Accounting for Craft Breweries, Cideries and Distilleries in BC
A craft producer is a factory, a warehouse and often a bar under one roof. Product sits in tanks and barrels for weeks or years, excise and liquor rules shape every sale, and the tasting room runs on its own till.
EverStone CPA keeps the books, inventory, payroll and tax filings for BC beverage makers, online, with every fee fixed in writing first.
Quick answer: The core of a craft producer’s accounting is inventory. You need to know what is in each tank and barrel, what it cost, and how it left the building. Excise records, liquor reporting, tasting-room sales and cost of goods all depend on that count being right.
Beverage producers we work with
Small producers in BC range from a two-person brewhouse selling growlers to a distillery with a bottling line, a lounge and product in liquor stores.
Each one turns grain, fruit or sugar into a taxed, regulated product, and each one needs books that follow the liquid from raw ingredient to the glass or the case.
- Craft breweries with a taproom, growler fills and keg accounts
- Cideries and meaderies working with orchard fruit and seasonal pressing
- Craft distilleries ageing spirits in barrel for long periods
- Producers selling through the provincial wholesaler, private stores and restaurants
- Start-up producers planning the build-out and first licence
- Established producers whose cost of goods no longer matches reality
Should a brewery or distillery be incorporated?
Most producers incorporate before they open. The build-out is expensive, partners often share ownership, and the business takes on leases, licences and debt that owners rarely want in their own names.
Partners and investors
A corporation lets several owners hold shares in clear proportions, with a shareholder agreement to cover who puts in what and what happens if someone leaves.
Tax on retained profit
Profit left in the company to fund tanks and working capital is taxed at the 11% combined small business rate on the first $500,000. That limit is shared if you own other associated companies.
Start-up losses
The first years often show losses from build-out and slow sales. Inside a company those losses carry forward against future profit. As a sole proprietor they offset your other income instead, which can matter if you still hold a job.
Licence holder and structure
Your liquor licence and excise licence are issued to a named entity. Changing structure later can mean amending those, so it pays to settle the structure before you apply.
Our incorporation advice covers the set-up and first-year plan. The associated corporations guide explains when the limit is shared.
Taking money out of a producing company
Producers often reinvest heavily, so owner pay is tight in the early years. When there is room, the choice is salary, dividends, or both.
Salary for working owners
A head brewer or distiller who owns shares can be paid a wage like any other staff member. It is deductible, builds CPP and RRSP room, and appears on a T4.
Dividends for shareholders
Dividends come from after-tax profit and suit owners who do not work in the business day to day. They must follow share rights, and family shareholders raise the split-income rules.
Shareholder loans
Money taken out and not booked as pay becomes a shareholder loan. If it is not repaid within one year after the company’s year-end, it is generally taxed as income. We track it so it does not surprise you.
Compare options with the salary vs dividends calculator and keep a record with the shareholder loan tracker.
GST, PST and liquor sales
Beverage alcohol is taxable for GST at 5%, so a producer collects GST on taproom, retail and wholesale sales and claims input tax credits on malt, fruit, equipment and packaging.
PST on liquor
BC applies PST to liquor under its own rules, which differ from the general 7% rate on other goods. Merchandise and food in the tasting room can sit under different rules again. We set up separate tax codes in your till for each.
Sales through the wholesaler
Product sold through the provincial wholesale system is settled on statements that net out fees and other charges. Each statement needs to be split into sales, costs and any tax, rather than posted as one deposit.
Container deposits
Deposits charged on cans and bottles, and refunds paid on returns, are not your revenue. They need their own accounts so they do not inflate sales.
We file both returns through our GST and PST filing service. The BC PST guide explains the provincial side.
Excise duty and liquor licensing, in plain terms
Federal excise rules apply to beer, wine and spirits made in Canada. Depending on what you make, that can mean holding an excise licence, keeping production and storage records, and filing regular excise returns.
What excise depends on
Duty is generally tied to volume and type of product, and to when product leaves bonded or licensed premises. Rates change and some reduced rates apply to smaller producers. We use the current CRA figures for your product, not a figure from memory.
Records that support it
Batch logs, transfers between tanks, packaging runs, losses and dumped product all feed the excise return. If production records and the books disagree, the return is hard to defend.
Provincial licensing
BC licenses liquor manufacturers separately, with endorsements for a lounge, a picnic area or on-site sales. Each carries reporting and fees. We track those costs and deadlines alongside your tax calendar.
Licence rules change, so confirm your position with the regulator when you plan a new product or space. We build the accounting around whatever your licences allow.
