If you are investing in a cannabis company that is setup as an LLC, you could have a “knock, knock” on your door by the IRS. Entity setup and asset protection are important to the owners and investors alike. For 280e businesses, the criteria for entity formation is tricky. The accountants at Bulldog Consulting can evaluate your present entity formation and see if it serves you in tax breaks and IRS audit protection for all involved.
As the IRS gears up for audits that it plans to ramp up in 2021 for cannabis business owners, I thought it would be interesting to mention a conversation I had with a licensed California distributor the other day.
The distributor did not know what 280E was. Because he was not “touching” the cannabis, he did not feel the need to be knowledgeable in 280E; however, he is “trafficking” it.
What we tell clients…If you had to get a licensed to do anything with cannabis, you must follow 280E guidelines for taxes. It won’t be the IRS’s job to prove you guilty. It will be your’s and your lawyer’s job to prove you are innocent. If you are not familiar with the Compliance Initiative Project, you need to learn about it. The accountants at Bulldog Consulting can help if you feel that maybe your books are not up to par. If you have a successful cannabis business and a DIY with your books, you should inquire on a second set of eyes https://lnkd.in/d3apB6R. We are remote cannabis accountants knowledgeable in the business of dope!
An article in MLive is reporting the sales of recreational marijuana during the COVID-19: January $9.8 M, February $14.8 M, March $21.9 M, April $27 M! Since the first recreational marijuana sales starting back in December of 2019, the industry has grown tremendously in Michigan. We have racked up $15.2 M in new tax revenue between 6% sales tax and 10% excise tax.
As a Michigan-based accounting firm, this has stimulated our growth as well, especially through this pandemic! We look forward to growing more relationships with those entering and already in the industry. Congrats to the Michigan Marijuana business entities! Give us a call today if we can benefit your business in this growing economy!
Not finding quite everything you need in QuickBooks Online? Here are some handy add-on apps available.
QuickBooks Online may work for you just fine as is. After all, it was designed to meet the needs of the millions of small businesses that want to manage and track their income and expenses, create records and transactions, and run reports to gauge their financial health. QuickBooks Online was also designed to grow along with your business. But there’s no need for Intuit to add internal features to do so. In fact, that would make it too expensive and unwieldy for many companies.
Instead, Intuit has partnered with other small business websites to provides add-ons–applications that extend the usefulness of QuickBooks Online in one or more areas, like accounts receivable and payable, inventory, and expense-tracking. They integrate easily to share data and do the extra work you need. Here are some of them to consider.
You can certainly enter and pay bills using QuickBooks Online. And you can send invoices to customers and receive payments. But adding a connection to Bill.com gives you more advanced options for accounts receivable and payable. Simply send your bills to Bill.com by scanning, emailing, faxing, or taking a picture with your smartphone. The site’s automation tools turn them into digital records and route them through your specified approvers. Once approved, they’re paid electronically or by paper check. Invoices are just as easy to process; customers can pay by using PayPal, credit card, or ACH. Bill.com’s mobile app makes it possible to keep up with invoices and bills while you’re out of the office.
Are your employees still paper-clipping receipts to handwritten expense reports? This method is unnecessarily time-consuming – and often inaccurate. Expensify solves both problems. Your staff can take photos of receipts with their smartphones. Expensify then converts the expense information into coded digital records and submits them for approval based on your company’s policies. Credit card purchases can be automatically imported, too. All data is synchronized with QuickBooks Online in real-time and coded to reflect your preference of QBO’s expense accounts, customers/jobs, etc. Once you’ve approved a report, you can have the money deposited in the employee’s bank account the next day.
TSheets Time Tracking
TSheets employee scheduling software automates tasks that QuickBooks Online doesn’t do: scheduling and remote time-tracking for your hourly employees. Your staff no longer has to fill in paper timesheets. Instead, they can use their smartphones to track their hours and GPS location points. And while Excel is certainly better for creating schedules than paper, TSheets takes over that task, too. After you’ve approved timesheets, that information is sent over to QuickBooks, ready for use in your payroll processing.
