As spring nears, many farmers are getting their records organized for income tax time. Hopefully bookkeeping has been done on a regular basis and it’s just a matter of waiting for the appropriate slips to show up.
Kari Burnett, PA., Regional Farm Business Management Specialist,
Sask. Ministry of Agriculture, Swift Current
For others, this is the time of year where they are sorting through drawers and shoe boxes and promising themselves they will do a better job of being organized for the upcoming year.
Farm record keeping should involve both financial record keeping and production information.
Financial records can help to identify areas of strength and weakness for a farm business. They should be consulted as a starting point for making planning decisions. As the majority of planning decisions will involve spending, many will involve a need for credit. With good, up-to-date records it may simplify discussions with a financial institution in providing evidence of what the business is achieving. It will also help to make the decision to go through with the purchase, and whether or not to use long-term financing.
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In addition to keeping good financial records, it is also important to take some time to accurately record production information. The principal reason for keeping written production records is to have documentation of the important pieces of the production cycle – what, how, when, and where it was produced, whether it’s a grain farm or livestock operation.
The records allow you to track your production and historical yields over time, as well as inputs, costs, and revenue generated. For livestock, in addition to tracking animals born and lost, you could also track vaccinations and other medicines, feed, days on feed, breeding rates, and weaning weights. This can make it easier to make decisions come time for culling and rebreeding. You will be able to calculate your cost of production, and anticipate cash inflows and outflows. Good records will allow you to see if you can spot any trends on your farm.
There are many methods of record keeping. Some producers keep a small notebook in the tractor and/or truck, while others keep detailed ledgers or spreadsheets. The use of smart phones is becoming more common, as there are many apps and other record keeping software available, depending on the user’s needs and capabilities. Variable Rate Technology along with mapping and integrated information that is collected through the GPS/Field monitor systems that are available now on most equipment is great – the information is right at your fingertips, but the key is to be able to use it. Records are easy to collect and should be easy to access.
Remember, higher quality information put into the records will be more useful later on. The important thing is to get the information recorded.
Production record information is needed for Crop Insurance, to file your Production Declaration, as well as to meet the deadline to submit yield-loss claims on harvested cereal, oilseed, pulse, honey and potato crops and request any extensions of insurance on unharvested acres. You will also need this information to file your AgriStability application if you are enrolled in the program. If you are unsure of how much grain is in your bins, it is still important to record your best “guess” of what is there, and to use subsequent sales tickets for confirmation.
Having complete production and financial records are important tools for farm management. Production results can impact the financial situation of a farm business. This includes understanding cost of production, managing expenses, individual enterprise analysis, production strategies, and other environmental impacts and regulations.
Without written records, producers have to depend on their memory when making decisions, and as we get older and busier, we know our memories can become unreliable after a few weeks or months. Production and financial records should be consulted as a starting point for making planning decisions.
For more information, stop by or contact your local Regional Office or contact the Agriculture Knowledge Centre at 1-866-457-2377.
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