Farm Accounting Software

Posted on 12th Nov 2018

Article By: Software Advice

If you’re a farmer, the last thing you want to worry about is making sure your books are accurate and up-to-date. Unfortunately, in the face of growing production demands, dwindling resources and increasing costs, keeping track of every bag of feed and piece of machinery is becoming more vital than ever to not only properly budget for the months and years ahead, but to also take full advantage of valuable government subsidies and tax deductions.

Making matters worse, manual accounting methods like pen and paper or Excel spreadsheets can be incredibly time-consuming and riddled with errors. Hiring an external accountant is also not a viable solution if you can’t afford one. What can you do?

What Is Agriculture and Farm Accounting Software?

If you’re a farm, ranch or other agricultural entity, you need accounting software that has more functionality than what’s found in a basic system.

For example, you need to be able to track inventory for perishables and livestock, including births, deaths, birth weights, weaning weights and more. You also need to be able to keep track of inventory in multiple units of measurement depending on the type of crop or commodity you’re selling. If you have more than one farm or plot, these needs are magnified tenfold.

With features for things like inventory management, asset depreciation, purchase orders and budgeting, agriculture and farm accounting software is designed to cater to these specific needs.

What Type of Buyer Are You?

Small business buyers. These small farms are on the verge of upgrading basic systems, like QuickBooks, to support more sophisticated agriculture-specific functions like forecasting, product management and ratio analysis. As ranches and agriculture entities reach a certain size and require advanced functionality to grow, businesses will need to upgrade their systems.

Enterprise buyers. These buyers represent farms and agriculture organizations that need the functionality of a full enterprise resource planning (ERP) suite for a large entity. Seamless integration is usually more important than specific features; however, there is considerable differentiation in both of these areas, and buyers should examine both. Sage and Microsoft Dynamics are two of the largest vendors for ERP and offer sophisticated systems.

Best-of-breed buyers. These buyers need stand-alone software solutions for specific functions. For instance, while agriculture organizations need systems for core functions like payroll, they also need programs with specific features for inventory management or crop/livestock ratio analysis. These buyers may seek a product that has deep functionality in one of these application areas rather than a full financial planning suite.

Evaluating Agriculture Accounting Programs

Agriculture-specific solutions should be able to handle the wide variety of agriculture costs. Providing crop break-even analysis in consideration of fertilizer, chemicals, seed and rent on land by individual field, acre or bushel is crucial for a precise agricultural accounting resource. The appropriate solutions package will also come equipped with farm industry standard ratios to gauge financial efficiency with respect to the agriculture industry.

When evaluating these systems, buyers should consider the following:

  • Does the system support agricultural inventory types?
  • Are the appropriate industry standard ratios included in the software?
  • How many different farm operations can the program support?
  • Can the system forecast based on hypothetical environmental conditions?