where he helped the company achieve recognition as one of the Fastest Growing Companies in America by Inc., and Telogis, where he was part of a team that grew the company’s recurring revenue from $50 million to $1.2 billion in under five years.

Pedro holds a BA and MPA from The University of Texas at Austin and an MBA from Harvard Business School. He is an active member of the Young Presidents Organization, continually seeking growth in both leadership and learning. Outside of work, Pedro enjoys family time and outdoor activities, drawing personal fulfillment from his roles as a husband and father.