Nancy and Doug Rupp use software to gather and evaluate in-depth financial information, which enables them to make better decisions for their farm.
A ledger notebook, pencil and eraser were adequate tools 25 years ago when Nancy Rupp started managing her family’s farm financial records. Today, she and her husband, Doug, say they need more detailed information about their 2,000-acre farm near Stryker, Ohio, than their current software delivers.
"I need to work with software with sub-categories of categories so we can do a better job of comparing and contrasting things and making decisions," she says.
Sophistication Matters. The need for a higher-level software program is a common challenge for farmers, notes Barry Ward, Ohio State University leader of production business management. He says farmers typically start out using basic financial software for tracking expenses and receipts that can be easily computed at the year’s end for tax purposes.
"Many farmers then see a need for both financial and production records that enable them to make detailed assessments of individual enterprises," he says.
That was true for the Rupps, who started out using Quicken software and are in the process of transitioning to QuickBooks.
"Doug wants more and more details —what every farm yields, what a particular field cost to plant to corn, or what we spent on lime," Nancy explains. "He’d love some charts and graphs."
The Farm Financial Standards Council offers 21 financial ratios and guidelines to conduct a comprehensive evaluation of the financial health of an operation. Access the list at www.ffsc.org in the resources section.
Basic financial software programs, however, don’t address many of these standards, most of which involve accrual based accounting, Ward says. Farmers in the market for a more advanced financial software program need to know what they want to accomplish and how the software can deliver.
Ward does not make specific recommendations, but says he has successfully worked with EasyFarm, Red Wing CenterPoint, Farm Works, Farm Biz, PcMars and QuickBooks.
Well-known financial software programs, such as Finpack, are available from some universities.
Training and Tenacity. Gathering comprehensive data is a challenge. The job requires someone with the ability and willingness to devote their time and energy to the task, Ward says.
"It all sounds great when we talk about generating these numbers," he says, "but what goes along with that is that people get fatigued, because the learning curve for using some of these more complex tools is pretty steep."
- January 2011