Deciding to hire a cannabis accounting firm in California might sound like a costly expense, but the benefits have the potential to quickly add up. Hiring a tax accounting firm improves the organization of financial information and allows business owners the ability to more freely focus on other tasks. When comparing accounting firms, weigh the benefits of hiring a firm with relevant experience and the potential costs, while considering how prompt the accounting firm is when responding. A cannabis accounting firm has the ability to make a small business more competitive while also saving money by cutting ineffective spending.
Best Cannabis Accounting Firms in California
When researching the various cannabis accounting firms within California, think about asking them small simple questions that you are already familiar with. This provides you with the opportunity to gauge their answers. Asking questions to understand how an accounting firm functions can improve your understanding of your partnership compatibility.
It’s recommended to have a strong professional relationship with a cannabis accounting firm and especially the specific accountants overlooking your company. A steady relationship fosters respect and productive communication. When comparing firms, think about the benefits that would best work for your company such as specialized accounting tools, varied accounting options, potential price points, and firm accessibility.
GreenGrowth CPAs
GreenGrowth CPAs was founded in 2014 and has over 700 clients within the cannabis industry. The company focuses on addressing the financial needs of cannabis-related businesses by providing information and assistance on areas of interest such as audit services, IPO services, tax services at both the state and federal level, accounting assistance, and advisory services. GreenGrowth CPAs have core areas of focus for tax assistance that delve into federal, state, and local specifications. The company even provides content on growing areas of popularity such as raising capital for cannabis companies as well as mergers & acquisitions. GreenGrowth CPAs tends to stand out from the crowd given its ability to provide support to multiple areas beyond California. One major benefit of the company is that it offers full-service assistance to closely work with the specific needs of each client. The company remains highly accessible with a contact page, phone number, social media pages, and provided physical addresses.
The exact prices are not stated given that the company tends to cater to individual client needs.
KWB Accounting PC
KWB Accounting PC was created specifically to serve the cannabis industry such as marijuana growers and cannabis dispensaries within the state of California. It provides a wide range of cannabis-friendly services such as bookkeeping services, profit and growth advisory, and tax services. The company focuses on compliance with both federal and state tax regulations. KWB Accounting PC also strives to promote efficiency and inventory accounting while offering multiple benefits for companies within the cannabis industry such as helping create a legal business structure, audit-ready financials, bank reconciliations, and seed-to-sale tracking. In terms of accessibility, the website provided multiple modes of communication such as social media, a phone number, a contact page, and an email.
One potential drawback is that KWB Accounting PC is cloud-based and does not clearly provide pricing information on the website. The company has a free consultation for curious individuals that are interested in learning more.
CPA California Cannabis
CPA California Cannabis is owned by GreenGrowth CPAs. It provides cannabis-specific assistance that ranges from tax preparation to audit, to IPO services, and financial operations. The company works with different individuals within the larger cannabis industry such as growers, distributors, and partners. CPA California Cannabis offers assistance for companies just starting within the industry and helps with risk compliance, business structuring, and securing capital. The company understands the importance of funding from an early stage and emphasizes creating a strong foundation while promoting compliance. The website even contains a useful blog with informative posts designed to provide additional content in an accessible and informative manner. People interested in the company are instructed to reach out using a method of communication such as calling the provided phone number or clicking the get started page on the website to find out more. No clearly stated standardized pricing.
420 CPA
The company 420 CPA, began in 2009 and has since expanded to offer accounting services designed to accommodate investors within the cannabis industry.
The website describes the various levels of assistance that are available to interested individuals. The levels extend to CFO which is recommended for companies making above $5,000,000 annually and it’s structured to look out at the future. In contrast, a Controller Service is designed for companies with less than $1,000,000 annually and includes activities such as bookkeeping and compliance oversight. The company even offers accounting services combined with a lower amount of advisory services for interested businesses.
Overall, 420 CPA provides various resources such as accounting services, advisory services, human resources, and tax preparation. No prices are easily visible, but like many specialized accounting firms, the website encourages people to reach out using one of the provided methods of contact. The company offers multiple modes of communication such as email, phone, social media, and a website contact page.
Anthony Sykes and Co. Accounting
Anthony Sykes and Co. Accounting is located in Santa Fe Springs, California, and assists people within the cannabis industry. It’s able to specifically provide expertise to people within the Los Angeles area. The company has full-service accounting, tax compliance services, cash flow assistance, QuickBooks services, and business plan development. Anthony Sykes and Co. Accounting has a free consultation and even offers a newsletter.
The company does not state prices given that offers tend to be specific to customer needs. People are able to reach the company to find out more information through one of the provided modes of communication such as social media, phone, or the website contact page.
How to Choose an Accounting Firm
Selecting the ideal accounting firm can improve the strength and efficiency of your business. Keep in mind what your main areas of concern are in terms of your financing. Ask questions relating to your concerns and speak with different firms to gain a better understanding of your compatibility.
