Ep. 62: It’s a Cash-Only World: Easing Cash-Based Headaches in the Cannabis Industry
03.15.2021 - By The Cannabis Accounting Podcast by DOPE CFO
As a cash-based industry, Cannabis is plagued with issues many businesses aren’t, from security issues to struggles with reconciling POS systems. The proper handling of cash can make or break a Cannabis company’s compliance, licensing, and profitability.
Cannabis CEOs, executives, managers, and investors are all affected when it comes to cash inconsistencies and miscalculations (so you have a huge responsibility as a Cannabis accounting professional). It is imperative that pristine books are maintained at all times. Cash handling systems must be implemented that monitor where cash is kept, where transactions are processed, and where inventory is held.
Join DOPE CFO founder Andrew Hunzicker, CPA on this week’s episode to learn his top tips to navigate the many problems inherent in a cash-only industry.
Tips Andrew will cover include:
✅Essential written internal controls and accounting policies and procedures: while properly writing down internal controls and accounting policies and procedures is necessary for all accounting cycles, it’s especially necessary for handling cash in Cannabis (which can help manage deposits, make payments, and reconcile with the POS system)
✅Importance of regimented cash counts: ensure all cash counts are made by shift with double counts, including supervisor recounts and controls (helping to prevent cash skimming and reconcile bank statements and sales)
✅Implementation of on-site safes: every Cannabis company should have on-site safes that are not accessible to any employees (those who take cash for transactions should not handle cash counts and deposits, keeping cash controls honest and accurate)
✅Breakdown of Form 8300: any time a Cannabis company receives $10,000 or more in cash in a single transaction or across multiple related transactions, it has to file an IRS tax form 8300 (Cannabis businesses who neglect Form 8300 are red flags for the IRS and abandoning due diligence could get your client in hot water)
Help your cash-based clients remain compliant and profitable with these necessary actions! Listen in today.
Want more great tips and insider advice on the Cannabis and CBD/hemp accounting niches? For more info on the DOPE CFO program, text DOPECFO to 345345 for our free Cannabis Accounting Guide. For more great tips and soundbites on Cannabis accounting and bookkeeping, make sure you subscribe today to our podcast.
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