Every successful business needs a firm grasp of its finances, and this is especially true for marijuana businesses. The fact that cannabis remains federally illegal poses unique challenges for marijuana entrepreneurs that only a chartered professional accountant (CPA) with marijuana industry expertise can help with. Laws and regulations in this nascent industry are constantly evolving, and falling afoul of these can result in serious financial penalties. Meanwhile, most major banks and financial institutions won’t service state-legal marijuana businesses because of federal prohibition. Without a bank account, cannabusinesses are forced to operate on a cash-only basis, with its attendant risks. Limited access to traditional financial services also means securing a loan to grow a marijuana business can be a difficult process. That’s not all. Marijuana’s status as a federally-controlled substance ensures that cannabusinesses are unable to deduct normal operational expenses, such as rent and payroll, from their tax returns. To help navigate this complex terrain, remain compliant, and make the most of the financial instruments that are available to you, you need cannabis accounting services. From drawing up a business plan as part of a licensing application to managing daily finances and keeping you up to date on the latest relevant regulations, a competent cannabis CPA is an invaluable resource for a thriving marijuana business.

How a cannabis CPA can help your business

What does cannabis bookkeeping entail? And how exactly would a cannabis accounting firm benefit your marijuana business? Here are some of the qualities and services offered by a marijuana accountant, from a dispensary CPA to medical marijuana accounting.

1. Reviews your business operations at each step of the supply chain

This is typically one of the first tasks undertaken by a marijuana accountant as having this overview is essential to advise on potential compliance issues, as well as cost-cutting and growth opportunities.

2. Tax planning, filing and compliance

Marijuana tax arrangements are highly complex, and don’t tend to work in the favor of cannabusiness owners. A competent marijuana accountant will maximize your tax deductions while ensuring you remain compliant.

3. Advise on your company’s organizational structure to avoid over-taxation

Part of an accountant’s strategy to reduce your tax burden may involve suggesting and managing a restructuring of your business.

4. Provide in-depth knowledge of local, state and federal marijuana tax laws and financial regulations

The legal and regulatory landscape concerning cannabis is constantly changing, which means there are always newly-emerging risks as well as opportunities. This is too much to stay on top of as a business owner, but making use of marijuana accounting solutions means you are better protected and well-positioned to benefit.

5. Implement a thorough cash-control system

Trying to manage a cash-based system in a business on your own will inevitably lead to mistakes, losses and possibly theft. A cannabis CPA can establish standard operating procedures for cash-handling such as daily cash counts and maintaining a daily cash log to minimize these risks.

6. Manage cash flows

A marijuana account can also bring order to what can quickly descend into chaos when dealing with accounts payable in cash. They can implement systems to track invoices and all cash payments, ensuring every single transaction is logged and managed.

7. Familiarity with business trends in the marijuana industry

A truly valuable marijuana CPA goes the extra yard and stays informed on emerging trends in the cannabis industry. This puts them in a position to advise and develop a long-term financial plan for your business to give it the best chance of growing and succeeding.

Finding a cannabis CPA

These are just some of the benefits to cannabis businesses of using marijuana accounting services. To find out exactly what a cannabis accounting firm can provide your business, you need to get in touch to schedule a consultation. Explore Marijuana Referral’s directory of marijuana accountants to get an idea of the services on offer and to find out the contact and location details of potential cannabis accounting firm partners for your marijuana business.

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Alpha Omega Accounting, LLC is owned and operated by Cynthia L. Finkenbinder, CPA. She has been serving both individual and business clients in Colorado for over a decade in both general accounting and tax preparation.

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