Increase Profitability with AgriBuilder
Farming today is a way of life…a business passed down from generation to generation. While your land may be relatively the same, the way you manage it is anything but. Managing profitability becomes more challenging due to changing weather, increased international competition and rising costs. Farm management technology is what makes it easier for farmers of all sizes to get more profits out of their land than ever before. Starting with solid accounting software and layering in agriculture-specific financial management software coupled with the advice of seasoned financial consultants who know ag, and you can have more accurate information – faster – to help you make better business decisions.
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 fund.
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.
About Burlington (CO)
Burlington, located in the eastern plains of Colorado, is a town with a strong agricultural heritage. Situated in Kit Carson County, this rural community has a deep connection to the land and a rich history of farming and ranching.
The agricultural landscape in Burlington is primarily characterized by large-scale farming operations that cultivate a variety of crops. The region’s fertile soil, combined with the availability of irrigation water from sources such as the Republican River, supports the growth of diverse crops. Wheat, corn, sorghum, sunflowers and alfalfa are some of the major crops grown in the area. These crops contribute significantly to the local economy and provide essential resources for the region and beyond.
Livestock farming also plays a crucial role in Burlington’s agricultural sector. Cattle ranching is prevalent, with many ranchers raising beef cattle for meat production. The vast grasslands and ample grazing areas in the area provide favorable conditions for cattle rearing. Dairy farming is another important component of the local agriculture industry.