What is a Z-Report and How Does it Help Dispensaries?
By Green Bits
Restaurants, retail stores, and other businesses that implement point-of-sale systems need to rely on reports to keep track of records accurately. Cannabis dispensaries share this need to create, maintain, and verify sales records, in no small part due to the unique regulatory environment the cannabis industry provides.
Experienced cannabis dispensary owners know this and implement comprehensive reporting systems to make gathering and organizing sales data easy. With the appropriate reporting tools, these reports can automatically provide regulators with the data they need.
One of the most important tools that forward-thinking cannabis dispensary managers use for this purpose is the Z-report. Implementing the Z-report at your dispensary can turn complicated record keeping tasks into simple daily processes that anyone can complete.
What Is a Z-Report?
In retail point-of-sale terminology, there are two basic categories of reports: X-Reports and Z-Reports. The best way to understand either one is to compare and contrast the two:
X-Reports read the sales totals of a particular cash register at any point during the day. They offer a snapshot of that specific register’s transactions to date.
Z-Reports reset the cash register’s sales totals, setting the device back to zero. Retail managers use Z-reports at the end of each business day to calculate and categorize sales.
In a typical digital point-of-sale system, every register is capable of producing both X-reports and Z-reports. Management may wish to generate X-reports at specific intervals during the day and then close out each register with a Z-report after the last customer leaves the building.
Many point-of-sale solutions will also authorize credit card payments during the Z-report process. Sophisticated systems can automatically perform the reporting process, but in most cases, it’s up to the on-site manager to close out the system and file the report.
What Information Does a Z-Report Contain?
Z-Reports contain a wealth of data on the business’s financial and commercial activities. Processing a Z-report every day allows regulators and stakeholders to enjoy a clear view of the organization’s daily sales figures in an organized format.
Z-reports are customizable and can be programmed to automatically organize specific categories of information. For example, a typical Z-report contains the following data:
Sales and Taxes. All Z-reports contain a summary of net sales and a tax calculation since the last Z-report.
Sales Categories. Z-Reports can break down sales figures into specific categories, noting the number of product types sold and the total sales figures of each category.
Payment Details. It is vital for stakeholders to know exactly how much cash the business takes in per day and how many payments were made using credit or gift cards.
Budtender Tips. Budtender tip-outs can be categorized in their own section, and the resulting sum would be filed along with the rest of the report.
Total Discounts. If the business offered discount services to any of its customers, they should be reflected in a unique section and broken down by type.
Credit Card Breakdown. Because payment providers often don’t pay according to the same terms and rates, a credit card breakdown section helps identify which payment providers customers used and how much those providers need to pay on their cardholders’ behalf.
All discounts, service charges, and voided payments should be listed on the report. The report must be comprehensive in order to be effective.
The cannabis industry won’t be a cash-only sector forever. Planning for credit card reporting and integration now will save a great deal of headache down the line.
Why Should Cannabis Dispensaries Run Z-Reports?
So far, it’s clear that Z-reports are useful tools for restaurants and retail stores that want to account for the activity of every cash register on a daily basis. Stakeholders with access to daily snapshots of business activity can use this data to refine their retail approach and simplify accounting.
Cannabis dispensaries have the same retail and accounting needs as restaurants, bars, and other small retail businesses. Daily Z-reports help dispensaries incorporate sales data into their strategies and sales projections in an organized, easily integrated way.
However, there is an additional aspect of the cannabis industry where having quick, easy access to comprehensive sales data can represent a powerful competitive advantage: regulation.
State regulators enforce laws that require dispensaries to report on seed-to-sale tracking information. These laws are robust, and regulators tend to be unforgiving when it comes to discrepancies and inaccuracies. When a single compliance issue can lead to $10,000 or more in fines or license revocation, even the smallest steps in the process count.
How Z-Reports Help Dispensaries Remain Compliant
In an ideal world, meeting reporting needs strictly using the state-imposed seed-to-sale software would be a relatively painless proposition. But tracking the logistics information of every single cannabis seed in a national economy context is hard work. Errors are bound to pop up, and dispensaries that don’t have their own solutions to rely on can find themselves trapped in regulatory limbo.
Cannabis dispensaries that keep sales logs in hard copy formats to support their accounting processes independently of their regulatory software expose themselves to risk and unnecessary expense. In other words, tracking seed-to-sale data by hand is a time-consuming, error-prone process that can easily jeopardize the entire dispensary.
Dispensaries that integrate their point-of-sale systems with their state’s solution can ensure that their inventory and sales solutions are always synchronized with the state’s, providing regulators and stakeholders with peace of mind.
While Z-reports don’t allow dispensaries to produce real-time sales data, they create easy-to-understand snapshots of the businesses’ daily activity broken down into useful categories. This lets managers, stakeholders, and regulators look at the dispensary’s activity in terms of daily totals.
But the most important characteristic of Z-reports – and the main reason dispensaries should use them instead of just accruing X-reports – is that they reset the sales log. Resetting the sales log every day makes calculating weekly, monthly, and annual reports far easier to accomplish.
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