Farm RecordkeepingSHANNON DILL
UNIVERSITY OF MARYLAND EXTENSION
Objectives:•The importance of farm records
•What farm records to keep• Personal• Production• Financial
•How to manage farm records• Excel• Quickbooks/Quicken• Apps
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!”
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
Keeping Farm RecordsThree basic types of farm records:
1. Resource inventories
2. Production accounts or livestock and crop operations
3. Income and expense records
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
- Might add original purchase price- Tag Number, VIN number, serial or id
number- Include EVERYTHING – machines,
implements- Photos
- May also include the expense to build and improvements- Photos
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
Sample Sheets for Grain Crops
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
Create - Projected and Actual
Create - Projected and Actual
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,
Budgets by Enterprise
•Per acre, bushel, head, lb, dozen, square foot……..
- 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
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
Templates https://templates.office.com/ or click NEW
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
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
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.
Shannon Dill University of Maryland Extension – Talbot [email protected]