Profit Players,
Buying big stuff for your brewery? Tanks, canning lines, furniture—it all adds up. But if you’re not tracking it right, you’re making life harder for yourself (and your accountant). Here’s what you need to know.
Welcome back to Back to Basics.
In case you missed it, we’ve covered Chart of Accounts, Prepaids, and Inventory.
Now it’s time we talk about Fixed Assets.
Some people call them fixed assets, some call them capital equipment, some say CapEx.
Whatever you call it, I’m talking about the big stuff: your tanks, your brewhouse, your canning line, your bottling line, your furniture, your fixtures.
Why does this matter?
Because fixed assets live on your balance sheet. If something costs over $2,500 and has a useful life of more than 12 months, we have to depreciate it. That means spreading the cost over time instead of expensing it all at once. And while depreciation can get complicated (let’s leave that to the tax geeks), your job is simple:
- If it costs more than $2,500…
- If it lasts longer than 12 months…
- Let your accountant know when you buy it.
Your accountant loves knowing about your fixed assets throughout the year—not just at tax time.
Now, brewing equipment is a big category, but it’s not the only one.
- Furniture & Fixtures: Everything from chairs to taproom decor.
- Computers & Related: Rarely over $2500. Think security systems, AV system, POS, etc.
- Leasehold Improvements: Any upgrades you’ve made like painting, shelving installation, or remodeling, etc.
- Building & Building Improvements: New walls or floors, major renovations to existing spaces, electrical system upgrades, plumbing replacements, HVAC system installations, etc.
So how does this tie into profit?
Simple: the more profit you generate, the more you can reinvest in these assets. And when it’s time to buy? You’ll likely pay with a loan, a lease, or cash. Take it from me…if you can avoid financing, do it. That’s why we focus on profit: so when the time comes, you have the cash to invest in your business.
Short and sweet today.
If you buy something big, let your accountant know. They’ll thank you for it.
Talk next week,
-cf