A few decades ago, most Country Guide readers put the final lid on their shoebox record-keeping systems and made the move to computerized farm books.
Maybe it started with a progression from Mom’s hard-copy ledger to a series of Excel spreadsheets. Or was it a transition from spreadsheet hell to a desktop software that the accountant recommended?
Today, many farmers have moved to web-based platforms that do more than record debits and credits. There are a number of comprehensive packages on the market that run payroll, track inventory, automate tax filing and generate customized reports for in-depth financial analysis.
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But before you ask if you’re using the right software for your operation, farm advisor Denise Filipchuck suggests a different question. Do you have the right person doing your books in the first place?
In-house or outsource it?
In some farm businesses there is a member of the family or the management team who doesn’t mind office work and has the expertise to maintain accurate and up-to-date books.
But Filipchuck, a farm management consultant and certified financial planner based in Swan River, Man., finds it’s often a job that gets put off because nobody enjoys doing it.
“Sitting down at a desk and doing the bookkeeping gets left until the last minute on many farms because there are so many other jobs producers would rather do outside,” she says.
In these situations, Filipchuck recommends looking outside of the business for help.
When she talks about her own bookkeeping service, farmers are often surprised at how minimal the cost is. They quickly realize they could spend their time doing what they are good at — operating the farm — and hire someone who specializes in bookkeeping.
“Outsourcing the books takes a load off their shoulders right away and it ends up being faster and cheaper than doing it on the farm,” Filipchuck says.
In her business, Filipchuck Management Inc., bookkeeping clients adopt a monthly routine of using a scanner app to submit statements and invoices. Since the books are updated every month, it’s easy to access reports and see a current snapshot of the farm’s financial health at any given time.
The hourly fee for this service replaces the need to choose a software, learn it, dedicate time to data entry and troubleshoot when needed. Outsourcing this non-core function of the business to a professional bookkeeper ends up being a net benefit for most farmers.
Accountants and other farm advisors can usually recommend a list of bookkeepers who have a solid reputation and are familiar with agriculture.
Peak efficiency
For those who decide to keep the book work on the farm, it’s a question of how to make the process as efficient as possible. Much of the answer stems from choosing the software with the best fit.
Coralee Foster, BDO Canada partner in Mitchell, Ont., advises farmers to talk to their accountant before making any financial software decisions. Some have a preference for what their clients use. Some firms are also able to offer training and support on certain platforms.
When comparing the available options or revisiting your purchase decision, Filipchuck recommends beginning with the end in mind.
“Think about the value that you ultimately want to get out of the accounting software, including report generation and level of detail, and then look at the features of each available product,” she says.
Filipchuck has seen farm clients gain efficiency by moving from spreadsheets to accounting software, and from basic software to a more comprehensive package.
Country Guide recently asked farmers and farm advisors across the country about their experience with accounting platforms. While every farm’s management needs are unique, it’s clear that three software companies currently serve the majority of Canadian farmers — Farm Credit Canada (FCC), QuickBooks and Sage.
Desktop versus web-based
In the past, these companies primarily sold desktop products like AgExpert Analyst, QuickBooks Pro, QuickBooks Premier or Sage50 (previously known as Simply Accounting).
While these options are still being used by some businesses, the focus of the industry has largely shifted to web-based applications.
Why are software companies recommending the migration? In short, it improves the customer experience.
Web-based software, or cloud accounting, allows users to access their data at any time on any internet-connected device. In addition to the convenience of being able to update your records from anywhere, it also makes it easy to share your data with your management and advisory teams.
Other benefits include automated data backup, built-in security precautions and frequent updates.
Traditional desktop software is typically expensive because it involves a significant upfront cost, an additional fee for upgrades and in some cases, another annual charge for accessing customer support. Web-based products tend to have a less costly, inclusive monthly or yearly subscription fee that is often based on customized features and services.
So, if cloud accounting is the way of the future, how do the online products from the leading companies in Canadian agriculture stack up? These reviews encapsulate what we have learned.
The bottom line
Foster sees a variety of bookkeeping practices among her clients and is familiar with the evolution of FCC, QuickBooks and Sage products.
“These softwares are all fairly user-friendly and all of the family farms I work with could easily run on any of them,” she says. “They all have a basic format or can be expanded upon significantly if you want to use all of the modules.”
Since there are so many similarities, much of the software decision comes down to the preference of the farm bookkeeper and their farm advisors. It’s key to talk to your accountant first, Foster reminds.
Sage
Sage (sage.com), a global market leader in business technology, recommends small business owners use Sage Accounting.
Accounting Start allows one user to create and send unlimited invoices, integrate payments, automate bank reconciliations and calculate GST/HST returns. The most popular choice, Accounting Standard, gives an unlimited number of users the added ability to send quotes and estimates, run more advanced reports, forecast cash flow, and manage purchase invoices. Upgrading to Accounting Plus enables multiple currency banking and invoicing capabilities as well as inventory management.
