Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
What CRM and accounting software do beverage founders recommend?
Members use a mix of CRM and accounting tools depending on team size and specific needs. For CRM, **HubSpot** is frequently recommended for its free tier and ease of use, particularly for smaller teams. **Capsule** is favoured by some, though members note **Salesforce** becomes more suitable at scale (100+ sales team). **Bowimi** is also used and appreciated by the community. For accounting, **Xero** is the clear consensus choice—described as easy to use and well-integrated with other tools. Some members previously used **Sage** for its multi-tier pricing capability (allowing 5 different pricing structures per SKU), but have since migrated to Xero. **Breww** is recommended as manufacturing software that links directly into Xero, making it useful for production-focused beverage businesses. Key recommendations: - **HubSpot** — free CRM option; excellent for smaller teams - **Capsule** — solid mid-market CRM - **Salesforce** — preferred for larger sales teams (100+) - **Bowimi** — used successfully by members; complements HubSpot - **Xero** — strong consensus for accounting; easy to use and integrates well - **Breww** — manufacturing software that integrates with Xero - **Sage** — legacy option; supports complex multi-tier pricing if needed Members report using Xero and Breww together works well for manufacturing-focused beverage businesses.
What is the best way to integrate Xero accounting software with a Shopify ecommerce platform?
Members report that Shopify no longer offers a native integration tool, requiring a third-party solution instead. **Integration options:** - **Xero Bridge** — Shopify's legacy integration tool; members found it clunky and unreliable, particularly with PayPal sales - **A2X Accounting** — recommended as an alternative Xero–Shopify integration (https://www.a2xaccounting.com/shopify/xero) **Key caveat:** Members identified PayPal integration as a persistent problem with Xero Bridge. One member suggested turning PayPal off entirely rather than fighting the integration issues, though others indicated they don't use PayPal and avoid the hassle altogether. Test any solution carefully with your payment methods before fully committing.
Should production and labour costs be classified as COGS or overheads in P&L statements?
The classification depends on whether costs are directly attributable to the production of individual units. **Direct, per-unit costs go into COGS; fixed and shared costs go into overheads.** **What belongs in COGS (pure unit economics):** - Filling/bottling fees (outsourced production services directly linked to product output) - Ingredients, glass, caps, and labels (per-unit variable costs) - Direct production labour *if* it can be attributed to conversion of raw materials into finished goods - Per-unit label costs (split tooling/origination fees into overheads, per-label fees into COGS) **What belongs in overheads:** - Production manager salaries and brewer/distilling staff wages (unless they perform *only* direct conversion work with no other business functions) - Storage and warehouse fees - Rent on production plant - Product receiving fees - Shared facility costs like electricity **Key principle:** Members recommend treating COGS as pure unit economics—only costs that scale directly with volume. If staff perform multiple functions or their labour cannot be directly attributed to converting raw goods into finished product, they belong in overheads. Some members argue for including labour in COGS if tracking cost-per-unit is important for their production model, but this requires clear delineation of when direct costs stop being attributable. **Standard reference:** IAS 2 governs the treatment of inventory costs and conversion costs. Members also noted that allocating labour and overhead to per-unit costs can be contentious with accountants—one member wished they'd "stood their ground" on this decision.
What expense management and accounting software systems work well together for drinks businesses?
Members use a combination of expense tracking apps and accounting software linked together for seamless integration. The most commonly recommended setup integrates with **Xero**, which appears to be the standard accounting platform in the community. Expense management and payment tools members recommend: - **Soldo** — used alongside approval workflows and payment runs that feed into Xero - **Approval Max** — payment approval layer that integrates with Xero - **Telleroo** — payment run tool that feeds into Xero - **Dext** — links directly with Xero and QuickBooks; described as "super simple" - **Expensify** — recommended for handling mileage, receipt uploads, and meeting expenses - **Pleo** — praised as "very easy" with Xero integration **Xero** itself is consistently cited as the accounting foundation, with members noting it is "very easy" to use. The common pattern is: expense app (Soldo, Pleo, Expensify, or Dext) → approval layer (Approval Max) → payment processing (Telleroo) → Xero. Members emphasise the value of direct integrations to reduce manual data entry and cut down on administrative friction.
Should storage and logistics costs be included in COGS or separated when calculating gross profit, especially for export customers on ex-works terms?
