The Benefits of Outsourcing Your Cannabis Accounting

Business process outsourcing (BPO) is a strategy used by small businesses everywhere. Small companies can’t always afford to support full-time staff, and outsourcing provides a more affordable alternative that provides access to niche talent when you need it—without the payroll overhead.

Accounting is one of the more popular outsourcing services. For cannabis businesses especially, it’s critical to ensure the books are clean and up-to-date. Failure to do so can result in costly mistakes that impact profitability and risk non-compliance with state and federal regulators, not to mention the IRS.

Outsourcing accounting helps you tap into expert knowledge and may well provide you with financial strategies that strengthen your bottom line and reduce compliance risk. It will almost certainly put more time into your day and help you sleep better at night.

The Benefits of Outsourcing

When you hear the word “outsourcing,” you may imagine a nameless, faceless team in a foreign country handling your business. While plenty of offshore companies provide outsourced services for various functions, outsourcing can be accessed right here at home.

Cost reduction

While one of the main reasons to outsource is to reduce overhead costs, outsourced accounting services provide many more benefits you may not have considered. In addition to cost savings, you’ll enjoy flexibility, as you can access services when and as needed.

So, say you do most of your own bookkeeping but only need someone to file returns, prepare taxes, and reconcile accounts at the end of the month. With outsourced services, you’re not locked into ongoing costs. Some services operate on a subscription basis, but many offer pay-as-you-go terms, so you can set up the engagement in whatever way works best for you.

The costs are more predictable and easier to manage, making it easier to budget for business growth.

Industry expertise

For cannabis operations, working with an accountant who’s experienced in your industry and its unique concerns is essential. Cannabis accountants understand the challenges you face. Beyond financial management, they can advise you on best practices, processes, and strategies to ensure efficient and compliant operations.

Risk reduction

Cannabis accountants can also help you reduce risk in several ways:

·      Identifying potential red flags before the IRS does

·      Reduce hiring risk and cost due to employee turnover

·      Ensure accounting consistency to avoid unnecessary disruption

·      Mitigate the risk of data breaches by using secure systems and software

Increased efficiency and productivity

Most small business owners—cannabis operators included—are not professional accountants. There are exceptions, of course, but we’d wager it’s not why you got into the industry in the first place. When things get busy in other aspects of the business, it’s not unusual for the focus to shift where it’s most needed.

An outsourced cannabis accountant takes financial tasks off your hands, ensuring the work gets done without you having to give it a second thought. You’ll have more time to do what you do best and rest easy knowing your books are in good hands.

Scalability

We all dream of success, but when it happens quickly, some aspects may suffer if not adequately overseen. Scale is not an issue when you outsource, as you are working with a team that has your back. Similarly, if your business experiences seasonal or cyclical changes, you can scale up or down as needed without missing a beat.

Confidentiality

Outsourcing companies have robust solutions to protect your financial data from unauthorized access. Accounting services adhere to stringent data security regulations, supporting compliance and minimizing the risk of internal fraud.

Accurate, on-time reporting

An outsourced cannabis accountant ensures reporting accuracy, timeliness, and compliance for all financial reporting and tax filing. They understand the unique differences between cannabis operations and small businesses in other niches and are on top of legal, regulatory, and taxation changes that affect your business.

How Much Time and Money Can You Save with Outsourced Accounting?

While putting a precise number on your savings would be challenging, it is still quantifiable.

Think about how much time you spend on accounting and financial tasks. Let’s say you’re paying a full-time salaried employee to do the work. Comparatively, an outsourced accounting service comes at a fraction of that cost. If the tasks take an average of 10 hours a week, that’s all you’ll pay for.

Plus, you’ll need to factor in time off, vacations, sick days, and unplanned absences. An outsourced service does not take time off, as there is always a team member to jump in if your regular person is away.

In another scenario, perhaps you do your own financial work. It likely takes time and attention away from your day or forces you to work additional hours just to get it done. Or perhaps it’s not getting done. If it’s the latter, it’s a source of anxiety that keeps you up at night, especially when tax time is just around the corner.

Having an outsourced cannabis CPA ensures the job gets done. The time you save can be allocated to other things, like innovating new products, improving production processes, or working more closely with your employees to ensure they are doing their best work.

Your full-time back-office employees might be costing you more and delivering much less than outsourced accounting would. Depending on your current business model and the number of employees an outsourced service can replace, you can expect 20-50% cost savings.

As for time savings, you can’t put a price on that. Your time and expertise are valuable, and competition is fierce. If you want to succeed, you need to focus on what you do best and partner with experts who can support you in achieving your business goals.

Speak to Us About Outsourcing Your Cannabis Accounting

Growise is dedicated to cannabis and psychedelics business success. Our CPA team offers niche expertise in high-compliance environments and can provide you with the support and financial strategy you need to reach your business goals.

Set up a call today to find out how we can help.