Your employees can easily “punch” in and out using their smartphones. TSheets also uses GPS technology so that your staff members’ locations are always known to you.
QuickBooks Online performs some basic inventory management tasks. You can create records for items and use them in transactions, and keep track of the number of items in stock so you know when to reorder (or have a sale). SOS Inventory goes well beyond those capabilities. You can create sales orders, track cost history and serial numbers, and document work-in-progress (WIP). SOS Inventory supports multiple locations and the entire pick/pack/ship process.
You can create thorough customer records in QuickBooks Online and document some of your interaction. But it doesn’t facilitate true Customer Relationship Management (CRM) nor project management. Insightly CRM does both. It lets you build exceptionally thorough customer profiles so that you can view social streams, email history, and any events, opportunities, or events related to them. Its project management features include the ability to track by pipelines or milestones, define contact roles and custom fields, and generate advanced project reporting.
QuickBooks Online Integration Key
All of these apps can work in standalone settings, but their integration with QuickBooks Online and their mobile capabilities create powerful partnerships that help you serve both your customers and your employees in ways that QuickBooks Online alone can’t.
We’re not trying to sell you applications here. Our concern is that you’re getting as much out of QuickBooks itself as you can. We can steer you toward add-on solutions if that seems necessary, but we’re always happy to work with you on getting to know QuickBooks Online better and matching its capabilities to your company’s needs.
With the growing cannabis industry and the competition to be successful, CEOs know the importance of having Standard Operating Procedures in place. Standard operating procedures can prevent fraud within a companies. There are checks and balances and segregation of duties that must be implemented and be audit proof. Cannabis inventory needs to be strictly regulated and watched. Each state has their own “track and trace”
software where inventory counts and transfers must be reported,which is why having internal controls and procedures is a must and implemented monthly.
Manual counts of inventory should be done on a monthly basis and reconciled with Seed to Sale (ie Metrc), POS system, and accounting software. Cost Accounting is required for extract/edibles/cultivation if you want to maximize deduction under IRC 471-11. Your accounting team should be well versed and understand the seed to
sale process from start to finish in order to help you maximize your deductions.
Each month, you should be working with your accounting team too so they can correctly allocate cost between
Inventory and Cost of Goods Sold. You should have a standard operating procedure in place and an organized method for you to submit product information, percentage completion, and estimated yields, and other operating information that you will need to supply them with every month so that they can do the proper cost allocations. With the right tools and systems in place, this should not be a terrible burden on you (the business operator), and they should have a streamlined process in place to ensure that you are maximizing your deductions.
Without correct cost and absorption accounting, you will not know key information such as, how much it costs for you to grow a pound of cannabis. Standard operating procedures can outline the inventory process. We at Bulldog Consulting are trained and experienced in setting up standard operating procedures for cannabis CEOs. Schedule a consultation today to see how we help you setup a standard operating procedure template for you business.
Susie wanders in half an hour late two or three times a week. James checks his personal e-mail and monitors Internet auction prices at work. They’re both good workers — but they’re giving the other employees the wrong message. If you have problems like these, it might be time to create an employee handbook.
Sound too “corporate”? The truth is, even very small businesses can benefit from having an employee handbook. Having things in writing puts your employees on equal footing, gives you rules to enforce, and helps new hires learn the rules quickly.
Mission statement. Start your handbook by painting the big picture: What is your company all about? What are your goals? A mission statement can help your employees feel more like part of the team.
General policies. This is where you spell out your dress code; your hours of operation, pay periods, and holidays; the company policy on telephone and Internet use; and other general information.
Leave. This section covers your policies on sick leave, vacation time, maternity leave, jury duty, personal and funeral leave, and military duty.
Benefits. Here’s where you provide information about any health, disability, or life insurance, or any other benefits you provide.
Discipline. This part can get tricky. Some courts have considered employee handbooks as legally binding contracts. Check with an employment attorney for help and advice.
For more tips on how to keep business best practices front and center for your company, give us a call today. We can’t wait to hear from you.