Top 5 Tips for Staying on Top of Your Alcoholic Beverage's Regulatory Compliance
On top of managing the marketing, sales, production, and delivery of products, companies manufacturing alcoholic beverages in the U.S. also need to ensure they are following all of the guidelines outlined by the Alcohol and Tobacco Tax and Trade Bureau (TTB) and state agencies.
Dropping the ball on a filing or tax payment deadline can harm a company’s finances and ability to sell their products. The good news is that you can take some simple steps to organize and manage your beverage’s compliance processes proactively. Here are some tips to help you keep your alcoholic beverage business in compliance as it grows.
1. Set Calendar Reminders For Federal Tax Due Dates
As a producer of an alcoholic beverage, you are required to file certain reports and pay federal excise taxes (FET) specific to your business operations and the type of alcoholic product you’re producing. The penalties for not filing your return or paying your taxes on time can be significant, so it’s essential to monitor and add due dates to your calendar to remind you of upcoming filing and payment deadlines.
You can also subscribe to receive automated reminders from the TTB telling you it’s time to file. The alerts are generally sent one week from the report or return due dates.
2. Create a System for Tracking State Licenses and Reporting
In the United States, each state regulates the production, sale, and distribution of alcohol within its borders, and you must meet all requirements in any state where you plan to do business. This requirement often means obtaining and renewing a state license in each state. Many states also require you to file monthly reporting, even if you haven’t made any sales that month. As your business grows, this can be a lot of information to track.
One simple but effective method for managing your state licenses and reporting requirements is to create a spreadsheet listing each state, license number, expiration date and monthly reporting due dates. Having all of the information in one place means you can quickly and easily filter and find what you need to stay on top of requirements for each state. You can use your spreadsheet to set up calendar reminders for renewals. It’s also a good idea to keep a central, organized file with PDF copies of your state licenses.
3. Reconcile Your Production and Shipping Records Monthly
For most required reporting, you’ll need to track your production metrics, including how much you’ve produced, how much product is leftover, and how much product is packaged in bottles, cans, kegs, etc.
If you’re ever audited, your shipping records serve as proof of the accuracy of your reporting. Keeping the information from your signed bills of lading in order and matching them up with your monthly tax reporting ensures that an auditor can easily verify that your shipments match your reports and tax payments.
4. Stay Up-to-Date on Regulatory News and Changes at the Federal and State Level
It’s helpful to stay proactive when it comes to understanding and managing any upcoming changes that will impact your beverage’s compliance procedures. In addition to regularly reviewing their websites, you can subscribe to receive updates and notifications from the TTB and many state websites.
5. Document Your Processes and Have Backup
Details are most likely to fall through the cracks during a transition. Maybe you move to a new inventory tracking system or accounting software, or an employee leaves or moves to another area or role. If you don’t have well-documented processes and someone who has been briefed or trained on them, you run the risk of missing an important deadline that could ultimately halt your business.
Managing an alcoholic beverage business requires dedication and diligence at every level. Keeping your beverage compliant with regulations is essential to building a strong and profitable brand. With the right systems and a proactive approach, you can efficiently avoid costly compliance errors.