All three Sage Accounting packages include a bilingual English-French interface.
Sage also offers a range of add-on products to meet human resources and other business management needs. Sage Payroll and Sage HR, for example, integrate into Sage Accounting.
Pricing: Sage Accounting Start, Standard and Plus packages cost $15, $35 and $55, respectively, per month. Sage Payroll starts at $20 plus $3 per employee per month.
Sage offers 30-day free trials on accounting and finance products. The company often runs sales and other promotions (such as getting any version of Sage Accounting free for three months).
Support and training: Sage users can access a library of online resources and the Sage City community forum anytime. The company also offers the option to connect with a company representative by phone or online chat during specified hours.
Sage University offers online training courses available in many different languages. Both self-paced modules and live webinars are available, depending on the product.
What farmers and farm advisors are saying: Sage Accounting seems to have fewer farm users than our other two reviewed products but is still common among businesses of all sizes. It is not industry-specific but is known to be fairly user-friendly and can be customized for agriculture. The tiered pricing model makes the software affordable for those who need fewer features but the many add-on product options may be valuable to larger operations. Sage is used by over 16,000 Canadian accountants and bookkeepers, making user support widely available.
AgExpert Accounting
FCC offers the only accounting software designed specifically for Canadian farmers. Their product, AgExpert (agexpert.ca), is used by 16,600 clients nationwide.
The standard features of AgExpert Accounting include transaction recording, bank reconciliation and reporting. The software allows users to generate reports such as a general ledger, balance sheet, income and expense statement, trial balance, net worth statement and accounts payable and receivable.
Users can upgrade to a premium version which includes features such as GST/HST Netfile, payroll, AgriStability worksheets, invoices and statements, inventory management, transaction templates and attachments, and additional report generation of a cash-flow statement and budget. This version can be used for up to five sets of books. For those who were previously using AgExpert Analyst, the premium version of AgExpert Accounting also includes a data migration service.
Pricing: The basic version of AgExpert Accounting with standard accounting features is available at no cost. The premium version is $399 annually.
FCC also offers AgExpert Field, a web-based platform for planning, tracking and analyzing the activities involved in growing a crop. The premium versions of both AgExpert Accounting and AgExpert Field are available in a bundle for $499 per year. This bundle fee is waived for one year for FCC clients who take out a Young Farmers Loan.
Support and training: All AgExpert Accounting users have access to an online support forum, blog articles and introductory webinars. Those who have upgraded to the premium version can also access unlimited technical support directly from FCC by phone or remote computer access.
In addition, there is a network of AgExpert certified advisors in each province who offer one-on-one consultations and training. One-day online training is $899 and two-day training is $1,399.
What farmers and farm advisors are saying: AgExpert Accounting is a popular choice, especially for larger operations. Since it is made specifically for farm businesses, the software includes industry-specific charts of accounts and other data entry prompts by commodity or government program.
Some farmers start off with a simpler software and move to AgExpert Accounting when their business has grown and they need the advanced capability of detailed inventory management.
It is known by farm advisors as a powerful program and is used by many agriculture-specific bookkeepers.
QuickBooks
Intuit’s QuickBooks (quickbooks.intuit.com) is one of the most popular entry-level accounting products on the market.
QuickBooks Online Self-Employed allows users to track income, expenses, sales and mileage. In additon, it can capture and organize receipts, run reports, invoice and accept payments and sort business and personal transactions.
The EasyStart version adds the capability to send estimates and progress invoices and organize income and expenses by tax category. By upgrading to the QuickBooks Online Essentials, users can also track time, manage bills and payments, and record transactions and make invoices in multiple currencies. The Plus version offers enhanced tracking of project profitability and inventory.
QuickBooks Payroll is available as an add-on product.
Pricing: QuickBooks Online Self-Employed costs $15 per month. The EasyStart, Essentials and Plus versions cost $22, $44 and $66 per month, respectively. QuickBooks Payroll is $20 plus $4 per employee per month.
QuickBooks offers 30-day free trials and often runs sales (such as save 50 per cent for the first three months) on web-based products.
Support and training: QuickBooks Online users can access articles, video tutorials, recorded webinars and a community discussion forum 24/7. They can also connect with a company representative by phone or online chat during specified hours.
There is a network of Quickbooks ProAdvisors who can provide additional customer support. The database of these accounting professionals can be searched by city and province.
What farmers and farm advisors are saying: QuickBooks is a popular option for farm operations of all sizes. It is not industry-specific but is known to be one of the most user-friendly products on the market and can easily be customized for agriculture. The tiered pricing model makes the software affordable for young or smaller businesses who need fewer bells and whistles. Since there are millions of QuickBooks users worldwide, there is a significant network of expert guidance available.
