Enabled a marijuana dispensary to be audit ready
- A Denver based marijuana dispensary
Overview of client
- The client is into the production & selling of marijuana products, viz, medical & recreational
- Sourcing is done internally through in-house grow facility & also by procuring from outside for retail selling
Outsource function opted
- Bookkeeping from scratch to complete the backlogs & keep the books current
- Being in an unorganized industry, the business owners had the business transactional information in excel spreadsheets & the data available was incomplete & was largely unorganized
- POS system was not robust enough to provide the client with required information as there was complete monitoring by government audits and review
- Seting up of COA including WIP accounts
- Recreate the books as per the federal tax requirements (280E)
- Inventory tracking & WIP calculation
- Monthly closing & presentation of books
- Matching of inventory with the vendor invoices & the follow up with the vendor for statement & bills to approve the overdue payments
- Establishing a tracking system to prevent any misuse of POS collections
- Established a system to import the required data for bookkeeping from POS like daily sales, inventory purchase, Inventory adjustments etc.
- Established a tracking system to match the POS v/s QB numbers on a monthly basis so that the data as per the POS (govt. audited) and QB match at the monthly level.
- Restructured the COA to reflect department-wise revenue & expense items to supply the client with analytical information like what product/service is more profitable and what isn’t etc.
- Set up the item list for inventory tracking in QB and established a worksheet to match the closing balances as per POS by item on monthly basis.
- Created a tracking sheet for POS collections and deposits so as to enable the client to manage their cash collections efficiently and avoid any misuse of it by reporting any short or excess cash reported on any particular day.
- Booking of entries was changed to comply with 280 E requirement
- Vendor accounts were reconciled with the inventory received & the statements with regular & relentless follow-ups
- WIP entries finalized & calculating methodology was determined & applied regularly
- Backlogs were completed in time per client’s expectations to make the books current & monthly closing was initiated
- Started publishing monthly financials at predetermined timelines
Key success points
- Successful planning & implementation of new accounting processes to the client’s satisfaction
- Completion of backlogs well before client’s expectation
- The client is happy & relieved as he now has the books up-to-date & tax-ready
- With all the paperwork in order, the customer was able to present the financials for government audit
- Monthly closing is being done & financials are being published regularly
- Once in disarray, the process & documentation is now well organized
- Vendors are happy now that their old accounts are being settled
- Weekly status calls are being scheduled to establish regular communication for quick updates & follow-ups