The record sales increase in cannabis over the past year ($7.6 billion more than the previous year, according to Leafly) has resulted in a deluge of small business startups, with many companies experiencing growth and expanding into busy multifaceted operations. For these companies, reviewing business processes is at the forefront of successful development, with savvy business owners realizing that what works for a startup may not continue working as a business begins to expand and grow.
Cannabis companies looking to take advantage of a booming market need advanced Enterprise Resource Planning (ERP) solutions, with capability and functionality more specific to the cannabis industry than QuickBooks currently offers.
While QuickBooks may be a solution for companies in many other industries, cannabis companies have particular needs that a general accounting software solution will not address. Below, we’ll look at some of the most significant reasons why QuickBooks is not a viable solution for cannabis businesses.
One of the most significant factors in choosing an ERP solution for a business is whether or not that solution has industry-specific capabilities to help manage your company. Cannabis companies need ERP software with advanced inventory features, such as lot tracking, barcode scanning, and unlimited data/user capabilities.
QuickBooks is primarily an accounting solution. While it does offer some inventory features, an industry-specific ERP solution has the ability to track specific cannabis strains for terpene optimization and monitor agricultural environments for cultivators and the necessary functionality to assist with maintaining regulatory compliance.
Rather than investing in multiple solutions for various operations, an industry-specific solution like cannabis ERP offers comprehensive integration across all areas of a company’s operations. Integrated software solutions that provide complete homogeneity across business operations save a company valuable time and resources by eliminating data transfer errors, increasing system security, and managing critical company data in one location.
Data management improvement makes it easier for a business to perform vital analytics, with more information to aid in strategic decision-making tasks. Integrated accounting, logistics, marketing, manufacturing, and inventory management systems also mean there is less risk of costly data breaches, limiting vulnerable access points of a system stretched across multiple programs. For growing cannabis businesses, QuickBooks just doesn’t offer the comprehensive functionality that entrepreneurs need to be successful.
Outside of accounting reports, QuickBooks doesn’t offer much support for maintaining and accessing critical cannabis business information. In particular, cannabis businesses need ERP solutions structured to help them maintain regulatory compliance on the municipal, state, and federal levels.
For businesses spanning multiple districts, this can become a complex endeavor, as regulations can vary from area to area. The first step in maintaining compliance with both operational regulations and tax regulations is keeping meticulous records. Cannabis companies must track products and quantities from seed to sale within specific reports that are submitted to officials on schedule.
Comprehensive cannabis ERP software solutions make submitting reports easy by making data easy to access and organizing information in a way that anticipates user need. Some solutions even offer integration with governmental reporting software like METRC, further facilitating compliance. Cannabis compliance violations can result in business closures, loss of licensing, and possible criminal penalties so maintaining perfect regulatory compliance should be at the forefront of every expanding cannabis operation.
The bottom line here is that while QuickBooks is useful for smaller startups, it isn’t a viable ERP solution for a growing business. Not only does it have severe limitations because it is primarily an accounting program, but it also isn’t specific enough for the critical needs of cannabis companies.
Investing in a comprehensive cannabis ERP solution gives expanding cannabis businesses the capabilities and features that they need to take advantage of a booming market. Think about your business needs, research available ERP software products, consult with industry experts, and help your company grow.