When you buy farmland, it is often the case that you are buying tillable acres and only tillable acres. Sometimes the farmland comes with buildings or other assets. Many times our clients tell us, “I bought 50 acres for $450,000” and wonder why we ask so many questions about it.
Does your operation depend on one individual to handle the farm accounting?
Who in your operation is responsible for your farm accounting? It is one individual or several? Think about each of the various financial tasks and who handles them within your operation:
There are a few substantial differences between agricultural accounting and business accounting, specifically when it comes to reporting on the income statement and the balance sheet. For the income statement, most ag accounting is on a cash basis, making it simpler and more straightforward. Business accounting follows accrual methods, which allow entries of revenue and expense in the absence...
How can we talk about whether your farm will be able to secure financing? In order to address this question, keeping in mind that it’s June 2017 at the time of this article’s publication, we’re making the following assumptions:
Farm software should give you the information you need to make major financial decisions.
Examples of major financial decisions for your family farm would include things like a large expansion of the operation, taking on a new partner, producing a new product or commodity, or adopting new technology. Does your current farm software identify strengths or weaknesses in your operation, allowing...
Building a financially healthy ag business is possible. You just need to find what works for you.
If data isn't driving your behavior, then why are you doing it?
We all have big ambitions when taking over the family farm. We want to jump in and use our skills to build upon what the previous generations have handed down, leaving our own mark for future generations. What do you want to achieve?
Take control of the outcome, or be overrun by unstable markets.
Your farm’s financial story shows you its potential.
In Financial or Managerial Accounting, we explored the essential information farmers need to make good economic decisions. Today, we are going to look at how the interpretation of managerial accounting reports can be essential to your planning, direction, and choices about where...
How to Manage the Flow of Cash in Your Operation
We explored in Financial vs. Managerial Accounting the essential information farmers need to make good economic decisions. Today, we are going to look at how the interpretation of financial accounting reports can be essential to your farm’s financial health.
Of all the things raised on a farm, the most rewarding and the most challenging are always our children. At tax time, our kids bring us some extra joy. There are a variety of credits available to parents of children, and farm taxes can sometimes make the credits and deductions more or less valuable, depending on the situation.
Considering the purpose of your accounting records
Accounting provides essential information farmers need to make good economic decisions. There are two types of accounting reports that are essential to your operation’s “financial health” - management and financial.