Generally accepted accounting principles (GAAP) are a common set of accounting principles, standards, and procedures that companies should follow when they compile their financial statements. GAAP is a combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information. One of the benefits of using a GAAP compliant system is the ability to provide consistent financial statements. It won’t matter who is doing the transactions, the system will always use the same accounts, every time.
Moving from Quickbooks to a GAAP system such as SAP Business One can be a huge change. Quickbooks is easy to manipulate and change at will which is great in some cases but doesn’t leave much of an audit trail to see what happened and why. Every transaction in SAP Business One is accounted for including the “undos”. This gives you a clear audit trail of why things happened, when they happened and most important who happened. More control over your financials will lead to better decision making, additional control on costs, and accurate reporting.
Let’s talk a little about 280E and GAAP. According to C. Dean Homayouni, Esq. CPA (420cannabisattorneycpa.com), in addition to deducting indirect production costs related to producing cannabis, “if the cannabis production business prepares financial statements that are in accordance with GAAP, some additional expenses can be deducted.” These include the depletion of land, labor, depreciation of equipment, and transportation of cannabis. This can be a pretty big benefit to switching to a GAAP compliant system. SAP Business One with Viridian Sciences can track all your assets, run a depreciation schedule, add labor and machine time to a production order, and track that seed or clone all the way to your finished good adding costs along the way.
Source: https://www.viridiansciences.com/blog/what-is-this-gaap-you-speak-of-and-why-should-i-care
