Your Accountant might inadvertently be costing you money! Yes, you read that right! Especially if you continue to use a generic accountant, rather than one trained and knowledgeable about the Industrial Hemp and CBD Industry. Your accountant might have the right credentials, training and years of accounting experience. But the important question you need to ask is, are they familiar with accounting for the Hemp industry?

Here, we outline 3 reasons why you need a specialized Hemp Industry accountant. It outlines the unique features of the Hemp industry and examines how hiring the right accountant can save you money, grow your business and help you increase your profits.

Reason 1: Farm Accounting is unique

Farming itself is unique. Unique in the fact that it relies on living crops (or animals) as produce. It is also wedded to the land. Which brings it under the purview of State regulations and/or subsidies. Then there's the unpredictability of the weather to contend with. All of which has a tremendous and far-reaching impact on how much profit or loss the farmer can make. These are just some of the factors that Farm Accounting has to take into consideration.

Here are a few others. Your land is an asset. And keeping it well maintained and high-yielding is a big responsibility. You might need to use fertilizers or nutrients regularly. Irrigation and drainage also need to be implemented, tracked and monitored. Managing the pH levels is just plain good sense for someone whose livelihood depends on the quality of the soil. And weed removal and pest control are critical to ensuring a healthy, unblemished crop. You need the right kind of equipment or resources to harvest the crop, get it to the market and transport it to your eventual buyer. Maybe, you'll incur some marketing expenses along the way.

The question is, how does one account for all these expenses in the books? How do they impact the total cost of crop production? How do we calculate the actual selling price of the crop to ensure that profits are made? What does it actually cost to get from ‘seed to sale’? How does that change your profits? Welcome to the world of a specialist accountant. In your case, someone with experience in the fast-changing dynamics of the Hemp Industry.

Read Related Article: 4 Key Performance Indicators Hemp Executives Use to Increase Profits

Reason 2: The Hemp Industry is evolving

Hemp – along with Cannabis – has heralded what has come to be known as the ‘Green Rush’ in America. This is a new, sunrise industry – and one that was only recently legalized. It was only with the passing of the Agricultural Act of 2018 (or the Farm Bill as it is better known) that Hemp moved from the list of controlled substances and became legal to grow.

As with any new industry, there are teething issues. The various stakeholders are unclear or unaware of the laws and regulations. The market-ecosystem is in its infancy. Little documentation and even less resources exist – offline or online. Most participants are winging it and hoping and praying for the best. However, things are changing, albeit slowly.

What this means for a business however, is that Generally Accepted Accounting Principles are slowly but steadily starting to evolve. And if businesses need to keep abreast of the latest news, information and regulations, they need an active and savvy accountant who is in the know. They need someone who actively understands and tracks the relevant news and proactively manages any impact it may have on their business and profits. This cannot come from a generic accountant who has way too many industries to keep up with. It requires a specialized Hemp Accountant. Someone who knows what matters and ensures that your business complies.

Read Related Article: The Growing Hemp Industry

Reason 3: The big, scary, audit

Audits are always tough for any business. But for a freshly-legal business like Hemp or CBD, it is all the more painful. For one thing, regulations are constantly changing and requirements keep increasing. To add to this, compliance with Federal, State and Local laws need to be ensured. Then of course, there’s always the perception that one is dealing with a stigmatized industry.

By far, the biggest issues audits throw up tend to be inconsistencies in record keeping. Hemp brands need to keep and maintain a variety of records. These include applications and permissions from relevant authorities, testing reports for samples produced, certificates and permissions for shipping and transportation etc. They also need stricter banking and accounting requirements when compared with other industries.

Having an accountant by your side when you navigate through an audit can prove invaluable. Not only can they help to ensure that your records and books are clean and up-to-spec, but can also help with growth of the business beyond passing audits.

Banks and financial institutions for instance are still rather averse to outright lending or even providing financial aid to Hemp Businesses. Having incomplete records or bad bookkeeping practices will only serve to compound the problem. Complete and proper accounting practices can help sway their decision in your favor.

This way, you can focus on the critical aspects of planting, growing, harvesting and building your business, while the accounting and audit issues are tackled by professionals who have expertise in just that sort of thing.

Read Related Article: Hemp Regulations in Colorado

About Us

Sonder Accounting is a leading Strategic Financial Services Firm catering to Hemp Product Makers and Brands. We offer a range of Accounting, Bookkeeping and Strategic Financial Advisory services to companies who seek to optimize their financials and enhance their profitability. Our focus is on streamlining your financials in order to help you:

• Control your expenses

• Boost your sales and

• Enhance your overall profitability

Staffed with a team of dedicated and committed professionals, we work in an organized, efficient and proactive manner. We can help you with:

• Actively recording and managing your financial data

• Advisory on Income Tax deductions and Tax Credit opportunities

• Planning your Team Growth Strategy and managing Payroll

All of which come together to help you realize and exceed your business objectives.

To understand how we can help you with all of the above, click here to book a FREE, no-obligation, strategy call with us.