What to Avoid in Cannabis Accounting

The term CPA means Certified Public Accountant. To earn this title, someone has to take a number of accounting courses, pass an official examination, and become licensed in at least one state to practice. You should only trust a qualified CPA when it comes to auditing or reviewing the financial statements of your business. Having a certified CPA review your finances can give your cannabis business a better chance of partnering with third parties such as potential investors or financial institutions like banks.

Your financial needs should not stop at a CPA either. Bookkeeping services are there to review all of your business’ transactions and combine this information into digestible financial statements. You can use this data to prove the stability of your company, plot your growth in the future, or spot cash flow problems before they become disruptions. Luckily, with Dope Consulting, you can have access to an experienced team that offers both of these services and more.

Cannabis and dispensary accounting are still relatively new areas when it comes to accounting services, and there are many hurdles that you are going to want to avoid. There is a lot to consider when selecting your accounting services, and you don’t want to waste time or money on services that are not right for your business. We can let you in onalert you to certain red flags that tell you an accounting professional does not have your best interest in mind:

• Slow Response Time: High-quality accountants are always in demand. They can be very busy or projects may take longer than you expected, but the most crucial element is communication. If you have an accountant who does not call you back, dodges your calls, or does not keep you informed, then it is clear they are not the right choice for your business.
• Taking Shortcuts: It can be tempting to get “creative” and cut corners to deliver faster results, but your finances are not where you want to take shortcuts. The cannabis industry is one of the fastest-growing in the country so it can require rapid response at times. However, it is also one of the most highly regulated fields in the nation. That means you can’t afford the fines and penalties from the mistakes that often come from cutting corners.
• Misunderstanding Your Legal Status: The details in tax code can be complicated, but to put it simply, the fundamental rules of accounting require you to report financial operations by legal entity and not by a business group. As an example, a group of investors could own multiple small businesses like dispensaries or other cannabis companies.In this example, if each dispensary operates as a separate legal entity, then they must keep separate books and records for their finances. Failing to do so can violate federal and state compliance laws. A professional accountant should know this when they start working with your organization.
• No Network Connections: Skilled professionals gain a reputation and make connections with other skilled professionals. An accountant worth your time will refer you to other services when it’s appropriate or when they can’t meet your needs. Your accountant should avoid preparing legal documents for you or taking a financial interest in your cannabis business. They should be able to refer to someone else for those things.