Working with an Accountant that specializes in cannabis accounting will be able to help you succeed in this business and avoid any major roadblocks. As more states work toward legalizing medical and frivolous cannabis use along with commerce, the number of cannabis businesses are rising at the same time. Although cannabis dispensaries along with grow operations confront many similar issues as an emerging business has to deal with, they as well have a distinctive array of challenges.
1. Obtaining their Bank Accounts
A most fundamental problem, among many others,
facing those in the cannabis industry is how to get a bank account. Since cannabis remains to be a federally regulated substance, a lot of banks are on guard against accepting cannabis clients. Although there have been guidelines issued by the federal government to banking institutions regarding permissible cannabis state companies, most of them are not keen about taking the risk of accepting a cannabis business as an account holder and client.
An Accountant will assist you to find your needed banking services, at a minimal cost possible.
2. Making Use of GAAP to Avoid Trouble
Generally accepted accounting principles, or GAAP, are the established standards that regulates business on how they are supposed to keep the books they have and their account as well for things; for example, depreciation.
A number of federal bureaus are aggressively observing cannabis businesses as well as scrutinizing their practices in the business. Two very dangerous agencies that cannabis businesses have to contend with are the SEC as well as the IRS. These two agencies can impose a penalty on the business and can also submit criminal charges.
By using GAAP, you and your cannabis business will be able to evade any of the terrible consequences once these agencies go for an examination of your books.
3. Preventing Tax Traps
Taxes are never easy for businesses. However, the IRS has even made things harder for the cannabis industry by severely restricting their tax deductible expenses. If you have a cannabis industry Accountant with enough experience, he/she will be able to help you out in tax planning and also tax compliance.
4. Living through an Audit
Audits have always been rough, but if you’ve got an agency doing the audit that views the entire industry as illegal, then audits can especially be painful. An Accountant at your side during an audit is perhaps the only way you will be able to outlast the ordeal.
5. Understanding the Figures
Accountants are trained in the calculation and interpretation of the major financial indicators for businesses. With the cannabis industry being very competitive, you will need an Accountant to help you understand the strengths and weaknesses of your business as regards of its finances. At the same time, you will need their calculated guidance about making the best tax as well as investment decisions with regards to your business future.