How to Track Cannabis Business Expenses and Revenue

The cannabis industry is flourishing, but keeping track of finances can be a challenge, especially with federal restrictions on traditional banking methods. In order to have success in the cannabis industry, you need to track cannabis business expenses and revenue.

For cannabis businesses, accurate expense tracking, sales recording, and employee hour monitoring are crucial for smooth cannabis payroll processing and overall financial health. It is also crucial for proper cannabis payroll tax reporting. This is one of the many reasons why using a cannabis payroll company is important.

The question still remains though, "How do cannabis businesses track expenses and revenue?". Well, aside from using cannabis payroll software, there are best practices to help keep track of cannabis finances. 

Cannabis Business Expenses and Revenue

Cannabis business expenses depend on the type of business you run, whether you are in manufacturing, growing, or retail. However, tracking such things can all be done using the same tools and practices, going hand-in-hand with cannabis payroll processing.

Here are some effective methods to make life easier when tracking cannabis business expenses and revenue:

Embrace Accounting Software

Investing in specialized accounting software designed for cannabis businesses simplifies expense categorization, sales tracking, and reporting.

These programs often integrate with point-of-sale (POS) systems, automatically capturing sales data and reducing manual entry errors. Consider features like:

• Seed-to-Sale Tracking: Track cannabis inventory from cultivation through processing and sale, ensuring compliance with complex regulations
• Multi-State Functionality: Manage finances for businesses operating across multiple states with varying cannabis laws.

Businesses looking to learn more about how to get started with cannabis payroll and accounting software can contact PayNW.

Track Cannabis Expenses Meticulously and Categorize Them

Develop a detailed chart of accounts to categorize all business expenses.

This allows for clear cost analysis and helps identify potential areas for financial optimization. Include often-overlooked expenses specific to cannabis businesses, such as:

• Cultivation Costs: Track expenses for lighting, nutrients, fertilizers, and other cultivation supplies.
• Licensing and Regulatory Fees: Account for costs associated with cannabis business licenses and ongoing regulatory compliance.

Utilize Cloud-Based Solutions

Cloud-based accounting software offers real-time data access and ensures secure recordkeeping.

This is especially beneficial for businesses with multiple locations and allows for collaboration between accounting teams and management. Utilizing cloud-based solutions is one of many best practices for cannabis payroll.

Implement Time Tracking Systems or Timekeeping Software

Biometric time clocks, timekeeping apps, or dedicated employee scheduling software can help ensure accurate employee hour tracking and minimize payroll errors. Cannabis timekeeping can also help with 280E Compliance.

Consider features for cannabis businesses like:

• Compliance Tracking: Ensure overtime is calculated and tracked correctly, and breaks mandated by labor laws specific to the industry are documented.
• Project Management: Monitor employee hours dedicated to specific projects or cultivation stages, allowing for better cost allocation.

Other benefits of cannabis timekeeping software include:

• Accurate Payroll Calculations: Accurate timekeeping and expense tracking lead to error-free payroll calculations, boosting employee morale and ensuring compliance with labor laws.
• Data-Driven Decision Making: Detailed financial reports generated through efficient tracking systems empower informed business decisions. Analyzing expenses and revenue helps identify areas for cost reduction or revenue growth.
• Enhanced Compliance: Meticulously documented financial records make tax audits and regulatory compliance a breeze.

Find a Cannabis Accounting Software Company

At PayNW, we understand the unique challenges faced by cannabis businesses when it comes to payroll, timekeeping, and Human Capital Management (HCM).

Our comprehensive suite of services integrates seamlessly with specialized accounting software designed for the cannabis industry.

We offer:

• Payroll Processing Tailored to Cannabis Businesses: Manage complex tax calculations, including state and local cannabis taxes, with ease.
• Time Tracking Solutions: Ensure accurate employee hour tracking, including breaks and mandated compliance breaks, with our timekeeping solutions.
• HCM Tools for Streamlined Management: Manage employee benefits, onboarding, and offboarding processes efficiently with our user-friendly HCM platform.

Ready to take your cannabis business to the next level? Find a cannabis payroll company that can handle your payroll and HCM needs so you can focus on what matters most – cultivating high-quality products and serving your customers.

Contact us today to discuss how our payroll, timekeeping, and HCM solutions can be customized to meet your specific needs.