Best Accounting Advice Cannabis Retailers Can Depend On
The cannabis retail segment is riding high after its legalization in several states. But the
regulations prevail, so retailers must follow them to run their stores without hassles.
Accounting is one of the trickiest parts of the operations because the books and banking
have to be in place at all times. Moreover, retailers must implement accounting best
practices to prevent problems down the line. Complexities may increase as your business
scales with time. But you can follow some valuable accounting advice to steer clear of
mistakes and ensure a seamless process. Here are some tips to follow.
Build a plan
As a new retailer, you may not have a robust accounting system to manage different
financial tasks. You may not even have a professional to handle your transactions and
record them in the books. Building and implementing an accounting plan should be your
priority. You must do it sooner than later to avoid problems such as payroll errors, missed
tax deadlines, and reporting delays. Consider hiring a professional with expertise in
accounting, bookkeeping, and taxes. You may even use an accounting software solution.
Implement an efficient inventory management solution
Robust inventory management is a crucial aspect of running a cannabis retail store, and it
affects the accounting function too. Beyond helping you to maintain and monitor your
stock, it lets you allocate your funds in the right places. You can use the insights from your
inventory management solution to invest more in fast-selling products and skip slow-moving
ones. So you can actually optimize your funds and lower the risk of overstocking for your
Manage your funding
Like any other business, a cannabis retail business may require external funding during its
launch and through the scaling stage. You have to look for investors and stakeholders to
provide funds for your business. These investors may be apprehensive about going ahead,
considering the erstwhile reputation of cannabis. So having a viable plan can help you
convince them. You can check POSaBIT to know more about investor relations. At this stage,
you must have a professional to gain financial insights and advice to secure funding and
utilize it optimally.
Be ahead of accounting compliance
Despite the legal status of cannabis, retailers need to follow several regulatory guidelines to
prevent legal issues. These include accounting guidelines relating to financial reporting.
Failing to comply with them can bring massive penalties for your business, and you may end
up with legal and financial repercussions. Ensure your books and reporting systems are
compliant. Also, follow the regulatory changes, and fine-tune your process accordingly.
Keep your books up-to-date
Never let your bookkeeping tasks build up because they may quickly accumulate. Catching
up can be cumbersome if you have a small team to manage your accounts. But you must
hire or outsource the services of an accounting expert right from the start. Up-to-date
accounts enable you to monitor expenses, understand the current financial state, and
prepare financial statements and tax returns on time.
Accounting may be the last thing on your mind when running a cannabis retail business. But
it is as crucial as any other operations process. Follow these tips to keep your books and
accounts on track.