developing and improving your farm records · production records used to measure and report the...
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Farm RecordkeepingSHANNON DILL
UNIVERSITY OF MARYLAND EXTENSION
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Objectives:•The importance of farm records
•What farm records to keep• Personal• Production• Financial
•How to manage farm records• Excel• Quickbooks/Quicken• Apps
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Recordkeeping
Proof – The IRS may ask for revenue, expenses and inventory items
Decision Aids – Records help with making decisions on purchases, employees, enterprises etc
Institutional Requirements – Lending agencies, FSA, crop insurance require production and acreage reports
Environmental – Nutrient management, pesticides, bio-solids, irrigation all require records “Good records do not ensure
your farm will be successful; however, success is unlikely without them!”
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Personal Records•Record to keep and never throw out – These are permanent record
• Tax returns, legal documents, vital records, retirement, investments, etc
•Business records – need a permanent file• Financials, legal documents, licenses
•Tax records for 6 years (Min)• IRS can go back 6 years to audit
•Everyday paperwork – 3 years• Monthly financials, credit card statements, utilities, medical bills
•Uncategorized• Car (keep until sold), credit card (until reconciled), Policies/warranties (until they expire)
Have a shredder or use community shredding services
http://www.smead.com/hot-topics/records-retention-guidelines-1394.asp
General purpose guidelines and do not include unusual or extenuating circumstances
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Keeping Farm RecordsThree basic types of farm records:
1. Resource inventories
2. Production accounts or livestock and crop operations
3. Income and expense records
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Resource InventoriesCount and assign value to your resources and equipment on your farm
Resources include:◦ Assets: Items you own◦ Liabilities: indicate what you owe
Why? Inventory◦ Determining your net worth – Balance sheet◦ Computing noncash expense, such as depreciation◦ Assists with taxes, insurance, and purchasing decisions
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- Might add original purchase price- Tag Number, VIN number, serial or id
number- Include EVERYTHING – machines,
implements- Photos
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- May also include the expense to build and improvements- Photos
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Production RecordsUsed to measure and report the performance of crop and livestock enterprises on the farm
Crop records include:◦ Soil conditions, cropping patterns, field layouts, and building locations◦ Crop rotation, varieties, yields, fertilizer rates and pesticide applications
Livestock records include:◦ Subsection for mortality, breeding, performance and feed information
Labor records include:◦ Amount and timing required per operation
Why? – Taxes, insurance, regulations, pricing, decisions, production expenses
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Sample Sheets for Grain Crops
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Production RecordsCROPS
Production Schedule
Crop Insurance
Fertilizer
Pesticide
Certifications
Projections
Sales
LIVESTOCK
Breeding
Health
Sales Projections
Actual
Manure
Mortality
Feeding
Water, Electric, Temperature, Projections/Actuals, Enterprise Budgets, Inventories
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Create - Projected and Actual
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Create - Projected and Actual
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Financial Records•Enterprise (Crop and Livestock Budgets)
•Financial Statements• Balance Sheet, Cash Flow, Income Statement
•Categorize expenses by IRS (at minimum)• Publication 225, Farmer's Tax Guide, https://www.irs.gov/forms-pubs/about-
publication-225• Schedule F (Form 1040), Profit or Loss From Farming,
https://www.irs.gov/forms-pubs/about-schedule-f-form-1040
•May decide to break into additional categories – example – insurance –home, farm, auto, liability, OR by crop or classes – poultry, crops and custom services, or spring crops, summer crops, fall crops,
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Budgets by Enterprise
•Per acre, bushel, head, lb, dozen, square foot……..
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- Impossible to create without records and other spreadsheets or charts
- Example – need labor information to complete line 13, need production costs to complete 8,9,10, Need a marketing budget to complete line 18
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Managing Farm Records•So many types of records that can be kept
•Need to make decisions on what records are necessary and those that are helpful to your farm business
•Need a way to organize – find information and quick/easy to use
•Computer options• Microsoft Templates• Excel• Quicken/QuickBooks• APPs• Other – Some farm software hitting the market
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Excel•Organized, Formulas, Graphing
•User ideas• HELP – count, weighted averaged, percent change• Create – Workbook with worksheets• SAVE AS – NEW_9_26_2018• Copy functions• Filter function for headings• Graphing
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QuickBooks/Quicken•Manages accounts payable/receivable
•Has payroll features (version)
•1099 feature
•Schedule F
•Easy to reconcile & produce reports
•Enterprise accounting
•Will write checks
•Generates financial statements
•Creates invoices
•Maintains list of vendors and customers
•Manages lines of credit and credit cards
•Cloud based
•An many more
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Apps•Play/itunes store and read reviews
•Over 500 apps listed• https://www.farms.com/agriculture-apps/• Categorized
•No one notebook, software or app will meet all your needs! Most use a mix of written and electronic.