I recently began reading Truman Capote’s 1965 masterpiece, In Cold Blood. While reading, I was struck by Capote’s description of farming in western Kansas during the 1950’s:
"Farming is always a chancy business, but in western Kansas its practitioners consider themselves “born gamblers,” for they must contend with an extremely shallow precipitation (the annual average is eighteen inches) and anguishing irrigation problems. However, the last seven years have been years of droughtless beneficence."
While it wasn’t Capote’s intent to provide a comprehensive list, I couldn’t help but think how much farming has changed in the last 70 years… affected by increased mechanization, trade wars, the relative value of the U.S. dollar, emerging foreign markets (import and export), land consolidation, sustainability/conservation pressures, and all of the other issues that seem to plague America’s farmers year after year. This doesn’t even account for inflation and continually rising input costs, which by now our farmers simply take as a given.
Packing a Punch for the Pinch
As we interact with farmers across the nation, one point is acutely reinforced: farmers are getting “pinched” on all sides, and margins continue to shrink or be at risk. In this continually changing “rising cost, shrinking margin” marketplace, farmers can’t risk having inaccurate financial information. Slightly lower yields, a few late vendor invoices, or budgetary overspend all have the ability to make or break a farming season.
The unfortunate certainty is that numbers don’t lie, and the pinch can be devastating for some operations. One might expect that accessing accurate financial information would be at the top of the list of each farmer’s “to-do’s,” but we understand that this issue is among a dozen other essential matters that farmers must tend to daily.
3 Top Mistakes Farm Operations Make for their Bottom Line:
- Push off accounting, and deal with it only after year-end at tax time, or
- Utilize a family member to oversee the books, with little formal training, or
- Employ a part-time bookkeeper, who may or may not understand the in’s and out’s of the business, or primarily just pays the bills.
For most farmers, operating this way can impede the way they handle timely issues, and interfere with the level of accuracy necessary to make time-sensitive, important operational or strategic decisions that could make or break their business. We’ve witnessed that even when the information is accurate and timely, it often doesn’t integrate with the software that the farmer is using to make strategic decisions. Worse yet, the crucial data isn’t being distributed in real time to the farmer’s accounting and financial consultants. And all the while, those time-sensitive decisions are mounting, and they can’t wait.
How to Access Timely, Accurate, and Easy Information
The good news is that there are solutions that are providing farmers with easy access to clean financials and aiding in decision-making. When the entire process comes together, getting timely financial information is a breeze and farmers can free up to tend to other daily operational activities.
For example, K·Coe Isom and Agworld have collaborated on a comprehensive and scalable solution to deliver reliable information into farmers’ hands at the time they need it. It’s called managed accounting services and it works by providing a scalable back-office solution for farmers across America. Producers can tend to daily operations by outsourcing where it’s needed: data management, accounts payable and bill pay, payroll and HR, customer invoicing and collections, capital asset tracking, and financial reporting functions. This adds the capability to access accurate information whenever you need it, and have financial information available for tax teams, ag-consulting teams, and any other accounting and finance professionals, streamlining the tax preparation, tax consulting, financial reporting, and consulting processes.
In the coming issues, we’ll be sharing more information on managed accounting services and how this service offering can provide you with the critical information you need to make the right decisions at the right time. In the meantime, please don’t hesitate to reach out to Peter Martin or myself for more information regarding managed accounting services.