Distribution Industries
Our experience in the manufacturing and distribution industries ensures first-rate service that facilitates effective financial reporting for internal management and third parties. In addition to traditional audit and accounting services, our Tax Services Group focuses on tax issues affecting manufacturing businesses, such as inventory valuation methods, uniform capitalization rules, and multi-state and local income and sales tax issues. Our tax experts identify valuable tax planning opportunities that minimize tax burdens, enhance a business’s long-term value, and increase day-to-day profitability.
Critical Issues
Distributors’ results are closely tied to their ability to market effectively and run an efficient operation. Their margins are sometimes razor-thin and without an automated operation, they are working at a disadvantage. Distributors have to possess the capabililty to track orders, trends, inventory and margins. They also have to be able to accurately fill orders. In addition, they need to be able to work with sometimes thousands of vendors that represent the products that make the distributor successful. In turn, for many of their vendors, the distributor represents one of their largest direct customers.
The distributor’s ability to forecast upturns and downturns in revenue affect their use of spending power and their own employment. Without automation, it’s difficult for them to forecast properly and to act quickly.
Key Drivers
Demand is driven by cyclical business needs and the health of the economy. Distributors need to be concerned about new competitors and the marketing capabilities of existing players. Original manufacturers do work with distributors to merchandise their products and run promotions to increase sell-through. The ability to turn inventory is a key indicator in assessing the operating health of a distributor.
Distribution Companies Benefit from Templeton & Company
In addition to the traditional audit, accounting, and tax services, we perform a myriad of management support services focused on enhancing shareholder value including:
- Evaluation of financing alternatives;
- Cost control studies;
- Development of internal management reporting systems;
- Inventory management and control reviews;
- Product and product line profitability analyses;
- Historic/trend analyses;
- Internal control/safeguarding of assets review;
- Effective application of information technology.