RESOURCE

Cannabis Bookkeeping Red Flags

Seven bookkeeping red flags that may point to cash, margin, inventory, close, or tax-readiness issues in licensed cannabis operations.

1. Cash does not match the story

Sales may look strong while the bank balance keeps feeling tight. That mismatch needs a records-based review, not a guess.

2. POS, inventory, and books disagree

If system reports cannot be reconciled, margin and COGS conversations become harder than they need to be.

3. Reconciliations are stale

Old unreconciled activity can hide duplicates, miscoding, missing deposits, and vendor or tax-payment questions.

4. COGS is inconsistent

In cannabis, inventory and cost support deserve careful documentation and advisor coordination.

5. The close keeps changing

If numbers change after leaders have already made decisions, the close process needs stabilization.

6. Tax-readiness questions pile up

Questions for the CPA or tax attorney should be organized with cleaner records and better support.

7. No one knows what to fix first

That is the point of a diagnostic: prioritize the highest-impact cleanup path before starting a larger engagement.