Understand Your Goals: Before deciding on an accounting firm, make note of what you intended to get out of the partnership. Accounting firms offer a wide range of tools and services which have the ability to prove useful for individuals in need. However, paying for too many unnecessary services also can waste your funds. Find a strong balance between needs and wants when searching for an accounting firm that specializes in cannabis.
Research Relevant Expertise: Make note of accounting firms that specialize in various sections of the cannabis industry such as dispensaries and cannabis cultivation. Working with an accountant that’s familiar with the cannabis industry in combination with a strong functioning knowledge of tax laws and regulations allows a business to thrive while maintaining compliance. If possible, examine if the accounting firm has any awards or accolades to gain a deeper grasp on the areas where the company excels. While searching for awards, read previous customer reviews placed on third-party websites to have an increasingly varied perspective about the company. When reading customer reviews, make it a point to read both the positive and negative comments in combination with the most recent reviews. Reading a varied amount of reviews allows an individual to have a fuller perspective of what current and previous customers have experienced.
Ask Questions: One of the best ways to learn about an accounting firm is to ask questions. Write down a simple list of main questions or concerns that are important to you. If you want, research the company to ask specific questions about their offers and skills.
Compatibility: When speaking with the accounting firm, try to provide an accurate portrayal of your expectations to ensure that both parties have a clear understanding of the situation. If you are unsure about your compatibility with an accounting firm then contemplate alternative firms to ensure the best match. Having an accounting partner that understands your goals for the future as well as the current position of the company will allow your business to better obtain objectives.
Benefits of Working With an Accounting Firm
An accounting firm can provide a business with exceptional benefits such as the ability to avoid costly errors within the books while remaining properly aligned with the laws. A positive draw to partnering with an accounting firm is that such a partnership tends to ultimately save money.
Avoid Costly Errors: Splitting time between running a business and overseeing financial records leaves room for costly errors. If left unattended, accounting errors have the likelihood to add up and eventually create an inaccurate picture of the business. Keeping accurate records helps both business owners and workers within the business to understand where both cash inflows and cash outflows are coming from.
Improve Bookkeeping: Organized bookkeeping helps individuals unfamiliar with the specific numbers to follow along with yearly or even weekly breakdowns of the business financials. An accounting firm promotes order and creates an environment where financial information becomes increasingly approachable and streamlined. Such an organization ensures that the financial position of the business can be more easily understood by individuals at every level of the business.
Understand Spending: It’s important to know the inner workings of the finances to understand if the company has room for a wide range of needs such as purchasing additional business equipment to promote growth.
Free Up Your Time: Hiring an accounting firm also promotes productivity by assisting cannabis business owners in working on other projects. In general, it’s recommended to hire professionals when working with finances to avoid mistakes and keep growing the business. Having to go back into spreadsheets and additional documents to search for numeric errors takes time that could have been more effectively spent on a different task. Overall, hiring an accounting firm allows owners the freedom to focus on other areas of concern. As the old saying goes, time is money.
Remain Aligned with Financial Regulations: Accounting firms that specialize or have a working knowledge of the cannabis industry have typically spent time gaining familiarity with tax regulations and specific codes designed to regulate the cannabis industry. Such information has the potential to change from one city to another within the state so contemplate speaking with an accounting firm that resides within your area. Failure to comply with regulations leaves businesses and individuals vulnerable to potential penalties and fines. Working with an accounting firm can save both businesses and business owners from unpleasant repercussions.
Save Money: Hiring an accounting firm might seem like an unnecessary expense, but the partnership has the potential to pay off down the line. For example, professionals working at accounting firms often have knowledge of tax codes and tax deductions which allows them to more accurately and expertly prepare your tax returns.
Invest: When you are investing in your business, you can turn to your accountant and ask them how they would redirect those funds. At times, you will push money back into the business. However, your accountant might also recommend that your business invest, and you can use their support to make better choices and budget for those investments.
Frequently Asked Questions
Before working with an accountant, contemplate which areas of concern stand out the most to you. If you have any questions, think about speaking with multiple cannabis accounting professionals to receive several perspectives.
Is Cannabis legal in California?
Yes, cannabis is legal in California. California was one of the first states to allow medicinal marijuana use. It more recently allowed the use of recreational marijuana. It is not necessary to have a medical card to purchase cannabis because it is generally available for purchase for adults over the age of 21. Individuals are often expected to provide a legal and valid government-issued identification card to obtain cannabis or enter a dispensary. However, the rules and regulations pertaining to cannabis often vary depending on municipality.
Do cannabis accountants need a special license?
In general, individuals that are certified within the state of California as Certified Public Accountants (CPAs) are permitted to work with licensed cannabis businesses. The CPAs must remain in good standing and cannot commit crimes when assisting with the cannabis industry. Due to the relative newness of the industry, a fair amount of accounting firms still lack cannabis-specific resources. Luckily, the number of cannabis-specific and cannabis-aware accounting firms continues to grow as the cannabis industry expands. The process for becoming a Certified Public Accountant includes requirements such as a bachelor’s degree, 150-semester units in courses, and a passing score for the CPA Exam. It’s common for individuals to take up to one year to pass the exam.