Accountant for Hamilton manufacturers

Steel in the yard, parts on the floor, goods on the dock

A fabricator’s inventory sits in three places at once. Raw material, whether plate, bar, tube or ingredients for a food line, waits in the yard or the cooler. Work in progress is part-cut, part-welded or part-packed on the floor. Finished goods sit on the dock waiting for a truck. All three are on the balance sheet at cost, and the year-end number for each flows straight into cost of sales and profit. Overstate the stock and you pay tax on profit you did not make. Understate it and a later year pays for it.

Work in progress is the hard part. It needs a consistent way to attach material, labour and overhead to a half-finished job, applied the same way every year. We set that basis once, document it, and count and value the three stages at year end so the T2 rests on stock that was actually there. Inventory, WIP and CCA for small manufacturers works through a similar shop.

Job costing, and the HST on what you buy and sell

Most Hamilton job shops quote from experience. That works until steel prices move, a customer changes a drawing, or a run takes longer to set up than planned. Job costing that captures material, direct labour and a fair share of shop overhead on each job shows which customers and which kinds of work actually make money. It turns the next quote into arithmetic rather than a guess.

On the tax side, Ontario’s 13% HST on steel, consumables and equipment comes back as input tax credits, and for a manufacturer those credits are large enough to matter every period. Parts shipped to a customer in the United States are generally zero-rated exports, which means no HST charged but credits still claimed, so the paperwork proving the export has to be kept. HST on exports covers the evidence the CRA expects.

Presses, cranes and CNC: equipment and CCA

A shop’s equipment is its largest asset and its biggest deduction. Machinery and equipment are recovered through capital cost allowance at the rate set for their class, and the class matters: manufacturing and processing equipment is treated differently from a pickup truck or a computer. When an old machine is sold or traded, the proceeds come off the class, which can produce recapture in a year you did not plan for or a terminal loss when a class empties. We keep the CCA schedule by asset, so a trade-in is priced with its tax result known. Recent changes for manufacturing buildings are worth a look if you are expanding the plant itself.

SR&ED on process improvement

Hamilton shops solve technical problems all the time: a weld procedure that stops cracking in a thicker gauge, a jig that holds tolerance on a new alloy, a cooking step changed to extend shelf life. Where the work resolved a genuine technological uncertainty through systematic trial and error, it may qualify for scientific research and experimental development credits, claimed on Form T661 with the T2. A Canadian-controlled private corporation can earn an enhanced refundable credit, which pays out even in a loss year. The claim depends on records kept while the work happens: what was tried, what failed, what was learned. We help set that habit up early rather than reconstructing it at year end.

A plant payroll brings Ontario with it

Shift work, overtime and a shop crew mean a real payroll, and in Ontario that brings two costs on top of CPP and EI. Employer health tax applies once total Ontario payroll passes the $1,000,000 exemption, with the rate band chosen before the exemption is taken off. WSIB premiums depend on your classification, and a shop that also installs on customer sites may have more than one. Both are employer costs, so we accrue them monthly and build them into the labour rate used for job costing. Payroll in Hamilton covers the pay runs themselves.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• T2 corporate return and year-end financial statements
• Inventory and work in progress valued on a consistent basis
• Job costing set up so margins are real numbers
• Equipment CCA schedules, disposals and recapture
• HST input tax credits and export documentation
• SR&ED record-keeping support and the T661
• Employer health tax and WSIB built into labour cost

Fixed fees, fully online

EverStone is an Abbotsford CPA firm and every engagement runs online — video, phone and secure upload, so nobody has to leave the shop floor. Hamilton is three hours ahead, so a question sent after the day shift is usually answered by the next morning. The fee is fixed and agreed before work starts. See what it costs.

Remote accounting for manufacturers from Abbotsford

EverStone is a sole practitioner CPA firm in Abbotsford, British Columbia, working with Hamilton clients entirely online. There is no Hamilton office and no local staff. Meetings are held by video or phone, documents are exchanged by secure upload link and e-signature, and no visit is required at any point. Inventory, job costs and equipment schedules are kept current through the year rather than rebuilt at the count.