Successful farm accountants wholeheartedly embrace farm accounting software because it makes them and their clients more effective. When someone, the farmer, the accountant, or their bookkeepers input the correct information correctly into the farm accounting software – something a cave man can be trained to do, the output is accurate and provides the accountant with the information they need to do their most important job.
Filing taxes, creating P&L statements, doing the work up for audited balance sheets and all the compliance work farm accountants do – well those are tasks. Their job is to provide their clients with insights, strategies, and support from their perspective as both an accountant and as a confidant.
A typical farm accountant keeps track of the money, files the various reports with the various agencies and entities the farmer is involved with. A typical farm accountant spends a large percentage of their time in compliance – defense and putting out fires.
Successful accountants, the type of advisor every successful farmer should be looking for uses compliance as it was intended, to report on what has happened – and they use farm accounting software to reduce the amount of time it takes, while remaining as accurate as it is possible to be.
Successful farm accountants focus their efforts on the offence – doing the planning, directly or indirectly, in advance that will make the next round of reporting more favorable than the last and the next even more so and so on and so on.
A successful farm accountant is above all an advocate and advisor to their clients. They know, for example that when two or more brothers/cousins etc. work together – that there will be issues.
Invariably those issues involve money. And since one brother can’t pick up and leave – taking his land with him, and move to the other end of the county and start over, the successful accountant will help them discuss creative ways to handle the money issues so the whole farm doesn’t sink because of a conflict about dollars. The accountant is ever vigilant, on the look out for any hanky panky with the farm’s property and resources too.
Whether estate taxes, federal and/or state inheritance taxes etc. are part of the equation or not – cash is still going to be required when one of the principles of the farm dies. There must be enough money, without bankrupting the farm, to buy out the heirs of a deceased partner so the farm can go on and so their family gets a fair return for their life’s work.
Successful farm accountants will recognize when it is necessary to reorganize the farm in order to shift some of the farm’s growing value to the next generation before the farm gets too big for one or the other partner to buy.
And the successful farm accountant has contacts they trust – so the farmer can trust them too, who have extensive experience in matters of estate planning, succession strategies, management transfer etc. And it is their job to insist that the farmer talks to these specialists!
Every farmer, even if he or she does plans to live forever, must have an exit strategy. Their accountants are key advisors who help the farmer understand how much money they will need to live on, how many dollars from the gross revenues of the farm that will take, and where will the money come from. They can help the farmer select assets that can be liquidated today – with some of the proceeds set aside for retirement and the rest used to replace the land (for example) that was sold.
Successful farm accountants know the importance of making decisions regarding money, sooner rather than later – so less interest is paid and the farmer has longer to benefit from compound interest!
These are but of few examples of ways successful farm accountants spend their time for the benefit of their clients. Whenever they can harness the power of farm accounting software to crunch the numbers, giving them accurate information sooner, rather than later – they will jump at it.
If your farm accountant says that they “don’t believe in farm accounting software” or something silly like that – you need to find a new one. This person is not ever going to be a successful farm accountant for you. For them, maybe, since they are padding their bill – but for you, I don’t think so.