So you are starting your new brewery or maybe you’re pumping out thousands of barrels (Or hectoliters, I didn’t forget about you Canada!) and the pesky issue of how you account for keg deposits and returns keeps popping up between you and your accountant. They obviously want you to account for everything by the book, you want to run your brewery as efficiently as possible. The two positions sometimes conflict.
So let’s look at how it really should be done to keep everything in balance. First, we recommend having one item for Keg Deposits and another item for Keg Returns. Both of those accounts should be connected to your Current Liabilities account.
When you collect money for the deposit, that money should credit the Keg Deposit current liabilities account debits cash or your bank account. And when that keg is returned, it should debit your Keg Return current liabilities account and credits cash or your bank account. By creating two items you can always view them separately or aggregated under current liabilities.
Now, the question is how best to do this. With a little effort it is not terribly hard to create these accounts. What becomes more difficult is properly accounting for this over time. When you create an order you should be breaking up your deposits by keg type (1/2, 1/6, 50L, etc.). And when you pick up those kegs you should be creating a credit memo or a refund receipt that hits that liabilities account and again breaking it up by container type.
Honestly, this is one of the main factors in why we set up BREWD as we did. With a simple configuration setting, all of this happens behind the scenes. Anytime a product that has a deposit is added to an order the corresponding deposit for that container type is added as well and in the correct amount. And anytime kegs are picked up or dropped off at the brewery, they are easily accounted for as you can see below and can be done at anytime in the process.
Best yet, all of this hits Quickbooks Online in exactly the way it should…credits, debits, broken out, awesome. You will also notice the tap handle product listed on the picture above. If you loan tap handles and charge a deposit, the same sort of items should be created as you did for kegs. And yes, we account for that as well.
If you have any questions about how best to account for your brewery or have questions about BREWD, please reach out to us at email@example.com.
Thanks for reading!