Farming Accounting that meets your needs.
We know that one of your chief responsibilities centers on finding resources to help your business grow while you focus on your day-to-day issues. We understand that agriculture is struggling to survive in today’s economy and that farming industry leaders must place a greater emphasis on efficiency through technological innovation and careful monitoring of production costs and investment return. We also know that as a closely-held business you’ve got the additional challenges of tight resources in time and people. As agribusiness accountants we are uniquely qualified to provide you with the financial expertise and advice you need. Whether it’s keeping up with current tax-saving opportunities, helping with equipment purchase decisions or developing a business continuation plan, Faw Casson is there for you.
Targeted Agribusiness Accounting Services
Estate planning and valuations
- Management structure
- Land, structures and equipment purchase decisions
- Computer hardware/software selection and training
- Lease/buy considerations
- Financing alternatives
- Entity structures
- Agribusiness accounting system design and implementation
- Cash flow management, including financial projections, operating budgets and cash investment strategies
- Employee benefits planning
- Business continuation/succession planning
- Annual and long-term tax planning
- Representation before all levels of the IRS and state tax authorities
Need to Know
Q. What are some key accounting practices for a farming business?
A.
Key Accounting Practices for your farming business
a. Keep good records from the beginning, whether you outsource / hire someone to do it, or do it yourself. You need to be able to access good financial information during the year, so you can assess how your business is doing in real time, and also when you take it to your CPA for tax planning.
b. Develop a system that works for you and make it habit. There are good software programs out there, but if you only update your information at the end of the year, you’ll never get good at it and it will be harder to build confidence in, or understand, the financial side of your business.
c. You may be able to file your taxes on the cash basis of accounting, but be sure to keep track of your receivables, payables, fixed assets and debt – those impact the overall health of your business, too, and can leave you wondering “where’s my $$ going”?
d. Talk to your CPA throughout the year. The tax laws change, and they don’t always mirror your cash flow, so without a good working relationship with your CPA, you’re bound to have “surprises” come tax season.
e. Do your homework on determining whether the people that work for you are employees or independent contractors. The Department of Labor has been aggressive in auditing businesses on that subject, and the penalties can be hefty.
2. What to do when considering diversification into Agritourism?
a. Depending on the size of the agritourism venture relative to the rest of the business, you may or may not want to establish a separate entity. Either way, keep track of your income and expenses separately by type of product or event, so you can evaluate them separately, figure out which ones are most profitable, and track trends over the years.
b. Legal liability concerns may be enough of a reason to set up a separate entity. If you separate the activities, you can also separate the risks, so that the assets of one are not subject to a claim from the other. An example would be a “slip & fall” situation that might occur on a guided tour. If the tour business is separate from the farm, then the farm assets may be less exposed to liability.
c. Setting up a separate business also allows you to have different owners. Many farms are family operations, and you may have one generation interested in expanding into agritourism, but not another.
d. Assess what skills you will need for your new venture that might be different than those you currently have. Examples include retail, hospitality, inventory management, purchasing, delivery, sales &/or social media. If you don’t have those skills in-house, be sure to consider in your business plan how you are going to attain them – hire, contract, train existing personnel, etc.?
3. Why should your CPA be a resource partner to your farming operation?
a. Having a strong working relationship with your CPA means no surprises. Keeping in touch throughout the year means you’ll know how you’re doing along the way, and what to expect at tax time. Find a CPA that is a good fit for your business, and then let them show you what they know.
4. 3 key action items for every farming business
a. Make records organization a habit. You’ll only get good at it when it becomes a habit, and the benefit of the habit is never having to play “catch up”.
b. Make time regularly (or at least in between busy seasons) for working ON the business, not just IN it. Schedule it like you would a dentist appointment, and use that time for strategic analysis and planning, such as financial performance compared to projections, ROI on marketing and promotional activities, product and service lines, capacity / expansion plans, staffing & skills.
c. Look for “blind spots”. What are the strengths and weaknesses of your operation? How important are the areas where you’re weakest? If they’re important, work on a plan to shore them up – by hiring, adding a contractor, or getting training.
