Accounting & Your Cannabis Business: Get the Help You Need
Updated: Aug 11, 2022
All companies – no matter what industry – need proper financial processes and controls. For any business that wants to be successful and profitable, this means having the right team or team member in place to oversee strategy and day-to-day financial activities and operations. Solid accounting practices are critical in creating a strong foundation in which your company can grow.
That said, if you own a cannabis business, you need a cannabis accountant.
Here is the short list why:
1) We know the industry.
As a cannabis business owner, you’re dealing with a myriad of challenges often at high speed. Regulations and compliance, taxes, operations, employees and cash management are all high priorities and no matter what sect of the industry you’re in, it’s likely at least one of these areas is keeping you up at night.
And it makes sense in this ever-changing, dynamic industry. But you don’t need to fumble around in confusion. With a little planning and the right support, you can build a strong financial foundation for your cannabis business to make sure you are well-positioned for maximizing growth and profit.
We know it can be painful to shell out the money to bring on an accounting professional, especially when you are first starting out and have competing, urgent expenses. But we know, from our work with other cannabis companies and startups, it can be a game changer for you. Working with a qualified and competent CPA or accountant will help alleviate any headaches related to your company’s finances and compliance requirements. It will allow you to focus on your strengths and the parts of your business that you love. That’s why it’s critical you find the proper accounting partner to bring onboard.
2) Define your status quo
At Indiva Advisors, one of the first questions we ask a potential client is what type of accounting software they are using. This is important to see what type of records are being kept, the type of business structure implemented (are there multi-licenses and multi-locations or one location only) and get an overview of the company’s operations.
Typically, many small cannabis business owners are using QuickBooks or Xero, two online user-friendly accounting systems. That can be a great place to start. But we want to see if the system will support the company’s growth from both the accounting and regulatory perspective. We’ll check to see what financial reports the systems produce, any audit history functions and other outputs that make sense to those overseeing the company’s operations.
3) Plan for effective growth
Once we understand the accounting system the cannabis company is using, we’ll dive into a discussion about their business plan – for the next one, three and five years. We want to get a
sense of where they are going and their trajectory from the present to where they want to be in the near future. That helps us assess what their needs will be and give us milestones to work toward. This is important because it’s not one-size-fits-all when it comes to business plans. For example, the plan of a one-location dispensary who wants to remain independent, will look very different than the plan of a business owner who wants to acquire different licenses and be in five different states in five years.
Developing a business plan is key in charting the company’s path – for both the accountants, and the client. Knowing the objectives, mission and vision of our clients help us better propel them toward accomplishing their goals – while staying in compliance.
Using an accounting professional to their full capacity will only enhance growth and success, now and in the future.
Schedule a free consult to discuss your current and future plans to understand if Indiva Advisors is a good fit for you. www.indivaadvisors.com