Accounting Services for Cannabis Cultivation
Accounting for cannabis cultivation 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. Managing §280E starts with a monthly, hand-counted inventory count. In addition, there are multiple areas to consider regarding completing the accounting for your cultivation including:
- Industry Specific Chart of Accounts
- §280E Knowledge and Expertise
- Harvest Tracker
- Application of §471
- Accurate cost accounting between your state seed-to-sale system, POS system, and accounting system (They do not play nice with each other!)
If your inventory count isn’t accurate then your cost accounting won’t be accurate. You need someone with the experience with cannabis cultivation accounting to keep your books clean and ready for audit – not to mention lowering your taxes!
Finally, if your accounting is not accrual or GAAP based, your taxes are guaranteed to be higher than they need to be. There are certain expenses that can only be allocated to COGS if accrual accounting or GAAP is used. Don’t pay more than necessary to the IRS!