Managing a farm can be a really hard thing to do. Firstly, many activities take place there, and whether you are only focusing on one thing, for example, plants, or you are working both with plants and animals, keeping track of everything can be hard. Especially if you are trying to do everything alone, thinking that you will not need to hire a person to work your accountings and manage everything financially so you don’t have to stress about the tax or expenses that you didn’t know that you had to pay and avoid being in trouble because of it.
Keeping the finances right, and keeping track of everything that you earn and spend throughout the year can have great benefits for you. For example, you can see which plant earns you the most and which one is keeping you at a loss so you can manage everything before the new season starts so you can adapt to it and earn more in the future.
In this article, we will talk about some tips that you can implement to help you manage your farm’s bookkeeping and accounting.
1. Keep your personal, and the farms account independent
This is really important, and you should put this into practice. It is confusing to use both accounts for the same purpose because of many reasons. You will not be able to track your spending and earning and you will spend resources from one place for things that you need in other places.
For example, you should not use your farm money to buy things for your home, and you should not use the finances from your personal account for expenses on the farm. That is why you have two accounts, one for each purpose. Transfer money from one place to another so you know what you spend on.
2. Have a different source of credit for every activity that you do
If you are working on more things, it is better to have separate accounts for them so you can understand some things that happen, and also make the organizing easier. For example, if you are focused on two things on the farm, let’s say animals and plants, you should have different places of finances for them.
With that, you will spend the money for the animals with the account meant for them, but you will also put the earnings there. With that, you can understand what is making you more profit, and what is just draining your finances – to get more Information on farm accounting click here.
3. Use digital tools
Since everything is more organized using tools like these, you should definitely implement them in your work. You can make a table with the account and add how much you have spent and on what, and also how much have you earned.
That way the process will be clearer so you will be able to see expenses that you make that can be avoided in the future and see what earns you most so you can focus more on that the next season.
4. Keep documents longer
Keeping documents, and balances of every year for a longer period is something that will help you analyze what have you done in the past years that you can improve in the future and things that you should avoid that caused you problems. Comparing every year will help you do that, so you plan everything for the next season better.