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 process for annual tax filings. Check out these common signs that your accounting system is broken.
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.
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:
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 fun
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 North Carolina (NC)
North Carolina Financial Management
Adams Brown, Strategic Allies, and CPAs work with ranchers, farmers, and other agribusinesses in North Carolina to enhance profitability. Through the implementation of AgriBuilder, many farmers and ranchers now have improved financial management processes leading to more profitable outcomes. They also have more effective and informed financial management processes that create peace of mind knowing they have access to accurate information – faster – to drive better decision-making.
About North Carolina Farming
North Carolina’s farming community is characterized by its diverse agricultural landscape. From the rolling hills of the Piedmont region to the coastal plains, farmers in the state grow an array of crops and raise various livestock. North Carolina is a leading producer of tobacco, sweet potatoes, poultry, hogs and nursery products.
Crop farming plays a significant role in North Carolina’s agricultural sector. In addition to tobacco and sweet potatoes, farmers grow commodities such as corn, soybeans, cotton, wheat, peanuts and vegetables. The state’s favorable climate and fertile soils support a variety of crops, each contributing to the state’s economy and the nation’s food supply.
The North Carolina farming community embraces sustainable practices to protect natural resources and promote environmental stewardship. Many farmers adopt conservation techniques such as cover cropping, crop rotation, integrated pest management and precision agriculture. These practices help preserve soil health, reduce water usage, and minimize the impact on surrounding ecosystems.
The farming community in North Carolina is supported by agricultural organizations, extension services, and educational institutions. The North Carolina Farm Bureau, the North Carolina Department of Agriculture and Consumer Services and the North Carolina Cooperative Extension provide resources, advocacy and education to farmers across the state. Research institutions, such as North Carolina State University’s College of Agriculture and Life Sciences, contribute to advancements in agricultural practices through research and extension programs.