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.

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.

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Cannabis processing and packaging area with labeled inventory containers

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.

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Cash forecasting, working capital analysis, and cash control design for licensed cannabis operators managing tax and inventory demands.

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Reconciliation between the statewide seed-to-sale tracking system, inventory subledgers, and the general ledger for licensed New York cannabis operators.

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Monthly financial statements, KPI dashboards, and stakeholder reporting packages prepared for licensed cannabis operators. Our advisory work includes customized fractional CFO or controller support, setting up compliant banking paths, merchant processing documentation, and predictive cash flow financial modeling to protect operator margins.

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