BDO, the accounting firm most likely to pie its top performers, announced its fiscal year 2017 revenue haul yesterday. They U.S. firm brought in $1.41 billion, an increase from $1.29 billion last year. The firm states that its revenue has more than doubled from $683 million in 2013 to this year’s mark.
Accounting Today noted seven acquisitions from the past year that helped with that growth. A spokesman for the firm told me that 38 percent of the revenue growth was organic and 62 percent was from acquisitions. So all in all, pretty good, but like all accounting firms, these numbers are all self-reported, so you can’t help but take them all with a grain of salt.
Internal controls or lack thereof
The marijuana industry has a big problem: cash. As in, there’s a bunch of it lying around at all times because the vast majority of banks won’t take deposits from marijuana businesses. This makes things like misappropriation, whether by sticky-fingered employees or gun-wielding thieves, a significant risk at all times:
For [Jerred] Kiloh, the cash is a daily hassle. It needs to be counted repeatedly to safeguard against loss. State and local taxes must be set aside and stored, sometimes for a month or more. When vendors show up, they get paid in cash, too.”When now everyone makes payments through their cellphone, it’s tough to see that I’m left to the archaic version of counting money,” he said.
Internal controls at this dispensary include cameras and armed security. But when the owner has to pay his tax bill, his paranoia is the primary protection:
“I find myself looking in my rear-view mirror hundreds of more times than I usually would in just normal traffic, making sure that I’m not being followed,” Kiloh said.
“That’s what a lot of this industry has been about: Just stay under the radar, and that’s your best defense. That’s your best kind of safety.”
Any accountant looking to get into internal control design consulting for the marijuana industry could probably do pretty well for themselves.
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