23rd-Feb-2026 • Mohamed Hassan • Production and Manufacturing Accounting
As a small business owner in Kenya's bustling manufacturing sector, you know firsthand that managing costs is crucial to maintaining profitability. One essential yet often overlooked aspect is production accounting. In this blog post, we'll explore how effective production accounting can help your SME thrive.
Production accounting is a critical tool for small manufacturers in Kenya. It tracks the cost of producing goods or services, providing valuable insights that drive informed decision-making and cost control.
Let's dive into some examples: Imagine you run a garment factory with 10 employees. You produce 1,000 pieces of clothing per month. Production accounting will help you determine the exact cost of producing each piece, taking into account materials, labor, overheads, and more.
Labor is a significant part of production costs for most SMEs. Production accounting allows you to track labor expenses accurately by recording the time spent on each task. This information can help you identify inefficiencies, optimize workflows, and ultimately reduce labor costs.
In addition to labor, material costs are vital for small manufacturers. By tracking material usage during production, you can ensure that resources are used efficiently and waste is minimized. This, in turn, can lead to cost savings and increased profitability.
Having a clear understanding of your production costs empowers you to make informed decisions about pricing strategies, inventory management, and even expansion plans. With accurate production accounting data at your fingertips, you can confidently price your products competitively while maintaining healthy profit margins.
Lipabiz Technologies Ltd offers a comprehensive business management platform tailored to the needs of small businesses in Kenya. Our platform includes production accounting features that can help streamline your operations and optimize your production costs.
