QuickBooks for Farmers, But What About Cannabis Cultivators?
Quickbooks Online for Cannabis Growers
QuickBooks Online (QBO) can assist in creating a cannabis cultivator's chart of accounts. While this accounting software was expected to be a significant part of the cannabis industry, it does not replace CPA insights and Excel sheets.
However, for small operations, it offers a budget-oriented product. But its inventory features are limited.
Workarounds are essential for seed-to-sale products and it does not adequately track the various cannabis taxes. QBO is limited when it comes to state excise and local taxes on cannabis.
QuickBooks Premier Desktop for Cannabis Growers
Alternatively, some growers use QuickBooks Premier Desktop (QBPD). This can be a good alternative to QBO as the operator can choose between having it on a server in-house or having it hosted outside of their office.
Inventory management is possible for small cannabis grow operators. But for businesses with multiple verticals, this product will not be sufficient.
QBPD also allows for setting up and tracking of various cannabis-related taxes, including sales tax, city taxes, distribution excise, and cultivation excise. All in all, this is good software for financial reporting if you are an owner, manager, or investor of a cultivation operation.
QuickBooks Enterprise Solution
QuickBooks Enterprise Solution (QBES) can help cannabis cultivators who have multiple product lines or locations. For instance, if you handle cultivation and distribution, or have a full microbusiness.
Setting this system up allows all licenses under a single QuickBooks account. But there is also the option to break them up into multiple accounts depending on volume and staffing.
Similar to Premier, QBES is a desktop product. It can be hosted on an in-house server or set up on a remote server.
Key features that make QuickBooks Enterprise valuable for cannabis cultivators include advanced inventory management with lot tracking, multi-location support, customizable reporting for financial analysis, and the ability to handle higher transaction volumes than Online or Premier.
Accounting for Cannabis Growers FAQ
Does QuickBooks work with cannabis companies?
While QuickBooks can work with cannabis companies, it does not include cannabis industry charts of accounts. It also does not integrate with other cannabis software, which makes it challenging for CPAs and cannabis business operators looking to gain visibility into their finances.
Is QuickBooks an option for cannabis growers?
Even though QB is a good option for small dispensary owners, it is not the best solution when you need to track inventory across multiple facilities. We recommend our clients document everything using Excel sheets alongside QuickBooks. While we can use QB, it is not robust enough for most cannabis cultivators on its own.
Does METRC integrate with QuickBooks?
METRC integrates with QuickBooks, but cannabis growers still need inventory management software that integrates with METRC to make this work. Think of the inventory management software as a middleman bridging METRC with QB.
Is Gusto cannabis-friendly?
Gusto is cannabis-friendly, facilitating payments from cannabis growers to their employees. It is also easy to upload this information into accounting software. CPAs and other accounting professionals serving the cannabis space are even able to become certified partners with Gusto, allowing them to provide this solution to cannabis clients when they cannot find support elsewhere.
Benefits of Having a CPA Accounting for Cannabis Growers
For cannabis growers, having a CPA is an advantage. Even if you plan on keeping things simple by only using QuickBooks for your financial reports, having access to a proper chart of accounts and other features that are built into QB software will be beneficial.
A specialized CPA can spot mistakes that may have been made in order entry or how data was input into QuickBooks. First-hand experience working with and without QB helps clients avoid these mistakes altogether.
Furthermore, when it comes to deductions, it is challenging for cannabis growers to deduct their expenses. Expert CPA help with this process can save clients thousands, and sometimes hundreds of thousands, of dollars in taxes.
And then there is the data and analytics. The software can provide some of this information, but without an experienced CPA analyzing the progress, it is difficult to know what you are looking at and the best course of action to take. A specialized CPA takes the guesswork out of scaling cultivation operations.