Running a food manufacturing or distribution business means juggling production schedules, supply chain logistics, compliance certifications and customer relationships. But should you add tax expert to your already long list of responsibilities?
While there’s no shortage of tax software options that promise to simplify the process of preparing your own returns, consider these three compelling reasons to leave your taxes to professionals who understand the food industry:
- The margin for error is too high. With so many figures tied to production costs, distributor arrangements and cross-border transactions, there are thousands of opportunities for an error to occur. For example, a simple miscalculation in how you account for equipment depreciation could mean significant overpayments. Or worse, it could trigger an audit that ties up your business for months.
- Complexities require specialized knowledge. Food manufacturing and distribution businesses come with industry-specific tax considerations that generic software can’t navigate — from proper inventory accounting methods to R&D credits for product development. If Uncle Sam comes knocking, would you know how to defend your cost allocation methods or explain seasonal inventory fluctuations? You’ll need someone who understands not just tax law, but how it applies specifically to food operations.
- Tax laws affecting food businesses are constantly evolving. Even if you’re well-versed in current tax regulations, that knowledge has a short shelf life. Every year brings changes that impact food manufacturers and distributors, like revised international trade provisions or updated sales tax rules for food products. If you miss a critical update or overlook new credits, for example sustainability initiatives, you could leave big money on the table — or face penalties for non-compliance.
Expertise that understands your margins
Having your taxes professionally prepared by CPAs who specialize in the food industry can be one of the smartest investments you make this year. Reach out to the food industry experts at Magone & Company for guidance.
This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance specific to your unique circumstances.