Accounting for cannabis manufacturing involves in-depth, full absorption cost accounting to manage §280E.
This means your direct and indirect costs are being allocated to Cost of Goods Sold (COGS) and inventory – lowering your tax liability. There are many areas to consider regarding completing the accounting for your cannabis manufacturing business including:
- Industry Specific Chart of Accounts
- §280E Knowledge and Expertise
- Application of §471
- Accurate cost accounting between your POS system, state seed-to-sale system, and accounting system (They do not play nice with each other!)
Your cost accounting won’t be accurate unless your inventory count is accurate. A monthly, physical inventory count is mandatory. We’ll take it from there! You need someone with cannabis manufacturing accounting experience to keep your books clean and ready for audit – not to mention lowering your taxes!
Your taxes are guaranteed to be higher than they need to be unless your accounting is accrual or GAAP based. If accrual accounting or GAAP is used, there are more expenses that can be allocated to COGS – lowering your taxes. Don’t pay more than you need to the IRS!