Maximizing Efficiency: The Essentiality of Early ERP Implementation for Cannabis Businesses

You’re just about to launch or you have recently started your business for cultivating, processing, distributing, or selling cannabis products. With all the capital you’re investing in land, buildings, and equipment as well as staffing up your team, you might be tempted to cut costs when it comes to the operational software you choose for running your business.

Solutions like QuickBooks and Excel spreadsheets may seem like the way to go. While it’s true they can meet your needs as a start-up, once your business takes off, this approach hinders your growth.

You and your team must exert a lot of manual effort to keep up with all the sales you generate, and maintaining profitability will be difficult. Managers also can’t access data in real time to know how the business is doing so they can make decisions on how to adjust to customer demands and inventory availability.

Early ERP Implementation Sets the Stage for Operations to Scale

But by implementing an enterprise resource planning (ERP) solution early in your business lifecycle, you set the stage for your operations to scale easily as your business grows. The leading ERP solutions also allow you to deploy functionality in stages—so you don’t have to start out all at once trying to learn everything.

In the beginning, you can set up your financials, including your general ledger along with accounts payable and accounts receivable. If you select an ERP solution tailored for the cannabis industry, you can then add modules to manage cultivation, processing, testing, compliance, and sales as your business reaches those stages.

Along the way, you can automate your operational processes and reporting to eliminate manual processes. This facet is particularly helpful when it comes to complying with state regulations.

Another key reason to deploy an ERP solution early is to avoid the disruptions to your business that occur if you wait until things are busy. You and your staff will need to take away time from manufacturing products and servicing customers to learn the new system, and you will likely need to be trained on the operational best practices that leading ERP systems facilitate and streamline.

The Risks of Using Basic Accounting Solutions and Spreadsheets

There are also inherent risks in using QuickBooks and spreadsheets to run any business. These include isolated data silos that slow down decision-making. Whether it’s sales, production management, purchasing, or inventory, each spreadsheet used by each user contains isolated data. Without integration among all the spreadsheets, you limit access to real-time data. With data existing in multiple spreadsheets and sometimes in emails, it becomes a challenge for your managers to quickly make strategic business decisions.

Another risk is the lack of a single source of truth—users are not sure if the data they are viewing is accurate and up-to-date. With multiple spreadsheets across teams, data face-offs become a regular occurrence. As an example, managing multiple spreadsheets alongside QuickBooks makes it hard to truly gain real-time insights to compare product availability to incoming orders.

Your users will also lose valuable time consolidating, modifying, rekeying, and correcting data stored in different spreadsheets and QuickBooks. That’s time taken away from servicing customers and making sure production processes run smoothly.

Taking on the Challenges of a Highly-Regulated Industry

In the highly-regulated cannabis industry, operators face unique business challenges, such as compliance mandates covering financial reporting, delivery tracking, and product testing. As you launch your cannabis business, this makes it is crucial to think early on about your processes and systems. Are they dependable? Will they scale to enable you to meet your needs now and into the future?

To take on these challenges, many cannabis businesses have turned to SilverLeaf running on the Microsoft Dynamics 365 Business Central. As an ERP solution tailored specifically for the industry, the software enables cultivators, processors, distributors, and retailers to store all their data in one centralized database. This makes it easier to keep the information accurate and up to date. And with the solution running in the cloud, you can give data access to everyone in real time—anywhere they work—growing areas, production facilities, the back office, at home, and even while visiting with customers and vendors.

To learn more about the benefits of adopting an ERP solution early and how this enables cannabis managers to implement processes to mitigate the challenges that come with operating their business, watch our video, The Right Time for Technology and Your Cannabis Operation.

Don’t put yourself into a position where you need to “jump off a cliff” to a new ERP system as your business grows. Instead, you can simply “walk down the stairs” by deploying an ERP solution like SilverLeaf running on Business Central. Contact SilverLeaf today to find out how.