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Cannabis Accounting and Bookkeeping Best Practices

Accounting and bookkeeping saves money, facilitates tax compliance, and provides insight into company performance.

Tips, Tricks and Best Practices for Optimize Cannabis Accounting

You love growing cannabis, selling cannabis products, or simply participating in this revolutionary emerging market. What you don’t love is the technical accounting and bookkeeping practices happening behind the scenes that directly impact the success and growth potential of your cannabis company. Getting accounting and bookkeeping Standard Operating Procedures right saves money, facilitates tax and regulatory compliance, and gives you strategic insight into your company’s performance. Failing to do accounting and bookkeeping correctly can result in lost revenue, regulatory infractions, and tax troubles that can undermine performance.

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How GreenGrowth CPAs Can Help Support Accounting and Bookkeeping

The accounting landscape is always evolving, and our team of Ex-Big 4 CPAs stay on the cutting edge of developments that will affect your company. The services that we offer to the cannabis industry cover nearly every aspect of accounting and reporting for public and private companies. Understanding the financial performance of your cannabis company empowers you to make smarter business decisions, attract investors and improve internal and external confidence. Maintaining an accurate and compliant financial record is critical to understanding your business and we can help reduce the time it takes to close your books and reduce errors in the closing process. GreenGrowth CPAs will help you architect a consistent process that abides by SEC reporting guidelines and streamlines your ability to report to all stakeholders of your company.
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The financial close process includes a few different steps. First, we review and reduce the account balances before the accounting cycle is due to close. We begin by looking at the journal entries for each transactional activity.

This then will guide us to the review stage. We close financials within 10-15 days by helping your company upgrade their current close process. This helps shorten the number of days to close books (within that 10-15 day range) and designs processes around closing which improves the accuracy of numbers presented.

  1. To close the revenue accounts – This requires moving the credit balances in the revenue accounts to a clearing account called the Income Summary.
  2. To close the expense accounts – This requires moving the debit balances in the expense accounts to a clearing account called Income Summary just like Step 1.
  3. To close the Income Summary account – This requires moving the balance of the Income Summary account to the Retained Earnings account.
  4. To close the dividends/withdrawals account – This requires moving the debit balance of the Dividends account to the Retained Earnings account.

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