By Andi Anderson
Keeping accurate financial records is key to the long-term success of any farm. While many farmers prefer working outdoors, dedicating time to organize farm finances pays off in the long run.
Former ag loan officers often saw farmers bring boxes of loose receipts when applying for loans. Understanding farm finances—even when they aren’t strong—can make the process easier. Knowledge empowers better decisions.
Take a Course
Community colleges often offer short courses in record keeping and farm accounting. These help farmers understand basic financial terms and reports, even if they hire professionals. Better understanding leads to better decisions.
Choose the Right System
You don’t need the fanciest software—choose one that fits your farm’s size and your comfort level. Ask your advisor or bookkeeper for suggestions and test systems before buying. Though Excel is cheap, specialized farm software offers better reports and audit readiness.
Schedule Regular Office Time
Set aside weekly office time to record income and expenses. If someone else is better at this task, delegate it—but always stay involved and review the reports. Use folders to sort receipts when busy.
Use Dedicated Cards
Using farm-only credit cards or digital banking tools helps track expenses. Keep receipts and avoid cash payments to reduce the chance of lost records. Always separate business and personal accounts.
Make the Process Easier
Choose banks and software that allow statement downloads. Some tools also let you attach digital bills. Use a scanner to upload multiple receipts at once and be consistent with your process.
Year-End Review
Learn how to create key reports such as profit and loss, balance sheet, and cash flow. These reports help identify errors and track farm performance. Over time, comparing yearly data highlights strengths and areas for growth.
Photo Credit: istock-dusanpetkovic
Categories: Illinois, General