When fertilizer prices shoot up 40%, diesel costs double or interest rates creep higher, your ability to make good business decisions comes down to one thing: Do you truly know your cost of production? 

Most farmers track income and expenses for tax season. That’s financial accounting. But when it comes to making day-to-day and year-ahead decisions — like whether to expand acreage, switch up tillage methods or invest in new equipment — financials alone won’t cut it. That’s where managerial accounting comes in. 

What Is Managerial Accounting — and Why Should you Care? 

Managerial accounting helps you analyze each part of your farm individually so you can see what’s working, what’s not, and where to go next. While financial accounting answers, Did I make money this year, managerial accounting digs deeper: 

  • Which fields or herds are driving profit — and which are dragging it down? 
  • What’s my breakeven per unit? 
  • Is my equipment investment actually improving ROI? 
  • How do I compare to my past performance or to other farms like mine? 

Instead of lumping all your income and expenses into one giant pot, managerial accounting separates them into profit centers and cost centers, giving you a much clearer picture of your operation. 

Key Questions Managerial Accounting Helps you Answer 

Farming is full of variables. Managerial accounting helps you measure and manage them. 

  • What’s the margin in each profit center (e.g., crop vs. cattle)? 
  • How do my cost trends compare year over year — or against peers? 
  • What’s the financial impact of changing tillage or input strategies? 
  • Is my capital equipment improving ROE or tying up cash flow? 

Technology that Makes It Easier 

Time is tight. That’s why modern farm management tools like Figured, when paired with Xero accounting software, are game changers. 

These cloud-based tools were built for ag producers. They allow you and your advisor to collaborate from anywhere, in real time, using up-to-date data. 

With Figured + Xero, you can: 

  • Track crop, livestock, and dairy budgets separately 
  • Monitor margins in real-time by production unit or field 
  • Enter sales and expenses once — Xer sends invoices to Figured and reconciles automatically 
  • Manage multiple entities or farms from one dashboard 
  • Use real-time reports to forecast ahead — not guess 

No more juggling spreadsheets or waiting until year-end to see where you stand. 

What you’ll Need to Track 

To make the most of managerial accounting, you’ll want to go beyond just dollars and cents. Useful data includes: 

  • Units/Quantities Produced
  • Production Year 
  • Field or Location 
  • Profit & Cost Centers 
  • Responsible Person/Manager 

This might seem like more work up front, but the payoff is worth it. You’ll be able to make faster, smarter decisions — especially in volatile years. 

A Smarter Way to Manage the Farm 

At Adams Brown, we believe you deserve more than just tax prep. That’s why we developed AgriBuilder — a specialized advisory service designed to help producers improve financial clarity, make more strategic decisions and increase profitability over time. 

AgriBuilder combines proactive planning, managerial accounting and personalized advisory to give you a year-round view of your business. We help you set targets, track performance and make decisions with confidence — whether you’re looking to grow, transition the farm, or simply do more with what you have. 

You know how to run your farm. We help make sure the numbers back you up. 

If you’re ready to get beyond the basics and take control of your margins, breakevens and financial direction, AgriBuilder can help. For more information, contact us at adamsbrowncpa.com.