About Salsas Don Sebastian
Salsas Don Sebastian – a Hispanic female-owned business creating fresh, authentic Mexican salsas and dips – faced key challenges in the practical application of their Cost of Goods Sold (COGS) accounting practices. In turn, these challenges impacted the organization’s ability to forecast profitability and scale their business. As a result, through the GENEGE Alliance Emerging Business Program, GENEDGE resources with deep expertise in operational efficiency and financial management developed a Scope of Work designed to help Salsas Don Sebastian streamline their COGS tracking process and develop a strategic plan around expanding their economic footprint.
Salsas Don Sebastian operates a growing manufacturing presence in Richmond, VA producing an array of delicious authentic Mexican salsas and dips. With an undying commitment to quality and customer satisfaction, the company has built a strong brand reputation. However, despite their success, the company identified challenges in their cost framework, which inhibited their growth when evaluating additional channels to scale their business.
Addressing Challenges
Prior to engaging with GENEDGE, Salsas Don Sebastian encountered several challenges related to COGS tracking:
- Inaccurate Cost Allocation: The company struggled with accurately allocating costs associated with raw materials, labor, and overhead to specific products, leading to distorted COGS figures.
- Semi-manual Data Entry: The process of collecting and inputting cost data was semi-manual which open the door for errors and consumed valuable time that could be otherwise invested into business operations.
- Inconsistent Labor: The lack of consistent day-to-day staff often disrupted forecasting labor costs, as well as workflow and productivity because fluctuating staffing levels led to delays, inefficiencies, and increased training costs.
- Compliance Concerns: Inconsistent cost tracking practices raised compliance concerns, potentially impacting financial reporting accuracy and regulatory compliance.
To address these challenges, Salsas Don Sebastian enlisted the expertise of GENEDGE consultants who specialize in financial management and process optimization. The consultants conducted a comprehensive assessment of the company’s existing cost accounting practices and identified areas for improvement. The process to uncover and resolve areas of opportunity included the following key phases:
- Data Audit: The GENEDGE team performed an in-depth review of historical financial data. This granted the opportunity to understand the current state of their financial position and how items were categorized, calculated, and reported.
- Enhanced Documentation Methodology: After completing the Data Audit, the GENEDGE team offered documentation insight to ensure consistency in documenting costs across all business categories. This recommendation resulted in reversing a net loss into a net positive for a previously recorded fiscal year.
- Improved Data Visibility: Finally, the GENEDGE team closed the engagement with a half-day working session to develop a template that provides improved data visibility into cost drivers and variances. This allowed for data-driven decisions with higher confidence that would enable business growth.
The Results
These strategies yielded significant impact in developing the go-forward strategic plan for Salsas Don Sebastian. By partnering with GENEDGE and leveraging the expertise of our consultant partners and through the implementation of targeted feedback, Salsas Don Sebastian increased visibility into COGS which provided invaluable insight that elevated decision-making capabilities. This ultimately informed pathways for sustainable growth in the highly competitive food industry.