Managing Common Software Issues in Cannabis Accounting
Software issues are common in cannabis accounting. Sometimes, the errors are human, others are technology-related, but there’s always a solution or workaround. Even when everything seems like it’s falling apart, there’s usually a simple explanation. Keeping a cool head is essential as it will help you stay calm, identify the issue, and get back on track before anyone loses their mind.
Today’s cannabis tech stacks can be complex. Inventory software, accounting software, manufacturing software, and seed-to-sale software should integrate, but when systems become disconnected, that’s when things can really go south.
Today, we’ll look at common cannabis software issues and discuss strategies to solve them.
Seed-to-Sale Tracking Software
Seed-to-sale technology is a compliance tool. It allows the state to track the cannabis supply chain—you guessed it—from seed to sale.
From planting to harvest, lab testing, distribution, production into the final product, onto the retail shelf, and into the customer’s hands, every single plant is accounted for.
If the product is intended for edibles, there are extra tracking steps in between to ensure product and packaging compliance. Seed-to-sale software enables taxation at the state level and helps them enforce laws, regulate distribution, and force recalls should there be a need to do so.
Since the entire state’s production is tracked and regulated through this system, it’s easy to imagine how things can go awry. Additionally, cannabis companies do not have a choice in the matter. The software “is what it is,” and most are buggy. Unfortunately, like many compliance systems, they are also prone to errors and system-wide downtime.
The state chooses which platform to use, but some of the most popular ones include Leaf Data Systems, AgriSoft, BioTrack, and Metrc.
All that is to say—issues with your seed-to-sale software aren’t always your fault. Systems may experience glitches or outages when regulations change or if the state is transitioning from medical to recreational use.
Here are a few of the errors you might experience:
User errors. Seed-to-sale systems aren’t designed to behave like consumer apps. They are complex and sometimes not very intuitive, so there may be a significant learning curve for users. The trouble with learning complex systems is that some users may avoid using them or enter incomplete data, which causes a domino effect of errors for others.
Solution: Adequate training is essential to ensure anyone using the system understands the workflow and how the system processes data. We recommend limiting the number of users and providing oversight for the first few months. Segregate inventory tasks to as few people as possible, as this is where the most damage can be done.
Inventory errors. Don’t rely on the software for accurate inventories. Physical counts are essential to ensure the numbers in the system align with reality.
Solution: Inventories should be done weekly and reconciled to both the POS and accounting systems. Doing so ensures reports are accurate and prepares you for audits.
Sync errors. Your point of sale must integrate with the seed-to-sale system. Occasionally, this connection fails, resulting in skewed inventory numbers, reporting errors, and regulatory compliance failure.
Solution: Check your sync status daily to ensure your numbers line up. If the integration fails, troubleshoot the connection to get it back on line as soon as possible.
Data transfer errors. Sync errors are relatively simple to recognize. Data transfer errors can be more subtle and easier to miss.
Solution: Check your data daily to ensure it transfers efficiently. If not, take manual notes until you can correct the issue. Often, it’s a matter of fixing the connection to the POS system. If you are not confident about the process, you may have to call support when you have time.
Cannabis Manufacturing Software
Cannabis manufacturers use specialized software to manage the process of turning cannabis into various processed products, like beverages, edibles, topicals, oils, etc. The software helps to manage these processes, track ingredients and batches, and control inventory.
Additional processes cannabis manufacturing software can manage include compliance, documentation, quality control, lab testing results, ingredient traceability, and regulatory reporting. It generates reports on inventory, costing, and production volumes and ultimately integrates with seed-to-sale systems.
You might imagine this integration is where many errors happen, and you would be correct. They tend to do so quite often. However, the nature of the software itself is quite glitchy, as the most-used systems were created several years ago and have not seen significant innovation.
Despite the above considerations, these systems are essential tools in your kit. They generate a Bill of Materials (BOM) for every product, which is critical to determining direct and indirect production costs, including labor, assembly, and more, many of which must be itemized appropriately to apply to COGS deductions.
The most commonly used manufacturing software systems in the cannabis industry are Canix and Katana MRP.
Perhaps the biggest issue you’ll encounter with manufacturing software is ensuring accuracy. There is, unfortunately, no way to manage this through automation, so you’ll have to resign yourself to frequent reconciliations.
Inventory Software
Your inventory is your business’s most valuable asset and the lynchpin of all regulatory and financial reporting. Inventory accounting requires meticulous control and regular reconciliation to all connected systems—POS, seed-to-sale, manufacturing (if applicable), and accounting software. This is the only way to ensure your reports are clean and audit-ready.
If the inventory is off, none of your systems will be accurate. You must take the time to investigate the discrepancy (hint: it won’t always be a software issue) and amend the appropriate entries to rectify all systems. Physical counts are the most critical as they are the primary source of truth.
Your POS might say you have twelve bags of gummies, but only ten are on the shelf, and the seed-to-sale system shows 13. A little detective work will usually help you get to the bottom of it.
The Human Side of Cannabis Software Issues
Technology is great when it works. But let’s remember that humans are the engines driving the software; more often than not, they are the gremlins in the machine.
Adequate training and support can reduce the number of software problems you encounter, and limiting the number of users on any given system will provide some consistency.
Speak to the experts at Growise today about how we can help.