Members consistently include storage and logistics costs in COGS rather than treating them as separate line items on the P&L. The reasoning is straightforward: these costs are inherent to getting product to customers and should therefore be factored into gross margin calculations. **Key recommendations:** - **Include in COGS** — Members treat storage and logistics as part of COGS across the board, as the product cannot reach customers without these costs being incurred. - **Use nominal codes or profit centres for visibility** — If you want to see profit differential between channels (e.g. export vs. domestic), set up separate nominal codes or profit centres within your accounting system for import and export stock. This lets you report separately while still including these costs in COGS. - **Handle ex-works carefully** — For export customers on ex-works terms, the same principle applies: calculate and include the logistics cost in your COGS to understand true product profitability, even though the customer will bear the final shipping cost. **Note:** This approach ensures your gross profit reflects the true economic cost of goods sold, regardless of whether customers are domestic or international.
How should R&D tax credit claims be managed, and what specialists or accountants offer the best value?
Members report that R&D tax credit claims require significant internal work regardless of which specialist you use—don't expect a consultant to do all the legwork for you. Most members have found it pragmatic to route claims through their existing accountants for sign-off and final calculations rather than hiring dedicated R&D specialists, who often charge unpredictable rates and may push work back onto you anyway. **Typical approach:** Use your regular accountant to handle the claim preparation, paperwork, and enquiry insurance. Members report paying around **15% of the claim proceeds annually** for this service, which feels reasonable given the current variability in specialist pricing across the market. **Note on pricing:** The R&D tax credit market remains quite volatile in terms of what different firms charge—there's no clear standard rate. Some members are keeping an eye on potential shifts as the R&D claim structure itself may change, which could eventually rationalise pricing. If you want a personal recommendation for a specialist, ask in the group for a DM introduction, but go in with realistic expectations: you'll still need to document your R&D activities and rationale internally; the adviser will help structure and sign off, not do the archaeology for you.
What accounting and VAT services do members recommend, and which accountants specialise in the drinks industry?
Members recommend outsourcing VAT returns and accounting to specialists familiar with the drinks sector. The main recommendation that emerged from the community is: - **Chipchase Manners** — contact Graeme at this firm (chipchasemanners.co.uk). Members have used them for VAT returns and report positive experiences. Members also note that several accountants within the Kindred network offer these services and are happy to make introductions to their own providers if you reach out directly. The community practice is to ask for personal recommendations via direct message rather than relying on public discussion.
Should the cost of transporting distilled product from the production facility to duty-suspended storage (like an LCB warehouse) be included in COGS?
Yes, members consistently include delivery costs from distillery to duty-suspended storage as part of COGS. This reflects the principle that all costs to get the product into a distribution-ready state — from production through to the point it's stored and ready to ship to customers — should be captured in COGS. Once the product leaves the warehouse/storage location and moves to customers, that freight is treated separately as a distribution cost. The rationale is that the journey to duty-suspended storage is part of the creation and preparation process, not the sales/distribution phase.
What accountancy firms and services do members recommend for drinks business SMEs?
Members recommend a small number of specialist firms that understand drinks business accounting and offer scalable packages: - **Chipchase Manners** — contact Graeme at www.Chipchasemanners.co.uk - **Addition Finance** — ask for Graham or John; they offer flexible packages that scale as you grow. David from Black Sheep Spirits / Corte Vetusto Mezcal has referred members to them - **Virgate** — cloud-based accounting, though they specialise in retail and hospitality brands only The emphasis from members is on finding firms that understand the drinks sector specifically and can grow with you as an SME, rather than generic accountancy practices.
How should advance payments to bottlers be recorded in QuickBooks when stock hasn't been received yet?
When paying a bottler an advance (e.g. 50% upfront), you cannot match the payment directly to a PO in QuickBooks, as doing so would incorrectly increase your inventory before stock arrives. **The recommended approach:** - **Record the payment to the supplier account** — Allocate the advance payment in the banking tab to the supplier (bottler) without linking it to a PO. This creates a balance on the supplier's account. - **Match the PO when stock arrives** — Once production is complete and stock is received, match the PO to the invoice and reconcile it against the advance payment already recorded on the supplier account. - **Handle under/over-production** — If the bottler under-produces, any remaining balance sits on the supplier account and can be managed (credited, applied to future orders, or written off as needed). This workflow keeps your inventory accurate (only increasing when goods are actually received) while maintaining a clear audit trail of advances and final invoices.