With live reporting available to you at the click of a button and a CPA by your side to help you bridge the gap between goal and reality, running a cannabis business got a little bit easier.Internal controls - what’s the big deal for the cannabis industry specifically? Most cannabis companies are in the early stages of becoming a viable, profitable, long-term business which means the vast majority of their attention is being put to scale their operations. The legal cannabis market is a fickle one - we at Greenbooks understand that and actually believe it is even more important to have clear and concise financial goals for your company as a result. Starting with the top of your profit & loss statement with a revenue forecast, all the way down to net income, we work with our clients to establish realistic, achievable goals. + Why Choose Green BooksĮstablishing an ongoing relationship with the financial experts at Greenbooks will give your company a clear and direct set of financial goals, quarter after quarter. As part of our Forecasting & Budget service, we provide live planning analytics and tools to give your company an idea of how you are trending towards your goals. Greenbooks is happy to be a part of your day-to-day life. It only makes sense, then, to regularly track progress towards those targets and make business adjustments over time to meet those targets. Clearly, a big step in the forecasting process is setting the targets in a logical, thought-out process. The question every business owner should be asking themselves is: "Are we trending towards hitting our targets?". At end of the year, comparing your re-forecasting efforts to your original budget + Planning Analytics For those in the legal marijuana markets who don't have that luxury, we find that 4-6 weeks as a forecast period makes sense. Typically large public companies will re-forecast their financial goals every quarter. Goals change too - almost too often, in fact, in this industry due to the changes in regulation. The fiscal year outlook in July may be a completely different animal than what it looked like in January. All financial results for the year are compared against the budget. Once a fiscal year's budget has been finalized, it is typically set in stone and not revised. Either way, a budget is typically "set it and forget it". Depending on the size of your organization setting a budget can be a huge task or a relatively small one. Greenbooks CPA experts will work closely with you to examine prior year's revenue and expense data and get an understanding where you want to take the company. How are you going to allocate your funds properly? Which product is going to result in the most sales? The most profit? Is your business prepared to scale?Ī budget is a scientific approach to setting financial goals, typically for a fiscal year. Attempting to expand into three new product lines at once without a clear financial plan is probably going to end in disaster. During the course of the year, all three have been legalized in your state and your small stores suddenly have the ability to multiple in revenue many times over. You owned a small chain of retail stores selling medical marijuana. Suppose one year ago in your state, recreational marijuana, hemp and CBD were all illegally sold on the black market.
Let's give an example using product types. With how quickly things change in this industry, its entirely possible to have different goals for product sales on a quarterly basis. Establishing a budget and feedback loop how your company is doing against that budget is going to help you immensely in running your organization. With the constant changing regulation and lack of good cash management controls many companies struggle to even have a set of reliable books. Setting financial goals for an organization in the cannabis industry is an interesting topic.
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