August 30, 2016
Samples are part of the game when it comes to the food industry. It may be samples that you’re handing out at the farmers’ market in order to allow potential customers to taste your products. It may be packaged samples that you send to buyers in the hopes that they’ll like what they see and bring you in. It may be small samples you include with online orders to build customer loyalty. And/or it may be one or a hundred other ways you work to share your product with the outside world.
However you do it, these samples quite literally eat into your profits. These samples take ingredients, time, and – sometimes – packaging and all of that has costs associated with it. This is by no means to suggest that you shouldn’t give out samples – you absolutely should in the right circumstances – but you do need to be keep track of how much your samples are costing you.
It’s easy to think that the little pieces of product A that you hand out at farmers’ markets or trade shows or the handful of samples you send out to Buyer A and Buyer B don’t add up, but they do. Again, this is all in the name of sales generation and building your brand but if you find yourself wondering what’s happened to all your revenue, you may want to take a closer look at your sampling.
I am not a CPA and if you have any questions about how you should be entering your samples into your accounting books, be sure to talk to a CPA. The important thing is that you are entering your samples into your accounting books. The saying that you need to spend money to make money is very true – just as long as you know how much money you’re spending!
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