The cannabis industry is growing, but it still faces some challenges, including accounting.
The industry as a whole is fairly new, which comes with its own set of hurdles. However, accounting services for cannabis dispensaries have different steps and techniques than a traditional business. Here are some of the common problems for cannabis businesses and how an experienced bookkeeping company can help.
Getting a bank account can be a bit tricky with a cannabis business. Some states allow full use and others not so much. This means that federal banks are out of the question, but if your state allows the industry, look into local banks or credit unions. They might be more willing to accommodate your needs, which would be great if you’re looking for a business equipment loan!
Cash on Hand
Without the full federally legal blessing, the cannabis industry tends to keep large amounts of cash on hand. This can make it hard to use it for legitimate business expenses and can make audits a more terrible experience. Also, it can be really dangerous to keep that much cash on your premises. An experienced accounting firm can advise you on how to track your money, pay your bills, and make audits more palatable.
Local and Federal Tax Laws
Get a accounting firm that also knows taxes for the area you’re located. This will help you determine what entities are permissible where you’re operating out of. Some areas require cannabis businesses to run as non-profits, while others have no requirements.
Tracking Your Accounts
Obviously you need a firm that knows how to track all of your accounts. You need things in order to properly report for tax and reporting purposes. And let’s be honest, your business is more likely to raise red flags than a manufacturing company. Partner with someone who can suggest a good chart of accounts for you and make sure your books are accurate and look impeccable.
No business ever knows what is going to happen, but cannabis businesses have to think about accounting for unforeseen expenses. These can be an increased cost of goods, or a lawsuit. An bookkeeping firm that can also help you find ways to put away some money for a rainy day is a partner you want to have!
There are other problems that come up that be solved by having the right accounting services for cannabis dispensaries. If you’re looking for the right partner, contact us by filling out the form below. Our team knows the industry and we can help your business get organized!