Here is some information and resources that I gathered at the Financial Fitness for Farmers class that I attended March 11th. Each of us were given a copy of this book:
Fearless Farm Finances. This book will help you understand basic financial management for your farm. Includes instructions, tips and tools–plus real-life examples from successful farmers and sample data from fictitious farmer “Otto B. Organic.”
Financial Fitness for Farmers
This presentation was presented by Kathleen Painter. She is an Extension Educator in Boundary County, Idaho. She has a PhD in agricultural economics. Here are the topics we discussed:
Balance Sheet – summarizes the financial condition of your farm at one point in time
Here is an example of a Balance Sheet
Income Statement – summarizes the revenue and expenses for a given accounting period
Enterprise Budgeting – the best way to determine profitability of a specific crop or livestock operation is to develop an enterprise budget. An enterprise budget is an estimate of the costs and economic returns (profit) for a particular crop or livestock enterprise.
Cash Flow Budgeting – a summary of the projected cash inflows and outflows for a business over a given period of time.
A “Statement” is history and a “Budget” is a projection into the future.
There are a lot of nice resources, tools and templates available at the Maine Small Business Development Center website. Click on picture above to visit their Tools and Templates webpage.
One of the resources listed in our book is The Carrot Project. I checked out their website and they have some webinars that cover using Quickbooks and Basic Accounting for Farmers:
Click to watch Part 1 of the Basic Accounting for Farmers.
Julia Shank Food Consulting website has a nice list of short videos that explain all the accounting terms that I noted above. For example, click HERE to view a short video on cash vs. accrual accounting.
Having good finances can help you make decisions on how to make your farm more productive.