Cannabis Inventory In Maryland: Essential Tips For Startups In Streamlining Operations.
When you’re looking to enhance your business operations, knowing how to manage your inventory with a dedicated software system can save you time, and an accounting headache.
Cannabis inventory software provides an easy way to track and manage your inventory for accuracy, compliance, and operational efficiency. Keeping your daily inventory updated can also provide benefits to your inventory accounting records by calculating accurate expenses for the cost of goods sold (COGS).
There are several elements to focus on in a cannabis business, especially if you’re just starting in Maryland.
To make running your business easy, you need software that can help make inventory easy for you to manage.
Let’s explore the ins and outs of cannabis inventory software to minimize your time and provide you insight into how it helps with your accounting down the road.
Cannabis Inventory Software Features
Cannabis inventory software has pivotal features your business needs to run on automation.
These features include the following:
- Product tracking: You can track and monitor products in real time. You can track any movement with batch lot tracking within the supply chain.
- Inventory Management: You can manage inventory through critical tools embedded within the software that notifies you of low stock and loyalty points. It’s also easy to add or remove stock.
- Compliance Reporting: The software follows compliant and regulatory procedures and offers reporting.
- Dedicated CRM: As a business owner, you can expect to have a dedicated CRM that goes well with business operations.
- Integration with Accounting Software: You can combine accounting software with the inventory management system to enhance financial processes and make it easy for your business to manage. Some systems make it easy for you to integrate accounting systems and others may already have them combined for a streamlined process.
These features within the inventory software management make the entire process easy to navigate without worrying about record keeping and tracking manually.
With a system to manage, track, and keep up to date with compliance regulations, you have more control over your business operations.
Advantages Of Cannabis Inventory Software
When using cannabis inventory software, you are open to a myriad of advantages that can support other functions of the business.
These advantages include the following:
- Saves time: Cannabis inventory software saves you time from manually updating inventory stock. There’s more focus on important business operations rather than on basic business operations.
- Efficient: The system provides a faster way to move inventory to sell more available products.
- No Manual Labor: It eliminates the need to conduct manual labor without having a human operator.
- Makes Accounting Easier: The system can calculate the cost of goods sold (COGS), taxation like excise tax and sales tax, report accurate financial statements of inventory, streamline auditing, and enable effortless budgeting to help accountants plan the business finances based on inventory data.
Most inventory management systems provide these advantages to cannabis businesses looking to enhance their company operations.
They conduct more daily activities within their business and work with accountants to manage their inventory costs.
Compliance And Regulations
During compliance and regulations, your business has to follow strict procedures to run smoothly. An inventory software system stays updated on compliance and regulations with state and local areas.
Here are some factors contributing to compliance and regulations in using an inventory management system:
- Avoid Unnecessary License Fines: When you have a hands-free inventory management process, it eliminates the worry of backlogging that can eventually lead to fines for your license.
- Stay compliant with inventory auditing: An inventory system in place automatically makes it easier for you to conduct auditing since the process is streamlined for you. The system ensures your inventory is updated in real-time for easy reporting to auditors reviewing your business operations.
- Data Security: Securing customer’s information and retaining it without being hacked is essential. It’s best to find a secure inventory software with a security system in place with encryption and multi-factor authentication to prevent hacking. If any private information is leaked, you risk getting taxed even further.
When using an inventory automation system, you’re better off using it to make business operations flow than not using it.
It’s necessary to find an inventory management system that adheres to all compliance and regulatory standards.
Manually managing inventory can prove time-consuming and cost you mistakes that can lead to fines down the road.
How Does Cannabis Inventory Software Influence Accounting?
Inventory software affects accounting by calculating the cost of goods sold (COGS), tracking real-time inventory valuation, recording accurate financial statements, and calculating taxes for compliance.
1. Calculates Cost Of Goods Sold (COGS)
Using an inventory system can help track expenses of cannabis products from cultivation, and processing, to distribution.
Online data security can also be a form of cost of goods sold (COGS) to keep your customer’s data from being taken. Having cybersecurity in your inventory management system may be calculated under COGS.
These are some of the expenses needed to calculate COGS. Having a clear calculation of it can impact tax liability.
This is critical to know when you’re doing accounting for your cannabis business, especially reporting around tax season.
2. Real-Time Inventory Valuation
The software gives you real-time data on what products are in stock and what products aren’t in stock and provides the value of them. You need to calculate the current value per product for your financial balance sheet. When you have a clear financial analysis of the inventory value, you understand your financial position.
3. Accurate Financial Statements
The software provides updated financial statements including balance sheets, income statements, and cash flow statements. These financial statements can be helpful for accountants to see the bigger picture without conducting extra work on their part.
4. Tax Compliance
There’s tax compliance adherence within an inventory software system that calculates income tax, excise tax, and sales tax.
It’s important to keep a record of these taxes for accounting purposes to provide a full financial analysis.
Without calculating these thoroughly, your cannabis business can accrue in tax errors and liabilities, leading to extra fees on taxes.
These are some of the ways an inventory system affects accounting and makes it easy for businesses to operate their company with ease.
If you have a new cannabis business and looking for ways to manage your inventory without manual labor, you can consider using systematic software.
Accounting is a long process that shouldn’t be done by yourself as a cannabis business owner. It’s essential to hire an accountant to keep updated on your financial records and taxes, especially if you want to stay compliant in your state.
What Are The Best Cannabis Inventory Software Systems?
You can use any cannabis-friendly system anywhere around the U.S. There are a handful of the best cannabis inventory software systems you can use in your business, but they are not all created equal.
Find a quality one that conducts all your inventory management processes and ensures it integrates compliance regulations.
If you live in Maryland, chances are you’re just getting your business running. Make it easy for you and consider using a system that manages inventory without you manually running the process yourself.