Industry
Accounting for Distributors
Distribution is a working capital business. Margins are thinner than retail, volumes are higher, and the difference between a good and a bad quarter is often collection speed.
Common Accounting Challenges
Receivables age quietly while inventory continues to be purchased. Without disciplined aging review and credit terms, the cash cycle stretches past what the balance sheet can support.
- Aged wholesale receivables without follow-up
- Freight and handling costs not assigned to product cost
- Manifest quantities not matched to receiving records
Inventory and Cost of Goods Sold
Landed cost including transport is assigned at receipt so margin by line reflects the true delivered cost rather than invoice price alone.
Cash Flow and Credit Management
Credit limits, documented terms, and weekly aging review keep the receivable book from becoming the company's largest uncollectible asset.
Transfer Reconciliation and Controls
Every inbound and outbound manifest is reconciled to physical receipt and shipment, with variances documented and investigated promptly.
Frequently Asked Questions
- How should freight be treated?
- Inbound freight is generally part of the cost of inventory; outbound delivery cost is typically a selling cost, which matters under the federal deduction rules.
- What receivable metrics matter most?
- Days sales outstanding, the percentage of the book past sixty days, and concentration by customer.
- How often should transfers be reconciled?
- At each receipt and shipment, with a periodic summary review to catch systemic differences.
Related Services
Cash Flow Planning
Cash forecasting, working capital analysis, and cash control design for licensed cannabis operators managing tax and inventory demands.
Read moreSeed-to-Sale Reconciliation
Reconciliation between the statewide monitoring system, inventory subledgers, and the general ledger for licensed Ohio cannabis operators.
Read moreFinancial Reporting
Monthly financial statements, KPI dashboards, and stakeholder reporting packages prepared for licensed cannabis operators.
Read moreRelated Industries
Delivery Services
Accounting support for licensed cannabis delivery operations covering route costing, cash handling, driver payroll, and order reconciliation.
Read moreProcessors
Cost accounting and compliance support for licensed processors handling extraction, refinement, and bulk product conversion.
Read moreCannabis Brands
Financial support for cannabis brands and licensing companies, covering co-packing arrangements, royalty accounting, and margin analysis.
Read moreRelated Resources
Cannabis Accounting Guide
A practical guide to accounting for licensed cannabis businesses: chart of accounts, inventory costing, reconciliation, and monthly close.
Read moreSeed-to-Sale Guide
How to reconcile the statewide monitoring system with accounting records, including variance causes, cadence, and documentation practices.
Read moreCFO Guide
A guide to financial leadership for cannabis operators, covering forecasting, KPI selection, capital planning, and board reporting.
Read moreDiscuss Your Operation With a Cannabis Accounting Specialist
Call to talk through your license types, current records, and reporting needs, or schedule a consultation at a time that works for your team.