April 20, 2020
Ready Your Cannabis Business for COVID-19 and Beyond
Posted by Chris Lee
The cannabis industry continues to grow despite COVID-19. With that growth comes the pressure to adapt, respond and comply. Learn about the steps your cannabis business can take to ensure it thrives now and is ready for the future.
The cannabis industry continues to grow despite COVID-19. With the constant demands on the industry to adapt, respond and comply, it’s important to make sure your cannabis business is ready for whatever comes next.
Being prepared to handle changes in regulations and market disruptions typically requires having the right finance, budgeting and reporting tools in place. Here are steps your business can take to ensure it thrives now and in the future.
Empower Your Finance Team: Graduate Your Entry-Level Accounting Solution
Finance departments often struggle to keep up with the growing needs of the cannabis industry. They are required to answer to regulators and investors, usually by pulling information together from an outgrown accounting system that is not integrated with other business applications. Often the finance teams are trying to accomplish this with entry-level accounting software that cannot deliver the functionality of a modern enterprise resource planning (ERP) solution.
An ERP system offers an integrated view of your core business functions from supply to demand. It allows cross-department data visibility and ensures a single source of truth for business operations: orders, production, supplier and vendor management, and financial management.
Gain Traceability: Integrate Your ERP or Accounting Software to Your Seed-to-Sale Solution
If you want to easily track your expenses, view the cost of goods sold (COGS) calculated by the ounce or gram, or reduce the reconciliation process — integrate your ERP solution with your seed-to-sale software. This will ensure your cannabis business is in line with state financial regulations from cultivation to the point of sale, by tracking and reporting in all stages of the cannabis process. A complete integration provides a single solution, solving traceability and compliance issues that surface as cannabis businesses navigate evolving regulations and significant industry growth.
Get Better Data for Planning: Integrate Your FP&A With Your ERP or Accounting Software
By integrating your financial planning and analysis (FP&A) software with your ERP or accounting software, you’ll enable users to get real-time financial information on demand, rather than having to wait for accounting to release the numbers after the close. Increased reporting speed and data accuracy allow your company’s decision-makers to create revenue forecasts, budgets and expense plans, secure in the knowledge that they are working off the most current and accurate information.
This visibility will allow your cannabis business to flag problems sooner, enabling you to quickly course-correct as opportunities or difficulties arise. When a disruption in the market like COVID-19 happens, you can easily re-forecast your budget.
Keep an Eye on the Numbers: Build Critical KPIs
An ERP solution should deliver real-time reporting, so decision-makers know where their cannabis business stands at any point in time. This allows them to forecast growth and cash and to make better strategic decisions, such as opening a new location, making an acquisition, or hiring more staff. It also makes it easier to obtain financing.
With COVID-19 impacting much of the world, holding tight might feel like the safest option. But by placing the right tools, processes and data visibility in place, you can help your business succeed now and be future ready.
Our Cannabis team can help you take the next steps in becoming future-ready. Email [email protected] with any questions or to learn more. For the latest regulatory updates and information on keeping your cannabis business thriving through disruption, visit the Armanino COVID-19 Resource Center.
Chris works as a Strategy and Transformation Consultant for Armanino helping clients drive innovation and change to meet the company’s goals and objectives. He works with a variety of Cannabis clients, helping them navigate issues surrounding accounting, cloud solutions and risk management practices as they grow. Additionally, he is part of the 2018 Spring Evening MBA cohort at Santa Clara. In his free time Chris loves to golf, watch sports, stay active, and hang-out with friends.