As a cannabis business owner, you know firsthand how complicated it can be to run a successful cannabusiness. Your hands are full juggling the many different aspects of your business while trying to remain compliant with laws and regulations. In fact, it can be a real headache! A cannabis accounting expert can help your business succeed by taking some of these stresses off your plate. So if you’ve been wondering why you need a professional accountant for your cannabis business, here are just a few headaches I help cannapreneurs like you solve every day.
Audit Stress and Compliance Issues
The 280E tax code can be a significant headache. Because cannabis is still classified as a Schedule I substance, expenses involving the production, distribution, and sale of cannabis are not tax-deductible. These restrictions often cause cannabis businesses to look for creative ways to claim deductions. As a result, the IRS keeps a closer watch on the cannabis industry, increasing the likelihood of an audit.
With an experienced cannabis accounting expert on your side, you can maximize your deductions while remaining in complete compliance, and be prepared if an audit comes your way. Accounting professionals keep accurate records and do all the heavy lifting, making audits less of a headache for you if they happen.
You’ll have confidence that your books are in order for the handoff to your tax accountant. Coordination between accounting professionals and tax accountants is key to understanding your tax liability and eliminating surprises.
Juggling Multiple Software Applications
With no all-in-one cannabis business software on the market, you’ve probably been cobbling things together trying to make it work. One app for this, another app for that…and although there truly is an app for…everything, many cannapreneurs find themselves overwhelmed by all the different systems (state-mandated tracking software, accounting software, or POS systems, to name a few) in play, if they’re even using the right ones. If this sounds like you, you’re far from alone and can gain a great deal of relief by hiring a cannabis accountant. Experts on industry software, they can help you make sure you’re using the best cloud accounting software and point of sale systems for your business.
The Banking Struggle
Because the federal government doesn’t recognize cannabis as a legal substance, many banks are hesitant to work with cannabusinesses. Lack of access to proper banking forces many cannabis owners to keep large amounts of cash on hand, which comes with its own set of problems. Cash can be difficult to keep track of and is more prone to fraud, theft, and safety risks. A cannabis accounting expert can help you find a cannabis-friendly bank (if available in your state) or make sure your cash is correctly accounted for and managed.
If you don’t have access to a bank willing to work with cannabis businesses, it can be challenging to figure out where and how to get financing for your business. Your accounting professional may be able to offer recommendations on where to secure the funding you need.
Finding Cannabis Friendly Business Services
Unfortunately, the cannabis industry is still considered taboo by some professionals. As a cannabis business owner, you understand the struggle to find merchants and businesses that are cannabis-friendly. A cannabis accounting expert can refer you to the right professionals to help your business succeed.
Deciphering Tax Codes and Laws
In addition to the 280E complications, some individual states tax cannabis sales. There are three types of state cannabis taxes: a tax based on a percentage of the price of cannabis (either the retail or wholesale price), the weight of the cannabis, or the potency. Some states even base their taxes on a combination of these criteria. A cannabis accounting professional can untangle the tax code and make sure your business is in full compliance.
Why You Need a Cannabis Accounting Expert
Running a cannabis business can be a lot of work with immense profit potential. The good news is that federal legalization becomes a more certain possibility with each new state legalizing cannabis. In the meantime, an accounting professional can help cure these headaches and help you be ahead of the curve when federal legalization is a reality. Schedule a call with me today if you’re ready to take the next step to cure your business headaches.