Overview
The Costs section of Blended was designed to make tracking Lot-specific COGS easy. For very little effort, wineries can get a significant handle on their COGs with the ability to add sophistication over time.
Think of Blended like a sophisticated cost allocation tool. It is great at understanding where your costs are and helping you to allocate those costs into the individual wine lots that you have in process. Because Blended tracks your production as gallons flow through your process, costs follow along automatically.
Direct Costs vs. Overhead
Direct Costs are production materials that are consumed throughout the production process. Examples of Direct Costs are Grapes, Yeast, and Glass. In Blended, a total cost is assigned to the material, and that cost passes into the Lot as the material is consumed.
Overhead Costs are business expenses that aren't tied to a specific input material but are still needed to produce the wine. Examples of overhead costs could be utilities, labor, and insurance.
Barrels are tracked in a number of different ways. We recommend working with your CFO or accounting team to determine how you'd like to allocate their costs.
Barrels as Direct Costs: Blended supports the ability to assign individual cost and a depreciation schedule at the barrel level. Treating a barrel as a direct cost means that as that barrel is depreciated, a portion of its cost passes only to the Lot that currently resides in the barrel. If no wine is in the barrel, no cost is depreciated.
Barrels as Overhead: It is common for wineries to manage an overall depreciation schedule outside of Blended. In this scenario, wineries typically add an overhead line item on a periodic basis for the total depreciation amount and spread that among their wines.
Timeliness of Entering Costs
Blended allows users to retroactively enter costs or backdate cost entries. When spreading costs, it is important to choose the correct period because it will impact the Lots that were in process at that point in time. As costs are added or Lots are added, Blended will redistribute costs accordingly within the time period.
Cost changes through Blended or Volume Shifts
Blended stores cost as a total against a Lot. We calculate any unit costs, such as per gallon, at the present time by dividing the current cost of the Lot by the current volume. If you record a Loss on a Lot, the total cost of that Lot will remain unchanged, but you should expect that the cost per gallon will increase.
When wine is blended or topped, cost flows with the gallons to the new Lot. You can see those calculations in the Lot Cost Details tab.
The timing of events can matter and can change the unit cost of Lots. Taking a Loss prior to a Blend operation will increase the per-gallon cost of the Lot less than blending a portion of a Lot away and then taking a Loss in the original Lot.
Yes! You do not need to know the cost of an item when you receive it during the winemaking workflow within Blended. Blended enables you to enter costs at a later date, such as when an invoice comes in.
Yes! Blended makes it easy to change costs after the fact if a mistake was made or the initial cost was an estimate. Check with your accounting team for your internal rules, but Blended doesn't restrict the time range when edits or back-dated costs can be added.
Yes! Dashboards within Blended are all highly configurable and downloadable. Ultimately, it's your data; it should be easy to access.
If there's a specific view you are having trouble creating, reach out to Blended Support. We'll be happy to assist.