Options available for producers seeking business recordkeeping programs
Deadwood, S.D. – “We need to train ourselves to start recordkeeping and take time to do business. It will pay off,” said Dave Koupal of Mitchell Technical Institute at the Wyoming and South Dakota Joint Young Farmers and Ranchers Conference in Deadwood, S.D. on Jan. 23.
Many different recordkeeping programs are available to producers, ranging in complexity and available features.
“There are a lot of good programs, but any program is only good if we use it,” Koupal noted. “We can buy every program, but if we’re not going to put in the data, it’s no good. Probably the biggest problem I have with my clients is deciding who will put in the data.”
Although programs such as Quicken and QuickBooks are useful, they do not use language specific to agriculture and may not be as helpful as a program that has been created for the industry.
“I like ag language. When I’m doing analyses with my clients, we’re going to be using pounds, tons and bushels. I will want to know how many tons of hay were bought and how many tons of hay were sold,” he said.
Features such as account charts are also a consideration for producers seeking out a recordkeeping program, and many programs are available with ready-made charts integrated into their software.
“I want to be able to go in and change those charts of accounts and make them what we want,” suggested Koupal.
Meeting with a tax accountant can also be helpful when seeking out a program as some ag professionals may have a preference based on their office’s systems and the producer’s operation.
“I highly encourage producers to meet with their tax accountant because they want to be in sync at the end of the year. A lot of times, if they can do that, the accountant can do the taxes a lot faster, and it saves the producer money,” he explained.
Speaking with an accountant about setting up an appropriate chart of accounts, listing assets and operations related to the business, was recommended by Koupal, as well.
“Be specific so we can expense things out when we do the analysis,” he suggested. “Plus, as a management tool, we can print out a report to see something like how many lick tubs we bought throughout the year.”
Balance sheets are another tool to use when employing recordkeeping programs, and keeping them up to date can help ease the process of going through banking and loan conversations.
“If we come in with balance sheets and reports, lenders will be impressed. Before we go to the banker, we should do our homework, get prepared and have our reports,” he remarked.
Many programs also provide assistance with specific enterprise analysis, employment records, such as payroll and 1099 or W2 forms, and cash flow projection worksheets.
“There is a big variance in the cost of programs. We should look at the cost of the program, as well as the costs of upgrades. Some of the upgrades are very expensive,” Koupal warned.
Investigating what kind of technical support is available for certain programs is also another point to consider when shopping for an appropriate program for the business.
Koupal also suggested keeping track of insurance policy information and reviewing it regularly to ensure that it keeps up with enterprise and inventory changes.
“We should go through it at least once a year,” he stated, adding as an example, “If we have rented land, we should make sure to check with our insurance agent. If we have rented or leased land and it’s not on our policy, we might not be covered. We need the legal land description on that policy.”
The insurance agent producers talk to can also be important, and reviewing multiple coverage options is beneficial.
“I want an agent who has multiple policies and who is willing to work with me and make changes,” noted Koupal.
Along with the right insurance agent, other professionals involved in the business should have a good understanding of what a producer is doing and what goals they have in mind.
Koupal explained that he reviews his team of professionals each year, looking at it like a sports team draft pick.
“We need to build a group of people we want on our team. Our vet, insurance person, market consultant, lender or financial manager – we want them be working for us, not working for them,” he explained.
Being involved in organizations such as cattlemen’s or crop associations can also be useful, providing the opportunity to make new contacts and learn about team members who help support the operation.
“If we find someone more knowledgeable and more willing to help us out, we need to get them on our team,” Koupal commented, noting that although difficult, it may also mean firing people who aren’t as useful to the business.
“Interest rates are very important, but what is more important is having a lender we trust and who knows our operation,” he continued.
Finally, Koupal stated that keeping everything written down is an important part of recordkeeping for the operation.
“I love my dad, and we have a great relationship, but we have stuff in writing,” he remarked. “It’s better than things going bad and having something hurting us financially. There is nothing wrong with having a written agreement.”
Natasha Wheeler is editor of the Wyoming Livestock Roundup and can be contacted at email@example.com.