Tanks, barrels and cost of goods
Inventory decides your gross margin, your excise position and the value on your balance sheet. A brewery turns stock in weeks. A distillery may hold spirits in barrel for years. Both need a method that suits the product.
Three stages of stock
Raw materials such as malt, hops, fruit and grain. Work in process in fermenters, bright tanks and barrels. Finished goods in kegs, cans and bottles. Each stage is counted and valued separately.
Costing a batch
Ingredients, packaging, a share of production labour and overhead go into each batch. Knowing the cost per litre lets you price taproom pours, cases and kegs with a real margin.
Losses and samples
Evaporation, spills, quality-control dumps and free samples all reduce inventory. Recording them keeps cost of goods honest and supports the excise records.
Read about inventory accounting in BC and the year-end inventory count.
Bookkeeping for the taproom, tills and distributors
A tasting room brings retail habits into a manufacturing business. Its POS reports, card payouts and tips need to reach the books in a form your accountant can trust.
POS to ledger
We map POS sales categories, such as pours, packaged beer, food and merchandise, to separate revenue accounts. Daily sales are reconciled to card payouts, with processor fees as a cost.
Wholesale and keg accounts
Restaurant and private-store accounts buy on terms. Receivables, keg deposits held and kegs out in the market are tracked so nothing is written off by accident.
Events and festivals
Off-site event sales, special event permits and festival fees are recorded as their own line, so you can see whether events earn their keep.
Our monthly bookkeeping includes this reconciliation, and the hospitality accounting page covers food-service operations in more depth.
Payroll, tips and WorkSafeBC for producers
Production staff, packaging crews and taproom servers usually sit on one payroll with different needs. Servers earn tips, packaging may be part-time, and production work has its own WorkSafeBC risk profile.
BC requires at least 4% vacation pay, rising to 6% after five years, and final pay within 48 hours of termination. T4 slips are due by the last day of February. If annual BC payroll grows past $1,000,000, the BC Employer Health Tax applies.
Tips handled by the company go through payroll; tips paid directly by guests to servers are treated differently. See tip reporting and payroll and our payroll services.
Brewhouse, stills, canning lines and CCA
Fermenters, stills, a canning or bottling line, glycol systems, forklifts and delivery vans are capital assets. Their cost is claimed through capital cost allowance by class.
Leasehold improvements to a rented building, such as drains, floors and venting, are usually a separate class from the equipment itself. Keep invoices that split equipment from installation and building work. Our equipment CCA guide covers the common classes, and lender readiness helps when a bank is funding the next tank.
Month-end checklist for a BC craft producer
Do these in order each month. Inventory comes first because almost everything else depends on it.
- Count tanks, barrels and packaged stock. Record volumes by stage and by product.
- Log losses and samples. Note dumps, spills, evaporation and product given away.
- Reconcile production to the excise records. Check volumes packaged and removed against what you will report.
- Close the taproom till. Match daily POS totals to card payouts and cash deposits.
- Post wholesaler statements. Split each settlement into sales, fees and tax.
- Chase keg and trade accounts. Follow up unpaid invoices and kegs that have not come back.
- Run payroll and tips. Check tips paid out match tips collected on the card.
- Reconcile bank and cards. Bring every account to its statement balance.
- Review margin by product. Compare cost per litre to price for your main lines.
You may share this checklist with other producers or link to it: everstonecpa.com/accountant-for-craft-breweries-distilleries-bc#month-end-checklist.
Fees for breweries, cideries and distilleries
Producers get a written quote after a free consultation. Starting points from our published schedule:
- Monthly bookkeeping with POS and wholesaler reconciliation, GST and PST filing included: from $300 a month
- Inventory costing and monthly margin reporting as a fractional controller: from $1,500 a month
- Budgeting, lender packages and expansion planning as a fractional CFO: from $2,500 a month
- Corporate T2 return and year-end financial statements: quoted in writing
- Payroll for production and taproom staff: quoted with the bookkeeping
The full schedule is on our pricing page, and our T2 return service explains what year-end includes.
Questions from craft beverage producers
How should a distillery value spirits ageing in barrel?+
Can you prepare our excise returns?+
Our cost of goods looks wrong. Where do we start?+
Do you work with producers in the Okanagan and on the Island?+
Written and reviewed by a Chartered Professional Accountant at EverStone CPA, an Abbotsford CPA firm working remotely with businesses across British Columbia. Updated . Producers can read client reviews first; our editorial standards explain how pages are checked.
Related reading
Pages for makers and hospitality owners.
Send an enquiry
Tell us what you produce, how you sell it, and what software runs your taproom and inventory. A CPA reads every enquiry and replies within one business day with a fixed fee in writing.