How a Growing Cannabis Organization Streamlined Financial Reporting with Intacct
Case Brief
A rapidly growing company in the cannabis industry needed to scale its financial management capabilities beyond QuickBooks’s limitations. Partnering with Withum, this organization transitioned from QuickBooks to Sage Intacct, a cloud-based ERP system known for its robust multi-entity and intercompany functionalities and dimension-based accounting capabilities.
The Withum team completed the implementation project on time in the client’s short 10-week timeframe, ahead of new store and dispensary openings. We also completed the project 10% under budget while delivering enhanced reporting, better financial controls, and reducing the amount of manual work significantly which allowed our client to reduce its month-end process by an impressive 50%! This implementation not only streamlined their financial processes but also laid the foundation for future growth and performance optimization. Since adopting Sage Intacct, this organization has successfully tripled its stores and the system continues to perform seamlessly.
The Client
A dynamic cannabis business experiencing rapid growth faced challenges with its month-end close process. They sought enhanced financial reporting to empower the leadership team to make strategic, data-driven decisions.
This Sage Intacct implementation project allowed us to reduce our month-end closing time by nearly 50%. The integrations with Expensify and the Dutchie POS, along with the allocations and intercompany functionalities of Sage Intacct, have drastically reduced our manual workload and significantly decreased the risk of error, contributing to a faster month-end close. We now enjoy enhanced reporting capabilities, thanks to the multi-dimensional features in Sage Intacct. This improvement enables our analysts to produce more insightful, detailed, and accurate reports and budgets. This enhanced access to financial data also empowers our leadership team to make informed, strategic decisions, ultimately driving the organization forward. We are very pleased with Sage Intacct and its transformative impact on our operations.
- Amanda Lyublinsky, Director of Accounting, Gotham
The Challenge
The client’s reliance on QuickBooks hindered their ability to manage financial processes across multiple entities, increasing the risk of errors, slowing down financial closes and impeding the ability to generate meaningful data and reports.
Key challenges included:
- A lengthy month-end close process caused by numerous manual tasks, increasing the risk of errors.
- Complex intercompany transactions that required time-consuming manual adjustments, affecting the accuracy of financial reporting.
- Manual allocation of shared expenses across different entities due to limited allocation functionalities within QuickBooks.
- The absence of an expense management tool.
Limited dimensional capabilities in QuickBooks, making it challenging to generate detailed, insightful reports on performance by project, client, location, etc.
The Approach and Solution
The Withum team structured the project into two key phases to meet the client’s objectives. Phase 1 focused on implementing Sage Intacct to improve core financial processes, and Phase 2 integrated their point-of-sale system with Intacct for seamless operations.
Phase 1: Sage Intacct Implementation
The primary objectives of Phase 1 were to:
- Rapidly analyze and design the critical financial business processes that could be leveraged in the future by using Intacct's cloud-based ERP to achieve the following outcomes once implemented.
- Standardize the Company's multiple entities on a single, modern platform.
- Enhance core financial management.
- Optimize financial effectiveness and performance.
- Enable better reporting and analysis to manage the business, provide better inventory tracking and billing and offer accurate financial reports for your industry.
Phase 2: Dutchie One Direction Integration
Phase 2’s primary objective was integrating Sage Intacct with the Dutchie point of sale (POS) system. This POS, designed specifically for the cannabis industry, incorporates tools to ensure compliance with local and state regulations, simplifies tracking stock levels in real-time and includes detailed reporting tools that offer insights into sales trends and customers preferences.
The Results, ROI
- Quicker Month-End Close: Sage Intacct's advanced features allowed for the automation of manual tasks, enabling the client to cut down the time spent on their month-end close process by an impressive 50%. The time savings were allocated to more analysis and forward-looking business activities to grow.
- Improved Intercompany Transactions and Reporting: Sage Intacct enables the automatic creation of corresponding entries in each entity involved in the intercompany transaction. For example, when entity A sells to entity B, Intacct automatically creates the receivable in A and the payable in entity B. This eliminates the need for manual entries, saving this client’s Director of Accounting and her team numerous days of work every month while significantly reducing the risk of errors. The intercompany functionalities also automated and simplified the profit-sharing process.
- Multi-Dimensional Reporting: Sage Intacct allows organizations to tag transactions with multiple dimensions (such as location, project, client, department, etc.) without complicating the Chart of Accounts. With those multiple dimensions, this Director of Accounting can now generate detailed and meaningful reports, which are invaluable for understanding profitability at a granular level. This empowers the leadership team to make strategic, data-driven decisions. Her analysts are now also able to produce much more precise budgets and forecasts, with multi-dimensional data available at their fingertips.
- Integration with Expensify: Our client transformed their expense management process by implementing Expensify, a powerful platform designed to simplify expense reporting. This integration allowed for seamless tracking and approval of expenses, improving visibility into costs, reducing the risk of error and speeding up the month-end close. Since credit card expenses are automatically pushed over to Sage Intacct upon coding and approval, the Director of Finance estimates the amount of time the accounting team spends on recording and reviewing transactions was cut by 50%.
- Simplified Transaction Recording Using Allocations: Sage Intacct enables organizations to distribute transactions across different entities, departments, or other dimensions using allocations. This functionality saves our clients a significant amount of manual work every month, allowing them to shift focus from manual data entry to strategic tasks while drastically reducing the risk or errors. Our client estimates this has cut in half the time spent recording those transactions, month after month.
- Integration with POS System: Dutchie provides a POS platform designed for cannabis dispensaries. This system further streamlined our client’s operations, reducing the need for manual data entry and enhancing financial accuracy while remaining compliant with local regulations.
- Scalability for Future Growth: Sage Intacct, a cloud-based solution, offered the scalability the client needed to support future expansion. Since implementing the system, the client has successfully tripled the number of stores, and the system continues to perform seamlessly.
Conclusion
By transitioning from QuickBooks to Sage Intacct, the client overcame inefficiencies in their financial processes, achieved better reporting and positioned themselves for future growth. The implementation project was finished on time in a 10-week timeframe, was under budget by 10%, resulted in a 50% reduction in month-end processing time, and significantly improved the organization’s reporting capabilities. Sage Intacct’s cloud-based platform provided the flexibility, security, and automation needed to manage this growing cannabis organization effectively. What a great success story!
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