Offshore Manufacturing Accounting Services

Standard costing assigns predetermined target costs to direct materials, direct labor, and manufacturing overhead based on engineering studies and expected production volumes. Actual costing tracks actual historical expenses incurred. Standard costing allows plant managers to identify operational inefficiencies by comparing standard versus actual performance through variance analysis.

Purchase Price Variance is the difference between the standard purchase price budgeted for a raw material component and the actual invoice price paid to the supplier, multiplied by quantity purchased. Material usage variance measures the difference between standard material required for production and actual units consumed. Our team records PPV and usage variances monthly, giving plant managers immediate visibility into material inflation and scrap.

We track raw materials issued to shop floor work orders, direct labor applied from timecards, and applied manufacturing overhead based on predetermined machine hour or labor hour rates. At month-end, completed production orders are transferred to Finished Goods, while open jobs remain in WIP. We calculate under-applied or over-applied overhead and post appropriate balance sheet adjustments.

We maintain perpetual inventory sub-ledgers across Raw Materials, Work-in-Progress (WIP), and Finished Goods under full absorption costing in compliance with GAAP and IFRS. We reconcile monthly physical inventory cycle counts against ERP stock ledgers, tracking scrap, obsolescence reserves, and lower of cost or net realizable value (LCNRV).

Custom tooling, injection molds, and stamping dies purchased for specific customer contracts are capitalized on the balance sheet and depreciated over their estimated production unit lifespan or contract duration. When tools are customer-funded, we record revenue upon customer milestone approval.

Under Section 263A, manufacturers must capitalize direct costs and an allocable portion of indirect production costs (purchasing, quality control, plant warehousing, administration) into ending inventory rather than deducting them as current operating expenses. Our team structures cost accounting records to calculate accurate UNICAP inventory adjustments.

Our offshore manufacturing accounting team operates across leading industrial ERP platforms including NetSuite Manufacturing Edition, SAP Business One, Sage 100cloud Manufacturing, Syspro, Infor CloudSuite, Fishbowl Inventory, Katana Cloud Manufacturing, QuickBooks Enterprise with Advanced Inventory, and Xero.

We deliver monthly plant operating statements, gross margin by product family, contribution margin after direct labor, and manufacturing overhead variance commentary that highlight production line profitability and cost trends.