AMA with Cyndi Finklebinder from Alpha Omega Accounting

I have a very specific question.

I grow, bulk wholesale, no marketing or really any sales expense aside from my bulk packaging.

Is this packaging part of the cost of good sold?

It is required to be packaged with a tracking tag before transfer. I have assumed this is a COGS, but would like your input.

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I think the biggest thing overlooked to save on taxes is employees and security - often I see both of these just thrown into overhead instead of scrutinizing the hours to see where they are actually working.

Another area is the R&D credits. there are so many new processes and procedures coming out each week that have to be tested and proven to work - research and development is overlooked because it is assumed it can not be taken however there is also state tax credits associated with this and there are circumstances where even the federal credits would apply.

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Hi Cyndi,

Great to meet you! Does anyone happenknow of any good systems that can encompass SAP buisiness practices and production? We have had small discussions with two companies, one that is SAP B1 and one that is not. What is a fair price for this kind of functionality and what should a small company expect to pay for implementation?

Cheers!

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I think what differentiates me is that I started out in accounting doing multi-state taxes. That means that I’m familiar with most states tax issues which is where this industry is headed. I love the strategy part of the business.

I find that if you don’t have a strategy, a budget to support that strategy and the goal you are trying to reach it is like going on a road trip with no idea where you want to end up. This industry is still focused on getting it legal but have no plan for building and thriving in their own business.

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I’m not sure what you mean by if credit cards and such are under accounting. I’m a CPA and if it effects my clients bottom line then it is something I need to be looking at.

Credit card processing and banks are hitting this industry with outrageous fees. The suppliers normally are not effected at all.

Direct sales and on-line sales really depend on what you are selling - if it is HEMP based CBD they are very successful on-line. Cannabis on-line is much riskier but can be done.

I find that 90% of the service providers out there are taking their normal services and adding $$$ to the amount for those in the cannabis industry - it reminds me of when star wars came out and every toy on the market had a star wars sticker on it even if it was a car that never appeared in the shows. I have seen so many that use to do things like build greenhouses now increase their rates just for the cannabis industry.

That drives me crazy - for that reason I charge the same rates no matter what industry my client is in - and yes I work in other industries too mostly with investors

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@AlphaOmegaAccounting I have a client who is offering custom built seed-to-sale software for a vertically integrated cannabusiness. I’m surprisingly having problems finding a company to give away a $500K job for free. Feel free to extend our offer to one of your clients. I’m sure it will make them very happy! All the details here:

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@AlphaOmegaAccounting proper banking and credit card processing options are rough under this current administration. Have you found any quality banking institutions and/or processing solutions that have worked for you or your clients?

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Daniel
Ive known and worked with a company from San Jose, CA for 15 years that is positioned
to help you with your request.
contact me
Doug - Greenmark Consulting

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Hi Kareen,

I love hosting this - it is actually quite fun.

Yes i use IRC 263A to allocate costs but there are other ways to allocate costs too.

Actually I have only had 2 clients ever come under audit and both were thrown out when we supplied the documentation to back up our position. Neither of those were in the cannabis industry - I have always found that the more documentation you have to back something up the better off you are

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Good Morning Farmer_Dan,

Yes packing is a part of Cost of Goods sold - so is designing the logo for that packaging - just make sure you have the art work and documentation of what it was used for - so if you use the same logo on your business cards then you have to document that it was originally intended for the packaging.

By the way the business cards would not be cost of goods even if you attach them to the product temporarily for transport.

as far ad the tracking tag - I don’t know - each state has a different requirement for when those tags transfer.

Cyndi

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Hi HendrxGenetics

I have never used SAP because the implementation is usually to expensive for a small business and the cost does not qualify for 280E -

That said I do use dash-boarding software with most of my small businesses to help them with exactly the same thing - I normally use either Spotlight Reporting or Fathom Reporting depending on what kind of non-financial tracking they are looking for.

Cyndi Finkenbinder, CPA
970-344-7298

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@AlphaOmegaAccounting do you go to any cannabis trade shows to acquire new customers? If you do, what is your favorite show?

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One of the reasons you might be having a problem is because you really need accountants to push any point of sale software you want to offer. To do that it has to integrate with their software - in my case Xero and with any software required by the state. It also helps to have a partner program for accountants.

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Banks are still really hard - I use Plooto for credit card processing for my business and several of my clients.

Even with banking in place this is still very cash intensive and always will be.

I am looking at crypto currency for several of my clients right now - as soon as I’m comfortable with how it will work I will be doing a webinar on it.

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I don’t normally go to trade shows because they are normally at the same time as accounting conferences I need to attend for CPE but I am going to Sensi in Denver this week.

I also attend quite a few meetup groups that are centered around cannabis businesses.

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Well it looks like all the questions are done - If i missed your question please let me know and I’ll answer it. If you have questions in the future just ask here or you can go to my website www.alphaomega-acct.biz, click on schedule and see when we might talk.

Thanks for such great questions.
Cyndi Finkenbinder, CPA
www.alphaomega-acct.biz
970-344-7298

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Yes, your AMA is highly informational! I am happy you are having fun!!:congapartyparrot:

OK, that’s great to here because that means that you are not making your clients overpay on their taxes.

Wow, OK. Yes, the more documentation the better! Sounds like you have excellent defense tactics. That definitely falls under the CYOA (cover your own a**) rules and in this case you are good at covering your clients as well. I like it!:slightly_smiling_face:

Very happy to have you as one of our valued members @AlphaOmegaAccounting !!

~Kareenabis~

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Hi @AlphaOmegaAccounting saw that you have over 2 decades of experience, that’s super impressive! How long have you been working with clients in the cannabis industry?

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Yes, I’ve been in business 20 years and have clients in 28 states.

I have been working in the cannabis industry for 5 years now.

Cyndi

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Hi @AlphaOmegaAccounting,
Thanks for taking questions this has been very informative. I have 2 questions:

I was curious if any new issues with the tax code have begun to develop with Cannabis Cultivators in Canada since legalization?

As legalization is growing state by state in the U.S. will the issues of 280E become greater or worse until Federal legalization?

Thanks once again!

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