Good Accounting Can Make or Break a Marijuana Business

Accounting may be one of the less interesting aspects of business, but it’s vital—especially for those in the cannabis industry.

“Cannabis companies are experiencing audits regularly, and noncompliant businesses face years of litigation, significant legal fees and back taxes,” Marijuana Businesses Daily points out. 

“Every number in the books should be supported and properly recorded. Organized books not only reduce risk but can result in cost savings during an audit.”

That’s not all. The lack of access to banking makes proper record-keeping all the more important. There are many reasons for this, including increased vulnerability to theft.

When you do find a bank willing to work with the industry, proper documentation is a must.

“Most of the banks that will do business with cannabis businesses tend to have a lengthy application process, including documentation such as financial statements.

Many of these banks also perform quarterly reviews of these financial statements, so marijuana companies need a cannabis-trained accountant to keep their books and records up-to-date for submission to the bank.”

If you’re a cannabis entrepreneur and you don’t already have top-notch accounting services, now is the time to get some. There will come a day you wish you had.


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Policy

Wednesday, October 21, 2020 - 08:19

A concerted effort by federal, state, and local officials to crack down on illegal cannabis cultivation has led to the destruction of more than 1.1 million plants over a 13-week period.