Farm Accounting: Why Accounting for Farmers is Different?
It is obvious how farming differs from many other businesses out there; but what you may not realise is that farm accounting can actually differ to how you would approach “normal” accounting.
Why is this? What makes accounting for farm work so different from other types of accounting out there?
No business is like farming
One thing is for sure, there is no other business out there that is like farming.
Farming, or Primary Production, takes into account a wide & varied range of assets, some of which have nothing similar in the standard business world. In fact, most of the assets that you need to take into account are alive, such as animals or crops. Income and expenses are governed by the seasons, and seasons can be unpredictable. The Australian Tax system has all sorts of tax breaks, treatments and GST concessions specifically available to Primary Production enterprises. That’s why a farm, as a commercial enterprise, with its livestock, crops, land, equipment or buildings requires a special kind of expertise.
Your land is more then an asset
You need to think about your land and how it can be used for production today, but also how you can retire or succession plan and gain the best outcome for your family.
Land is vital for your farming business to run and should be treated as such. Costs that are associated with managing and nurturing land should be accounted for and these are going to be ongoing costs to increase potential production.
Accurate and up to date Accounting data can help with managing cash-flow, budgeting and targets. If your records are not accurate you cannot make informed smart business decisions.
Stock can be hard to manage and value
As a farmer you are going to know how much a crop or an animal is roughly worth to you, however, when it comes to accounting, this can be hard to show. You may find that your stock could end up being improperly counted, deaths and natural increase need to be valued and keeping accurate records can be difficult and time-consuming. Inaccurate data can throw out your entire management stock systems. New innovations are available and will make your bookkeeping more time efficient, cost effective and accurate. Working with these systems can improve your efficiencies and take you out of the office and back to the paddock.
The Right Approach for Farm Accounting
Primary Production takes a lot of time and effort. There is a lot of blood, sweat and tears. It is a 24 hour a day job and it gets under your skin. Farmers live and breath their farm. That’s why farm accounting and farm bookkeeping are neglected while farmers are busy with their farm work. For Primary Producers to focus on their core business, considering outsourcing farm accounting to expert bookkeepers and accountants is crucial.
A professional can take the book work and burden of accounting obligations off the shoulders of farmers and give valuable time back to attend farm duties. Outsourcing to Australian based professional experts can take some of the strain of office work and provide relief and piece of mind. Better decisions can be formed knowing that the numbers are up to date and accurate.
If you are one of the many Australian farmers out there and you are looking for local rural bookkeepers & accountants in New South Wales who can help you, then look no further. We can help you to ensure that your farming accounts are as they should be and that everything is in place. And that the data is working for you.