Tips for Cannabis Business Accounting
There is a tremendous increase in the number of countries that are legalizing the usage of cannabis. The usage of the medical use of marijuana is legal states in 33 states while 10 of them have legalized the recreational usages. The states are stringent when ti comes to the taxation of marijuana. You are penalized if you do not comply with the accounting rules; the IRS and state examine the cannabis thoroughly to make sure that there is compliance. Therefore it is vital to be vigilant with the accounting your business.
When you are running this kind of business, it is always vital to make sure that you understand the federal regulation of the business. According to the law, cannabis business is not considered as normal, and consequently you are not likely to get the standard deductions such as the rent. However, business owner is allowed to deduct the expenses that are associated with the cost of sale. Labeling and packaging are some the expenses that are deducted.
There are different accounting methods that you can choose for your accounting business. Commonly, these businesses use the accrual and the cash methods. However, the cannabis CPAs recommend that you use the accrual method for your business. You will save money when you use the accrual method although it is complicated. The crucial processes ensure that tax is lower because the cost of goods sold will increase.
It is vital also vital to make sure that you keep accurate bookkeeping. An IR auditor is likely to come to your premises at any time. Ensure, It is crucial to make sure that you maintain an actual record for your business.
It is always vital to make sure that you practice strong inventory management. It is vital to make sure that you track every product that you are going to handle in your business. The rules that governed the management of the stocks in the marijuana business is very complicated. You should discuss with the accountant when it comes to the inventory management.
It is vital to make sure that you have networked with other people in this cannabis business. There are many groups on social platforms like Facebook where you connect with other people in the business. Ensure that you have interacted with the other business people directly through the email.
Accounting for the cannabis business is very important. Finding someone who will provide you with the guidance. It is vital to make sure that you choose CPA who will assist you in matters of accounting in your accounting business. The accountant will design an accounting service and program that is going to fits your business needs. Look for a company that will provide you with the accurate, confidential, and powerful accounting solution. It is recommended that you investigate the service provider to make sure that they are suitable for your business.