The Benefits of Fractional Bookkeeping Services for Cannabis Companies
Despite all signs that point to a booming cannabis industry, operators are constantly challenged to stay profitable in this highly regulated environment.
Margins are tight, and meticulous accounting and tax planning are essential to ensure compliance, maximize deductions, and minimize the tax burden.
It’s no secret that IRC 280E is a massive threat to cannabis business continuity—and most operators will agree that the time they spend on administration and compliance tasks takes away from time and resources they could be channeling into business growth.
If you can relate to these issues, fractional bookkeeping services might be the solution you’ve been looking for.
What are Fractional Bookkeeping Services?
Fractional accounting and bookkeeping services are a way to fill the gaps in your accounting workflows without taking on a full-time employee. Essentially, it’s an outsourced service tailored to your specific needs that you can engage anytime you need it—during crunch times, preparing tax filings, compiling reports, preparing for an audit, or just to ensure you don’t get behind with your daily bookkeeping tasks.
A fractional cannabis bookkeeper has the skills and industry knowledge to step in and manage your day-to-day finances without requiring a lot of training and can get you through busy times without sacrificing compliance.
To ensure profitability in the tight cannabis regulatory environment, every dollar must be accounted for. Long hours and high stress may cause you to prioritize things other than financials, and we get it – bookkeeping isn’t always the most fun thing to do when you’re stressed and exhausted.
Fractional bookkeeping helps to ensure the work gets done and gives you access to dedicated industry knowledge, putting money-saving tips and financial optimizations at your fingertips without any extra effort on your part.
Need more convincing? Read on to discover the benefits you can expect from a fractional bookkeeping engagement.
Benefits of Hiring a Fractional Bookkeeper
Here are the top benefits of fractional cannabis bookkeeping.
Only pay for what you need
Fractional bookkeepers are contracted on an as-needed basis. There’s no need to hire and train additional staff, add to your payroll, pay benefits, or cover paid time off, saving you significant resources while ensuring you have top financial expertise. Bring them in for projects or to fill the gaps – it’s about what you need, when you need it.
Niche industry expertise
Your fractional bookkeeper is well-versed in the cannabis industry, so a., there’s no learning curve, and b., you may gain additional insight that can help you optimize your company’s finances. Fractional cannabis bookkeepers understand what’s needed to keep your books clean and compliant for tax and seed-to-sale reporting and will work with you to align processes for maximum efficiency.
Keep books clean and up to date
Cannabis businesses face intense scrutiny from federal and state regulators and the IRS. Audits are common, and there is no room for error. When your books fall behind, however, it can lead to non-compliance, fines, penalties, and even more eyes looking in your direction. Whether you’re facing an audit or need to share company information with your investors and partners, fractional bookkeeping services help to ensure your books are clean and ready at a moment’s notice.
Ensure compliance with state and federal taxes
Poor financial management can lead to non-compliance. Falling behind on taxes can cause a domino effect of negative consequences that range from fines and penalties to license revocation and business discontinuity.
Cannabis taxes are complex at the best of times. Federal taxes are one thing, but every state has its own rules, and in many cases, you also have to comply with jurisdictional cannabis laws in your local area. To add fuel to the fire, these rules are evolving constantly. Keeping up might seem like a full-time job, but with a cannabis finance expert on call, you’ll have the confidence of knowing you’re always current with existing and emerging legislation.
Identify issues before they become problems
Business moves quickly. If you’re not staying on top of your daily books, you could risk missing issues that could become massive problems. For example, if your inventory and seed-to-sale systems don’t reconcile, you could face fines and audits at the state level. Plus, missing inventory or insufficient cash could indicate a systemic theft issue in the company that could escalate rapidly.
A fractional bookkeeper is trained to notice anomalies and will alert you immediately so you can investigate, mitigate, and remediate the problem before it becomes a bigger issue for you or your business.
More time to devote to building your business
Financial work is detail-oriented and time-consuming. If you’re a solo operator, you likely wear many hats, and some tasks will inevitably suffer, get put on the back burner, or be ignored entirely until it’s absolutely necessary to jump on it.
So why pile on all that additional stress? Hiring a fractional bookkeeper takes one of the most error-fraught and frustrating aspects of the job off your desk. A trained cannabis financial professional can do the work in a fraction of the time it would take the average business owner, and often more accurately. Think of all the things you can do with your time if you didn’t have to focus on numbers!
Support during expansion
Business expansion in cannabis can be tricky, and preparation is critical. A fractional bookkeeper can help you compile cost projections and forecasts to support expansion plans, to ensure you are making informed decisions. This is just one example of a project-based engagement where finance expertise can be the difference between success and failure.
Know where your business stands at all times
Finally, you’ll never have to scramble for financial data as your books will always be up to date. Accurate reporting and financials help to inform short and long-term business decisions, ensuring you’re always thinking one step ahead.
The Bottom Line
If the prospect of a fractional bookkeeper sounds pretty good, speak to the cannabis finance experts at Growise today. We’d love to learn more about your business and show you how we can help. Set up a call, and let’s talk growth!