WHY THE CANNABIS INDUSTRY IS LOOKING TO THE CLOUD
By Mihaela (Mickey) Dinis and Trisha LeBlanc
n May 2020 alone, Canada’s cannabis industry contributed $8.65 billion to the country’s economy1. Yet, despite these numbers, many industry players—from licenced producers and retail operators to distribution and consulting businesses—are still struggling to lock in sustainable profits. Part of the challenge is due to overly-manual processes that are leading to operational inefficiencies. That’s particularly true when it comes to financial management and accounting. This is why many leading cannabis businesses have begun to embrace cloud accounting. Cloud accounting is an online platform that lets you access your business and financial information from anywhere, anytime and from any device. As a result, multiple users can work remotely at the same time. Although many still view the technology as a simple bookkeeping aid, its benefits extend far beyond this. A robust cloud accounting platform can actually help you save time, enhance your regulatory compliance, uncover tax savings and easily provide your lenders and investors with the information they need. Here’s how: Improve Efficiency Unlike traditionally manual accounting processes, the cloud accounting service from Grant Thornton is a collection of cloud applications that integrate with each other to create a unique ecosystem that automates the flow of information and enhances its accessibility. By using a payroll application, for instance, you can make CRA remittances automatically,
accurately calculate your payroll and provide your employees with direct deposits. Streamlining your processes in this way lets you manage your administrative tasks in minutes. This means you can save time and actually focus on the strategic parts of your business that drive revenue. In an industry where business owners frequently wear multiple hats, this makes all the difference. Get a Real-Time Overview of Your Financials Because data is always synchronized in the cloud, your financial information is consolidated in one place—even if you’re running multiple cannabis retail stores or growing operations. This can help improve the accuracy of your numbers. At the same time, you get a real-time overview of your financials. At the push of a button, you can generate accurate and timely income, expense and cash flow reports. In addition to taking the stress out of lender meetings, this makes monthly and quarterly filings much easier. If you, your lenders or your investors need a more granular level analysis, you can even track income and expense transactions—giving you greater insight into your margins and profitability. Enhance Regulatory Compliance Cloud accounting systems can also help you enhance regulatory compliance by integrating directly into your POS system. This lets you monitor vital data, such as sales, inventory and excise duties, as well as federal and provincial taxes. It even automates the preparation of fi-
nancial reports—so you can submit accurate and timely regulatory filings. Save Money Many businesses also realize tax savings by transitioning to a cloud accounting platform. That’s because the system allows you to capture daily transactions as they happen, directly upload receipts by simply taking a picture of them and reconcile your accounting records on a monthly basis. With proper tracking, you’re better placed to claim all your business expenses, which can reduce your overall taxes owing. Strengthen Data Security While not every cloud system is created equal, robust platforms typically adhere to stringent security protocols. This means data is encrypted and protected with unique usernames and passwords, as well as two-factor authentication. It’s also backed up across multiple servers to minimize loss from natural disasters and strengthen your cybersecurity posture. Take the Pain Out of Tax Time Last, but not least, many cannabis businesses find tax time painful, especially when their books aren’t in order. Cloud accounting resolves those pain points so there are no surprises at tax time. By giving your accountant access to your cloud accounting platform, you can benefit from ongoing guidance and advice, rather than scrambling at year-end. Additionally, rather than fixing bookkeeping errors, your accountant can shift focus towards providing added value, by perhaps identifying tax planning strategies or helping you with business development. If you’re aiming to build a solid foundation for sustainable growth, cloud accounting may be the missing piece of the puzzle. Mihaela (Mickey) Dinis is a Senior Manager Cloud Accounting Services for Grant Thornton LLP and Trisha LeBlanc is a Partner and National Cannabis Leader for Grant Thornton LLP References: 1 BNN Bloomberg, July 31, 2020. “Cannabis Canada: Domestic pot industry contributes $8.65B to economy in May, StatsCan says.” https://www.bnnbloomberg.ca/cannabis-canada-domesticpot-industry-contributes-8-65b-to-economy-in-may-statscansays-1.1473950 ©2020 Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd. All rights reserved..
Cannabis Prospect Magazine | September 2020