How the Cannabis Industry Is Booming

Posted by Sunder Singh on October 16th, 2019

Cannabis industry is growing faster than never before! There's a demand for accounting professionals and cannabis bookkeeper role to help manage it. Let us understand how to grow and practice and confidently serve thousands of newly-emerging business in the fastest growing industry. Legally-licensed cannabis companies are being shut down and/or are facing penalties and fines, after having invested hundreds of thousands of dollars, due to poor accounting practices. Cannabis companies require accurate accounting records to remain ready for audit. It is helpful to understand the core skills of the Certified Public Accountant (CPA), the cannabis bookkeeper and the Enrolled Agent.

Understand the Types of Accounting Professionals

Certified Public Accountants: CPA maintains and monitors the financial records. They also play an important role in preparing tax returns during tax season. To qualify as a Certified Public Accountants one must take a certain number of accounting-related certified courses, pass a rigorous examination and be licensed in at least one state. Only a Certified Public Accountants will audit, review and give an opinion on a business’s financial statements. The CPA gives assurances that financial statements may be relied upon by third parties such as a bank or a potential investor.

Cannabis bookkeeper: The role of the Cannabis bookkeeper is to review all of a business’s transactions and assemble this information into useful financial information. Bookkeepers also sometimes prepare state tax returns and other government filings. Cannabis bookkeeper ensures that the Transactions between commonly owned legal entities should reflect actual business practices and legal agreements. They should also be documented with proper legitimate contracts. It is the legal agreements and business practices that dictate how a transaction is properly recorded on the books.

Enrolled Agent: Another category of accounting professional is the Enrolled Agent (EA). The EA may prepare tax returns and otherwise represent clients before the Internal Revenue Service. Enrolled Agent must pass a comprehensive IRS exam or have experience working for the IRS. Only then they will be qualified as Enrolled Agent.

Choose an Accountant with a Strong Professional Network

Accountants can help you with budgeting, minimizing costs, evaluating financial opportunities and complying with tax and financial reporting. Thus, a good accountant can help you meet the financial goals of your company. Many skilled accountants and bookkeeper are working in the cannabis industry and it is important you find one right for your cannabis business.