Key Takeaways:
- Managing finances in the cannabis industry is complex — with strict regulations, evolving tax laws, and banking challenges.
- Outsourcing your accounting function can help you navigate compliance, manage cash flow, and streamline operations.
- Benefits include cost savings, access to advanced knowledge, and improved financial reporting.
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As a professional in the cannabis or hemp industry, you’re navigating an evolving landscape filled with regulatory hurdles, cash flow challenges, and tax complexities. Whether you’re managing a cultivator, manufacturer, distributor, or dispensary, staying on top of compliance while scaling your business can be overwhelming.
Outsourcing your accounting offers a powerful solution — giving you access to extensive experience, strengthening internal controls, and allowing you to focus on strategic growth. But how do you know if it’s the right move for your business?
What Is Outsourced Accounting?
Outsourced accounting can have several meanings including:
- Fractional or temporary controller
- Special project accounting manager
- Fractional CFO
- Bookkeeper
5 Reasons to Outsource Your Cannabis Accounting
Here are key signs that outsourced accounting could be the best next step for your cannabis company:
1. You’re Struggling with Tax Compliance and Complexities
Cannabis taxation is complicated, especially with IRS Code Section 280E limiting deductions. State and local tax requirements vary widely, and tracking inventory properly for cost accounting is crucial. If you’re spending more time deciphering tax laws than managing your business, it may be time to bring in consulting professionals who are knowledgeable in cannabis financial regulations.
2. Cash Flow Is a Constant Challenge
Managing cash flow, accounts payable, and payroll efficiently is critical to keeping operations running smoothly. An outsourced accounting team can implement financial controls, improve cash management, and help you meet payroll and tax obligations without stress.
3. Your Financial Records Need to Be Organized and Audit-Ready
Accurate financial reporting is essential for regulatory compliance, securing funding, and long-term success. If your accounting team is overwhelmed with day-to-day tasks and struggling to produce clear financial statements, an outsourced team can bring structure, accuracy, and transparency to your records — helping you stay compliant and prepared for audits or sophisticated investors.
4. You Have to Scale Quickly
As the cannabis industry grows, so do the demands on your financial operations. Whether you’re expanding into new markets, acquiring licenses, or preparing for investment opportunities, your accounting needs may fluctuate. Outsourced accounting provides the flexibility to scale up or down without the costs of hiring and training an in-house team.
5. You’re Concerned About Security and Fraud Risks
If your accounting team is small or handling the majority of the accounting duties, the risk of financial mismanagement or fraud increases. Outsourcing adds an extra layer of oversight — implementing stronger internal controls and reducing the risk of errors or financial misconduct.
How Outsourcing Can Benefit Your Cannabis Business
Here are some key benefits of outsourcing to help your cannabis business grow smoothly and stay compliant:
- Industry-specific experience: Work with professionals who understand the nuances of cannabis taxation, banking restrictions, and regulatory compliance.
- Stronger financial controls: Improve security, reduce fraud risk, and implement better cash management systems.
- Improved reporting and compliance: Maintain audit-ready financials and meet tax and reporting requirements with confidence.
- Scalability: Expand or contract your accounting support as your business evolves.
- Cost and time savings: Avoid the high costs of hiring full-time staff while gaining access to skilled and knowledgeable financial support.
How MGO Can Help
At MGO, we offer tailored outsourced accounting and advisory solutions for the cannabis industry — providing the right-size support for your organization’s unique needs. Whether you’re looking to support your team with specialized knowledge or skills, manage day-to-day tasks, get assistance with regulatory compliance, or navigate complex transactions like M&A and capital raising, we’ve got you covered.
Reach out to our team today to learn how we can help streamline your accounting operations.