It’s no secret that paperwork is one of the most dreaded jobs on the farm. Couple that with the pressure of dealing with the farm’s finances and you’ve got a recipe for stress.
For years, thousands of farmers across the country have relied on QuickBooks Desktop accounting software to help manage the farm’s finances. However, recent changes to the system’s price and cost structure have caused some farmers to question whether or not the program is worth the price tag.
“Farm managers need sound financial records to prepare income tax returns, obtain financing from lenders, analyze new investments and make business decisions with confidence,” says Mary Kate MacKenzie, a Farm Business Management Specialist for Cornell University. “A strong financial accounting system is foundational to the success of any farm. Every accounting system has its costs and benefits, and a farm manager must analyze both to select the best option for their business.”
When selecting a new accounting system, MacKenzie notes there are several questions producers must first ask themselves. Before choosing a new system, consider the following:
- Who on the farm will manage the accounting system? What tasks will they be responsible for and how much time will those tasks require?
- What is the total cost of the accounting system, including initial cost, annual subscriptions and labor?
- Are there adequate resources for education and support? How much training is needed and how much will it add to the total cost?
- How easy is it to transfer financial data from the existing accounting system into the new one? Will the farm lose access to records that cannot be transferred?
- Does the accounting system meet the needs of external entities? Can the farm file tax returns on time and generate information that lenders require?
- Does the accounting system provide value for internal decision makers? Does it generate reports that help farm managers improve business performance? Does it support analysis and planning to strengthen farm viability? How much is this worth to the farm?
“Each farm has a unique set of goals and resources that inform management decisions,” MacKenzie adds “Before selecting a new accounting system, take time to write down your goals and identify the resources (time, money, skill) you can devote to it.”
