If you're a small business in the CPG space, you already know the terrain is competitive and fast-moving. A frequently overlooked challenge that can significantly impact profitability has recently resurfaced as a more “immediate” concern: tariffs.
Whether you're importing packaging from overseas, sourcing raw materials globally, or manufacturing abroad to control costs, tariffs can significantly impact your bottom line on a good day. In recent years, it may have been just another line item on a customs form, but now it is a business life-or-death scenario. How you track, manage, and plan for these costs has ripple effects across your entire financial picture. With the newest legislation at play, you can no longer ignore these costs.
That’s where smart, outsourced accounting comes in. Accounting properly for tariff-related expenses will help you identify where you may be historically reliant on overseas vendors, and where you may be able to save money by finding a new one.
Even if you change nothing, a good accounting team knowledgeable in inventory will help you price your goods in a way that reflects your new tariff reality.
If you’re new to the party, here are the basics. Tariffs are essentially taxes placed on imported goods. For CPG brands, this can include anything from glass jars and cardboard boxes to ingredients and finished goods. And because CPG companies often work with thin margins, an unexpected tariff hike—or improperly classified imports—can turn a profitable product into a financial sinkhole.
Unless you’re deeply embedded in customs regulations (and let’s be honest, most founders aren’t), it's easy to miss a change or file something incorrectly. Take this highly-visible example of tariffs being top of mind to ensure you are not ignoring any key areas that are affecting your margins.
When CPG companies try to handle accounting in-house—especially without inventory-savvy financial support—tariffs often get lumped into general cost buckets. That may seem harmless, but it skews your COGS, distorts gross margin analysis, and can lead to serious surprises during tax season or when you try to scale.
Here’s what gets missed when tariffs aren’t properly accounted for:
Another side to this to consider is when/if you are audited or need to apply for trade relief. Not having this detail broken out can put you at a real disadvantage.
Warning: shameless pats on the back incoming. An experienced accounting, tax and finance leader like Accountfully brings clarity and strategy to the table. Our deep experience in the inventory-based business arena offers unique systems and ways to see true profitability. Here’s how:
We can help you build a system that accurately tracks all costs associated with bringing your goods to market: product cost, freight, duties, tariffs, brokerage fees, etc. Accountfully’s Inventory department tracks this within our proprietary Inventory Workbook until you are ready to implement an inventory management system. If you already use an Inventory Management System like Cin7, this data will live within it.
Also housed in our Inventory Workbook are all of your SKUs, suppliers and sales channels. We also break out each sales channel so you can see how profitable each is as standalone elements. We can show profitability by SKU, channel, or vendor—so you know if a tariffed product is still worth keeping in the lineup.
We know that new, more aggressive tariffs are here. Now we need to manage your cash as you decide next steps. With finance and advisory support, specifically forecasting, you can plan ahead for higher duty cycles or build inventory in advance of expected policy changes. Our advisory team lead knows the CPG industry inside-out and can support you in managing cash long and short term. Now is a good time to have added advisory to make sure you are managing cash down to the cent.
As a staple in the CPG community, we have built a wide network of industry pros that know overseas trade way better than we do. We can help you get in touch with customs brokers or trade compliance specialists to make sure you’re classifying items correctly and not overpaying. If it is something we’ve seen across the board with other clients, we may be able to offer some short term solutions right away.
You don’t need to become a trade expert—but you do need someone in your corner who knows how to translate customs fees into financial strategy. For CPG brands that are scaling, launching new SKUs, or exploring international sourcing, an outsourced accounting partner like Accountfully can offer clarity, confidence, and cash flow control.
• • •
Not sure if your current books are handling tariffs the right way? Let’s talk. We help CPG brands build accounting systems that make sense of inventory, imports, and all the complexity that comes with it.
