Tips for Successful Use of Integrated Software for Seed to Sale and Point of Sale Tracking – for Michigan METRC users
Michigan’s licensed medical marihuana businesses will be required to report all inventory movement to the state’s central reporting system, METRC. Most business owners choose to work with a third party in conjunction with METRC for integrated software for seed to sale tracking. When expectations are not met, the implementation process can be delayed or cause unintended disruptions in business. However, successful integrated software implementation and ongoing use can be achieved!
For most businesses, choosing to work with a third party integrated software in conjunction with METRC is an easy decision. Seed to sale and point of sale software offer ease of use and additional detailed tracking and reporting. Integrated software also avoids the need to manually enter data into METRC, which can be time consuming.
How do you know what to looking for in an integrated software? And how can you ensure the implementation process goes smoothly?
Here are a few tips for successful implementation of integrated software for seed to sale and point of sale use:
1.) The integrated software should have reporting capabilities that are useful to the business, not just to the state. In addition to required METRC reporting, software should at a minimum contain the following reporting:
- Inventory on hand at month end, both a detail list and category totals.
- Cost value of inventory on hand, following either FIFO or Average Cost inventory methods. Cost value is not the same as retail or wholesale value.
- For Cultivator or Processor inventory, reporting capabilities should include “Work in Progress” and costs to date, by month. For unfinished goods, costs to date are especially helpful for tracking cost of goods vs. cost of goods sold. Detailed reports like this are useful for tax calculation purposes and compliance with IRC 280E.
- For Provisioning Centers, reporting should also include separate reports for general retail items that are not marihuana products.
Most third party integrated software available should have these basic reports.
2.) Trial or demo the software and have your employees do so as well – before committing to a long term contract. Is the software user friendly? Is training time needed efficient?
3.) Make sure you have the technology infrastructure in place to support the software. Infrastructure includes up to date network cabling, adequate internet speed, necessary hardware, and any ancillary software required. Not having these items in place may create delays in implementation, or worse, can even hurt sales. Customers who have to suffer through slow checkout due to system crashes or time delays may not be as eager to return. Internet outages can also cause sales to stop completely.
Other tips for third party integrated software implementation and use:
4.) Regularly test your integrated software to make sure it is reporting correctly. Monitor software use and reports for unintended errors, breach of data, or incorrect information reporting. For example, does every receipt every time have the correct patient name and ID number? Do inventory items appear entered correctly? Make sure user logins are up to date as well, with use restrictions in place as appropriate. The errors you find may surprise you, once you start paying attention! A CPA or IT professional can also help you design or perform “internal audit” functions to regularly evaluate your system.
5.) Have a back-up plan in place! What happens if the seed to sale or point of sale system goes down? Adequately train employees so they know how to manually enter information in Michigan’s METRC.
6.) Make sure the integrated software provider has GREAT support. This is a big one! Support should be timely and reliably available in the event the system goes down.
7.) Look to the future and a software that can grow to handle it all – full ERP capabilities. Regularly offer unsolicited feedback to your provider on ways the software can make your life as a business owner easier. The cannabis space is relatively new and immature. Most integrated softwares for the Michigan METRC system are still developing as the industry develops. However, very few options are available (outside of complete customization) for one centralized system that will handle all business needs. Think inventory, reporting, regulatory compliance, customer management, accounting, record keeping, and all other “necessary” functions all in one. By regularly providing feedback, developers can seek to improve their software and offer greater resources and capabilities to their customer – you!
8.) Work with a professional! A professional can help evaluate integrated software. They can also work with you on an ongoing basis to ensure success is maintained. Discussing reporting capabilities with your CPA can help ensure components are there to maintain complete and accurate accounting records. An IT expert can help you plan for necessary infrastructure and hardware to incorporate in your overall Technology Plan. A knowledgeable professional can also work as an intermediary between the software company and the business owner to ensure expectations are met.
We can help!
To learn more about how we can help your business with financial reporting, inventory management, internal controls, and other accounting related needs, please contact us here. Additionally, check out our blog or follow us on Facebook for daily accounting tips, financial information, and cannabis industry news.
August 20, 2018
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