Margin by product line, inventory carried at what it's worth, and aftermarket revenue separated from equipment sales.
Aggregate gross margin is the enemy of an industrial products business. It hides the line that carries the company and the line that's been subsidized for three years, and it makes every pricing conversation a matter of opinion.
We run the accounting and CFO function for equipment manufacturers, distributors, and aftermarket businesses with long cycles and heavy working capital.
Aggregate margin hides which lines earn their place. Discontinuation and pricing decisions get made on instinct.
Slow-moving stock sits on the balance sheet until someone finally writes it down, usually all at once and usually at the worst time.
Customer deposits and progress payments on capital equipment are liabilities until the obligation is satisfied. Booking them as revenue is one of the most common errors we find.
Warranty, parts, and service contracts recognize differently and usually carry better margin, but only if they're reported separately.
We report margin by product line and customer, apply an obsolescence reserve policy grounded in real aging data, treat deposits and progress payments as the liabilities they are, and separate equipment from aftermarket so you can see where profit actually lives.
Consistent allocation, monthly reporting.
A written policy applied on real data.
Liabilities until the obligation is satisfied.
Recognized over the period of the obligation.
Inventory and receivable cycles modeled explicitly.
Section 263A uniform capitalization applies to produced inventory. Section 179 and bonus depreciation are timing levers worth modeling against projected income rather than defaulting. Product development and process engineering frequently qualify for the R&D credit. Multi-state sales require nexus and apportionment review, and equipment installation or field service can create physical presence on its own.
That's usually the first deliverable, and it usually changes at least one pricing or discontinuation decision.
As a liability until the performance obligation is satisfied. Recognizing deposits as revenue overstates both the top line and the period.
Only when the process is right and the volume genuinely demands it. We'll tell you honestly, including when the answer is no.
Tell us where you are today. We will follow up within one business day with a view on what is worth fixing first.
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