Although it is still fairly new, the marijuana industry has great potential for growth, especially as more research on the medical benefits of cannabis is carried out. At the moment, however, legal cannabis sellers face a harsh federal landscape that makes it quite difficult for them to operate effectively compared to players in other industries. One of the biggest issues, perhaps, is the industry’s lack of access to banking services, and a business that doesn’t find ways to circumvent this limitation will have a tough road ahead of them.
Despite being denied access to banking services, you are still required to keep proper records. It is the most effective way of proving regulatory compliance and business growth, both to potential investors and the government if they come knocking. This may be a little difficult, as most legal cannabis sellers have to rely on cash payments, but it can still be done.
First, make sure any cash transaction conducted by your firm is documented and has an associated receipt. Records documenting vendor transactions, sales, payroll, and business purchases will come in handy when the IRS, investors, or accountants come calling, so make sure you retain them. Additionally, it would be better in the long-run if you got into the habit of documenting all financial transactions right from day one. This will prevent you from drowning in an ever-increasing pile of receipts and records as sales pick up.
Keep your personal and business finances miles apart. It is extremely easy to get confused and blur the line between the two, especially as the firm grows. Plus, if you don’t set proper boundaries between your personal and business finances, your bookkeeping will most likely be subpar and you may even end up using business finances for personal affairs or vice versa by accident.
Don’t let the fact that banks can’t transact with the cannabis industry yet hold you back. There are several mobile phone apps that allow you to skip the cumbersome process of going through tons of paperwork and organizing receipts. Apps like Expensify and HubDoc allow you to scan, upload, and create easy to read expense reports, saving you a lot of time and energy and making your bookkeeping a lot more efficient.
You can go even further and find yourself a good vendor management system. There are several cloud-based options that allow you and your vendors to record all your transactions easily. The fact that you mostly transact with cash shouldn’t make you neglect your bookkeeping. Proper and efficient bookkeeping is the only way potential investors will know whether your business is worth investing in and it will keep you out of trouble if the government ever comes knocking.
These are basics which established companies like Pure Extracts Corp. have nailed, and startups would do well to follow suit.
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
To receive instant SMS alerts, text CANNABIS to 21000 (U.S. Mobile Phones Only)
For more information please visit https://www.CNW420.com
Do you have questions or are you interested in working with CNW420? Ask our Editor
CNW420 is part of the InvestorBrandNetwork.