Distribution company bookkeeping for CBD, hemp, and cannabis products is unique because the produce is in an emerging industry. As a person entering this market space, you may have many questions for a distribution company accountant. You may also be at the beginning stages where it’s necessary to seek CFO business advisory services to help properly form your company. Let’s address some of the big concerns, tips, and details you should consider as you explore distribution company tax planning, bookkeeping, and accounting.
The Unique Challenges of Distributing Hemp, CBD, and Cannabis From an Accounting Perspective
Currently, almost every state has its own very specific regulations and requirements regarding matters of taxation, regulation, and licensing for CBD products. What’s more, attitudes and laws regarding this industry are constantly changing. That puts the responsibility of keeping up with changing rules on the shoulders of distributors. This is one of the reasons why having an agile, informed accounting system is so important. The goal here really is to stay in compliance while also formatting distribution company bookkeeping to try to harvest the biggest profit.
The Essentials to Cover With a Distribution Company CPA
A system that allows you to generate monthly reports may be the lifeblood of your organization as you learn the ropes of this industry. Some of the niche elements that your company may need to thrive include budgeting, monthly profit and loss reports, payroll reports, and tax reporting. Cannabis, hemp, or CBD distribution company tax planning requires a very finely tuned path with reliable reporting. Let’s explore some of what may be on your plate as a professional distributor.
Distribution Company Tax Planning
Distributors are responsible for both collecting and submitting a variety of taxes at several levels. For this reason, working with a distribution company accountant is highly advisable. Here’s an overview of some of the tax responsibilities you may be looking at:
- cultivation taxes
- excise taxes
- use taxes
Distributors in the supply chain for hemp, CBD, and cannabis products actually have a unique burden because they are required to file tax records after they collect taxes from retailers and cultivators. That means that a distributor has tax responsibilities both on the collection side and the reporting side. Cannabis, CBD, and hemp tax regulations and distribution requirements vary drastically by state. For instance, some states require sales tax for some CBD products while waiving taxes for products categorized as “medical” goods. One of the big things to figure out when sitting down with an accountant is how to create a clear system for addressing state-specific tax rates.
Let’s talk about forecasting. It’s important for all industries. It’s particularly important for CBD distributors because they need to be able to anticipate things like product demand, labor needs, appropriate marketing capital, and other business needs when attempting to become established in a market. Today’s numbers can often be used to peer into next year’s performance.
Distribution Company CFO Business Advisory Services: Working to Make Your CBD Business Thrive
A distribution company financial adviser may help whether you already have an on-staff distribution company CPA or you need full-scale bookkeeping support. We can expect that laws and rules regarding state and federal tax and reporting obligations for cannabis, hemp, and CBD distributors will continue to change and evolve with any new legislation. That means that ongoing support from a distribution company financial adviser may help to set your business up for profitability and longevity.
At Fusion CPA, we offer a variety of business services that cover accounting, tax planning, tax preparation, and distribution company CFO business advisory services. Our dynamic team is here to help your company apply a mix of financial planning, forecasting, and reporting to help you do the most with the capital you’re working with. We may also be able to evaluate your current strategy to see where there are gaps and room for improvement. Let’s work hard to make sure you’re in full compliance with all tax requirements based on the products you’re selling, where you distribute from, and where you distribute your products. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.