Farm Financial Management FAQs
Farm financial management is a comprehensive process that involves planning, tracking and analyzing financial resources to ensure profitability, sustainability and stability of operations. Effective management includes a robust accounting program focused on budgeting, cost control, cash flow management, projections, and informed investment decisions. Armed with accurate financial information, farmers can make important decisions about:
- investing in crops and livestock,
- managing debt,
- maximizing profits and
- the pros and cons of loans and government programs.
AgriBuilder creates the most value for agricultural businesses by integrating:
- intuitive accounting software (Xero)
- seamless and actionable farm management software (Figured) and
- ongoing advice and support from seasoned agriculture financial consultants.
A robust farm accounting program helps farmers manage finances, expenses and income while seamlessly integrating with your farm management system. In addition to these necessities, your farm accounting software must help you streamline the process for annual tax filings. Check out these common signs that your accounting system is broken.
Adams Brown regularly reviews financial reports with agriculture clients to monitor operations, assess profitability, identify trends for planning and make informed decisions. Together, we also review:
- accounts payable and receivable,
- budget versus actual,
- break-even analysis,
- cost of production,
- crop gross margin,
- depreciation schedules,
- inventory breakdowns by field and/or crop
- market value balance sheet and
- tax projections.
A holistic approach to reviewing your financial and farm management data ensures your ability to make sound business decisions for your farm while planning for future initiatives, investments and goals.
Additional farm financial management insights:
An effective farm accounting process delivers updated financial reports that empower decision making. There are three standard financial statements including the balance sheet, income statement and statement of cash flow. The balance sheet conveys details about the farm’s assets, liabilities and overall net worth. The income statement reports revenues and expenses over a specific period of time, and the cash flow statement highlights the movement of cash.
While each farming operation faces unique and different challenges and opportunities, there are some general guidelines which can help improve cash flow. These include:
- timing large purchases with revenue cycles,
- ensuring a diverse source of income (for example, agritourism, integration of wind farms, leasing hunting ground),
- negotiation of payment amounts and terms with vendors/suppliers,
- leveraging lines of credit and
- maintaining an emergency fund.
Understanding your farm’s value is important for various reasons, ranging from financial planning to strategic decision-making. Whether you are buying, selling, planning your estate or evaluating operational success, knowing what your farm is worth can provide critical insights to help you achieve your goals. A thorough farm valuation will help you conclude the true value of your farm.
Map of Greeley (CO)
About Greeley (CO)
Greeley, located in Weld County, Colorado, is an agricultural powerhouse with a long-standing history and reputation for its thriving agriculture industry. The city’s fertile lands, favorable climate and progressive farming practices have made it a prominent center for agricultural production and innovation.
Greeley’s agricultural landscape is diverse, encompassing both crop cultivation and livestock farming. The region’s primary crops include corn, wheat, barley, sugar beets, sunflowers and various vegetables. These crops benefit from the area’s ample sunshine, moderate rainfall, and access to irrigation water from sources like the South Platte River and the Colorado-Big Thompson Project. The agricultural community in Greeley employs modern techniques, such as precision agriculture and advanced irrigation systems, to optimize crop yields and conserve resources.
Livestock farming also thrives in Greeley, with a particular emphasis on cattle and dairy production. Cattle ranches are widespread and the city is home to several feedlots and meat processing facilities. The surrounding grasslands provide ample grazing opportunities for cattle, contributing to the high-quality beef production. Additionally, Greeley’s dairy farms produce milk, cheese and other dairy products, bolstering the region’s agricultural output.