financial statement compilation
for the cannabis industry
The dirt
Cannabis businesses are in a unique situation from an accounting perspective. On the one hand they are very complex organizations. They perform many business transactions each with their own challenges. On the other hand, the cannabis industry has received no guidance from accounting authorities on how to properly record these transactions. In addition, many seasoned accounting professionals are choosing to stay away from the industry for the time being. The mixture of lack of experience and lack of guidance has lead to lack of good accounting. Many small businesses (as well as large) operating in the cannabis space simply don't have the time or expertise to change this. Having a certified public accountant compile your financial statements will improve financial reporting significantly. Unlike an audit review in which a third party is hired to express an opinion, a review compilation is a collaborative effort between CPA and client. More accurate financial statements can lead to more accurate tax returns, potentially lower income tax and more effective tax planning saving the company a lot of money.
+ Compilation
Many cannabis companies, particularly small businesses, don't bother to compile financial statements at all. This leads to a mad rush at tax time, trying to piece together the big picture of their company in time for the deadline. We offer compilation services at any time - you bring the financial data and we will do the rest. Of course, this is a joint effort - the firm will rely on you, the client, to explain the nature and impact of transactions while we put together the financial story. The end result is professionally crafted financial statements for your company, signed off by a CPA.
+ Review
A review typically occurs when a client has an already prepared set of financial statements and would like the firm to confirm that the statements were put together correctly. Different from an audit review, the CPA does not provide an opinion on the accuracy of the financial statements as this is a far more informal service. It is not uncommon for clients to ask for review on particular line items with a large volume of transactions and walk us through how they categorized them. Regular reviews can help greatly in building out scale-able accounting practices.
+ Summary of Accounting Policies and Controls
Documentation is extremely important when it comes to financial statements. Every compilation engagement we take on comes with a Summary of Accounting Policies and Controls. As the name suggests, this is basically a roadmap of how we got from a whole bunch of financial information to vetted financial statements. We feel this document is particularly important in the cannabis industry as regulations are changing constantly. Our approach for compiling financials might change from year to year or even quarter to quarter depending on what happens in the industry. Thus it's important to keep good records of the processes, procedures and controls applied in any one year.
+ Why Choose Green Books
Greenbooks is a CPA firm dedicated exclusively to cannabis clients. Cannabis businesses have their own unique problems when it comes to preparing financial statements. Examples include poor record keeping, complex cost accounting and potentially lack of access to secure cash storage. When working with a firm to compile your financials, it is important that the firm understands these problems and can offer solutions. It would be difficult to find a firm better suited than Greenbooks to do so.
Specific financial statement compilation services we offer:
Take a look:
Financial statement compilations are usually requested for a handful of reasons. The two most common are some type of reporting requirement for financing, or a client has had poor accounting records historically and needs to hit the reset button. The below viz shows the output of a basic compilation engagement. Although simple, many complicated accounting rules must be applied to get an accurate result.
