As far as topics go, farm bookkeeping and office administration don’t get a lot of attention. Why would they when there’s drought and drones, multi-million-dollar farm acquisitions, trade wars, tariffs and labour disruptions to focus on instead?
But it’s a subject that’s creating a bottleneck, preventing some farm operations from reaching their growth potential and transition goals.
In short, decisions are being made with incomplete or slow information.
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With another year-end comes the opportunity to evaluate your farm record-keeping system. If you don’t have a system, or you’re not sure what your system is, keep reading.
The case for digital
“Shoebox” farm accounting still exists in dark corners of some accounting offices. However, this record-keeping system is increasingly unmanageable given the dollars and financing at play on today’s farms.
Many shoebox record-keepers are exiting the industry. In contrast, some of the most successful farm operations I’ve witnessed had owners/managers who kept a close hand on ensuring accounting records were up to date.
To fully digitize farm bookkeeping involves accounting software coupled with a digital receipts and record-keeping system.
Many farm owners or managers get stuck somewhere between a half paper-half digital system. For example, in the same day they may find themselves printing digital receipts and scanning paper ones. The problem with this approach is finding the information you need, when you need it.
Suppliers and customers are increasingly going paperless as well. For example, FCC recently announced they’re switching to paperless and grain companies are adopting online portals and direct deposit.
And events like the paperless years of the COVID-19 pandemic and the recent postal strike leave many to believe that we are quickly headed for paperless systems.
Good labour is hard to find, especially in remote work settings such as on farms. Technology and artificial intelligence won’t make the bookkeeper role disappear anytime soon, but finding good, local, in-person administration and bookkeeping help will be harder, not easier in the future.
Instead of piles of paper, records are now hiding in email inboxes and online portals, meaning many farm business records will still be chaotic. Cloud bookkeepers are the solution.
Bookkeeping software providers are investing resources in cloud solutions rather than legacy desktop programs. Cloud bookkeeping software is a better match for digital receipts because it allows you to hire a bookkeeper from anywhere. And once you’ve adopted cloud bookkeeping software, you can access your information from anywhere.
Ultimately, going digital could take farm administration work off your desk.
The case for paper
Some farm managers still prefer a paper filing system. This means, however, that the accountant can’t consult farm records until those files physically arrive at their office.
Some farm business owners distrust cloud storage systems. But safety measures such as backups of electronic information and authorization to access information using passwords and secondary authentication make these information storage systems secure.
Yes, learning new software and systems will require a time investment. If you do your own books, or if you have good in-person help, a paper filing system may be adequate for now, but the trend is towards more of our work life going digital. Farm owners are increasingly living in a half paper-half paperless/digital world. The goal isn’t just to digitize your farm records, but to have access to up-to-date information that can help you make your next decision.
Now is the time to go digital with your farm records.
– Craig Macfie, CPA, PAg provides fractional CFO services to growing farms and agribusinesses. Find out more at www.springcfo.com.
