The interview – questions never to ask!

While there may be many bits of information you would like to know about a candidate for a position you’re hiring, you need to be extremely cautious in asking certain types of questions.   Some questions, while not technically illegal, could open you up to a discrimination suit.  It’s better to avoid those kinds of questions completely, and find other ways to learn about the candidate. Stay away from any questions on the following subjects: Age Race, ethnicity, or color Gender or sex Country of national origin or birth place Religion Disability Marital or family status or pregnancy Is it helpful to know some of the above information?  Maybe, but better to approach it by asking questions that provide information about their potential job performance.  Here are some examples of questions you can ask, that will help you learn how they might perform. Are you at least 21 years old? Since this is a requirement to work in the industry (assuming they are handling cannabis products), it’s okay to ask. Is there is any reason you could not pass a background check? Okay to ask this if the background check is required for the position. Are you able to fulfill the physical responsibilities of the job? Are you able to occasionally work later hours than scheduled? This may tell you if they have children or other obligations outside work. Are there any days that you cannot work? This may tell you if they have religious affiliations but the real reason to ask it is just that, to find out what kind of schedule they can work. What’s important is to...

The interview – save yourself a future headache and learn all you can!

The employee interview presents the best opportunity for you to find out about a potential employee.  Resumes and/or a completed job application are essential; they give you the nuts and bolts of the person’s education and employment history.  But it’s the interview where you will get the most information about a prospective employee.  Let’s talk about some ways to learn as much as you can about the person before you. First let me say that the interview is not intended for you to tell the applicant all about yourself and your company.  Yes, you need to give basic information about the company and describe the job fully but that should only take up about 20% of the interview.  The rest of the conversation should focus on the person being interviewed.  It is the chance for you to find out what makes this person tick, how they will fit in with your organization, and perhaps most important, what their work ethic is.  The cannabis industry is a place that many people want to work.  It’s perceived to be fun (and it is!), to have “outside the box” fringe benefits (for example, employee discounts) and have a strong future (which of course, it does).  How can you get the most information about this person within a short interview?  By asking questions that will reveal the most about them.  Here are some of the questions I always ask and what they can reveal: How would you describe yourself?  This is another way to say “tell me about yourself” and the hope is you will find out how they perceive themselves, what their...

Staying straight with a cash business – Part 3 – Cash Reconciliation

So you’ve always wanted to be an auditor, right? Well, here’s your chance. We’ve discussed how the IRS is more prone to audit cannabis businesses than it does businesses in other industries.  We’ve discussed how the IRS wants to see documentation of receipts and disbursements that you are reporting on your income tax returns.  I’ve shown you my recommendations for tracking cash receipts and cash disbursements, but it’s not very meaningful if you don’t go through the process of reconciling the reporting with the actual cash in your safe.  That’s what I want to go through here.  These are my recommendations for auditing your cash, which equates to reconciling your bank statement (if you had a bank account). This stuff is pretty dry which is probably why you decided to go into the cannabis business and not become an auditor.  As boring as this may seem, it’s essential that you do this reconciliation often, I recommend at least once a week.  Pick a time that works for your schedule and stick to it.  It’s a very easy thing to avoid and very easy to get away from you.  The longer the time between reconciliations, the harder it will be to reconcile.  The form below will take you through the process but in simple terms the process looks like this: Starting cash (the cash counted in the safe at the last reconciliation) Plus cash receipts from sales and other sources Minus cash disbursements from paying vendors and other purchases Equals ending cash (what ending cash should be) cash reconciliation form Compare the above ending cash calculation to the actual cash...

Staying straight with a cash business – Part II – Cash Disbursements

In the previous blog, I discussed how you would document the receipt of cash due to sales.  Follow those recommendations and you will have the coverage you need if the IRS comes knocking at your door.  What that article did not discuss is how to document cash going out.  That’s what I want to discuss here. Cash can go out of your facility, your farm, your lab, your bakery, for all kinds of reasons.  You have regular monthly bills to pay such as rent, utilities, supplies, sales tax etc.  For many of these, you will get a receipt when you pay the bill such as when you buy supplies at a retail store.  Likewise, when you make an appointment to pay your sales tax in cash, or go by the electric company to pay that bill in cash, you will receive a receipt showing what you paid.  Your landlord may give you his banking information, and ask you to make a deposit to his account for the rent each month.  You should receive a receipt for that transaction as well, on which you can notate that it was for payment of rent for a given month.  These are fairly straight-forward; you will use these receipts to reconcile the cash in your safe. For those items where you are not automatically given a receipt, you need to create one.  Create a vendor invoice and be sure it has the following information on it (I’ve created this form for you to download below): Your company name, address, basic contact information The date The vendor’s name, address, contact information Who you are...

Staying straight with a cash business – Part I – Cash Receipts

This will be a three-part blog, intended to help you manage your business in the absence of a bank account.  Here’s what you know (or need to know): The IRS is targeting the marijuana industry, auditing these businesses as much as eight times as often as other businesses. The IRS is a stickler for documentation.  They want support for every transaction you report on your tax return. In most instances, the IRS looks to the company bank account to see transactions going in and out. You don’t have a bank account. This is the situation for most all cannabis businesses.  They know the IRS will be looking for documentation but they don’t have a bank account so the IRS can’t look at the bank statements to see business transactions.  So what do you do?  The answer is you take extra steps to assure that all of your transactions are documented, even when they occur in cash. Let’s start with cash receipts.  If you are a dispensary, this is relatively easy, because you have a point of sale system that will tell you how much cash you should have at the end of each day.  Many of the POS systems will also track the amount of cash in each till and how much should be in the cash safe (assuming proper setup).  Dispensaries should run their end of day reports, which will indicate how much excess cash should be in each till.  You should leave a standard starting balance in each till ($200 for example) and count the cash over that amount.  The total of your count should match the...