You’re busy running a farm and managing it as efficiently as possible. But, like many farmers, you might find yourself with an additional side project: bookkeeping.
Can you really afford to spend hours at the end of each week working on your finances? Isn’t that time better spent growing crops or raising animals? The answer is yes—if you use the right tools to simplify your accounting process.
A Guide to Farm Accounting
Farm accounting is the process of tracking and reporting financial information on a farm. This can be done manually, but it’s much easier to use software designed for this purpose. Once you have your data in a database, you can use it for planning, management, and analysis purposes.
The following are some examples of how farm accounting helps with planning:
- It allows you to set goals for your business (e.g., “I want my annual income from crops and livestock sales to increase by $1000 next year.”)
- It gives you historical data so that when something goes wrong (e.g., drought), or unexpectedly well (e.g., crop prices rise), then at least one thing won’t change–you still know what happened last year!
How Does a System Work?
Accounting software is designed to help you manage your business. It tracks income and expenses, allows you to pay employees, vendors, and other suppliers on time (or even early), keeps track of inventory and allows you to generate reports that can help improve efficiency.
When it comes to choosing an accounting system for your farm or ranch, there are a number of factors that should be considered:
- The size of the operation (small or large)
- What kind of financial reporting needs exist within the organization? Are they simple or complex?
- Is there one person who will manage all aspects of financial reporting or will multiple people need access?
Choosing the Right Software for Your Farm
- Choosing the right software for your farm is an important step in becoming more efficient.
- An integrated accounting system can help you manage all aspects of your business, from fieldwork to finances. It will allow you to connect with other programs so that all data is available in one place and can be shared with others on the farm or in management teams.
- Cloud-based software offers many advantages over traditional desktop applications: it’s more accessible because it doesn’t require installation or maintenance on your computer; it’s easier to share because there are no installation issues; updates happen automatically; backups are automatic; security is better protected against viruses and hackers because everything is stored remotely–and most importantly, cloud storage costs less than buying software licenses!
- Mobile devices such as tablets or smartphones also offer an attractive option for keeping track of financial details while out in the field–you don’t need to spend time sitting at home behind a desk when there are crops waiting for tending!
The Benefits of an Integrated Accounting System
The benefits of using an integrated accounting system include:
- Reduced time to complete accounting tasks. Because you can use the same software for everything from financial statements to invoices, you’ll save time by not having to switch between applications. This also means that it takes less time for your employees or contractors to learn how to use the system and get their work done.
- Improved cash flow management. An integrated system allows you to see all your financial data in one place, so you can better manage your cash flow by keeping close track of what payments are coming due and when they will be paid out (or received). You’ll know exactly how much money is coming into the business each month–and what bills need paying before those funds arrive on hand!
Conclusion
We hope you’ve found this guide to farm accounting helpful. The right software can make all the difference when it comes to keeping track of your finances, and we want to make sure that you find the best option for your needs!
