Accounting Gain is Worth the Pain
It starts with a sense of anticipation. You read an article on the importance of record keeping, what software to use and how it will revolutionize your farm. You place your order and a few days later, the box containing the latest accounting software arrives.
You gather your records for some major data entry, insert the CD and then…layers? What are layers? Grid snap, bicubic interpolation, Trac Mate, Site Mate? Now it's a matter of time until you throw the CD in the trash or put it back in its box to collect dust on a shelf.
At least that's how we got started with our record keeping. Five years and 27,422 journal entries later, we have everything we need to make quick, objective decisions based upon accurate and easily accessible information. Implementing a detailed record-keeping system is a frustrating and time-consuming process if you attempt to do it as I did.
There are several issues that will make you want to quit. First is lack of technical know-how about setting up day-to-day data entry as well as syncing information from different software programs needed for the various facets of your business. You also need accounting knowledge so the data being put in is correct and in accordance with GAAP (Generally Accepted Accounting Principles).
Assuming you have some accounting background and are a whiz on the computer, you sit down at least once a week and catch up on data entry. This is the most difficult part. Data entry is never the "crisis of the moment,” and there will always be that wheel bearing on the semi that needs fixing or those last few beans that need replanting to get in the way.
There are ways to solve this issue. Even if your business isn't large enough to support a full-time person, you can hire someone with some accounting knowledge and send him or her to training sessions for whatever software you choose to use. Outsourcing or co-oping with another farmer is a good option. (Of course, if you share this employee with other farmers, be sure to have a confidentiality agreement so that your input prices, lease agreements, etc., don't get leaked.)
Bank statements and purchase invoices take care of the bulk of needed data. In addition to this, you will need to track which seed, fertilizer and chemicals were used on each field. On our farm in Bahia, we do this on paper or a simple Excel spreadsheet and then e-mail it to the data-entry person.
Finally, you can ease into some features: For several years, we allocated fuel usage evenly over all fields even though our Farm Works software allows us to allocate it on a field-by-field basis. Only recently did we get that detailed.
There is no end to the ways the data can be used. While I don't know how to input data into Farm Works, I am able to view it. I have the files e-mailed to me frequently and can view up-to-date information about every field, supplier, buyer and bank account from wherever I am in the world as long as I have my laptop and an Internet connection.
Illinois native John Carroll manages Carroll Farms Ltda. in Bahia, Brazil. The farm has grown from the 4,400 acres he and his family bought in 2002 to nearly 28,000 acres. To contact John, e-mail TopProducer@farmjournal.com
Top Producer, December 2008