"He was in the world, and the world was made through Him, and the world did not know Him.  He came to His own, and His own did not receive Him.  But as many as received Him, to them He gave the right to become children of God, to those who believe in His name:  who were born, not of blood, nor of the will of the flesh, nor of the will of man, but of God.  And the Word became flesh and dwelt among us, and we beheld His glory, the glory as of the only begotten of the Father, full of grace and truth."
                                                                                                                                                 John 1:10-14

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So far our managerial accounting case study has covered these three important issues at Jorgensen Land & Cattle, Ideal, S.D.:

•  Structure and management goals
•  Cost centers
•  Crop production projects

In this installment we'll look at how controller Daryl Ellis uses the FBS e.CLIPSE module to move costs from crop production projects to crop marketing, storage and processing projects.

Profit Center, Cost Center or Bin of Worms?
In cropping operations with 100% cash sales, the marketing segment is clearly a profit center, which GAAP guidlines suggests storage and processing costs not be inventoried.  However, at Jorgensen Land & Cattle 70-80% of crop inventories are consumed by livestock.  That makes the marketing, storage and processing segment look more like a cost center, requiring storage and processing costs to be inventoried until the crop is fed.  Because crop inventories can often contain a mix of raised and purchased crops that may be fed, planted or sold, Ellis describes his marketing segment as a "big bin of worms."

Marketing Center and Project Setup.
Ellis recommends defining permanent marketing centers by commodity, except when units vary (such as dry corn measured in bushels and high moisture corn measured in tons).

Unlike marketing centers, Ellis prefers defining marketing projects for each crop marketing year, which allows accurate matching of hedge positions.  (FBS also advises this approach for a cleaner tie-out of inventories).  Like production projects, marketing projects contain crop share definitions; in this case, determining whether the landlord's share of a crop inventory will be tracked within the system.

Transferring Costs from Production to Marketing Segments.
Recording harvest records in Crop Audit triggers automatic journal entries in TransAction Plus.

Behind the scenes these entries are made by the system.

•  A journal entry pushing production project (work in process) costs to marketing project
    (finished goods) inventories.
•  The landlord's share of inventories not stored on the farm is "backed out."
•  Balance sheet inventories and cost adjustments are updated with each harvest, purchase or sale.

After field-testing e.CLIPSE for more than two years, Ellis offers this advice:
"Keep it simple but flexible enough so you can push things when they need to be pushed."
Next month we will examine how Jorgensen Land & Cattle has developed and is using livestock production projects.

CROPSHOP TRAINING

If you'd like to learning more about applying e.CLIPSE managerial accounting to your cropping operation, then you won't want to miss CROPSHOP training this winter.  Let us know by Dec. 31, '02 if you'd support a CROPSHOP in your area or would attend a session on Tuesday, February 11 in Louisville, Ky. (one day prior to the National Farm Machinery Show).  Contact Norm Brown at 800-437-7638  ext. 101 or norm@fbssystems.com.

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By now, you've received your TiMEsavr upgrade CD for 2003 containing all our major Windows (7.4) and DOS (6.52) modules.  We urge you to install this upgrade as soon as possible because:

•    It's our most reliable and up-to-date version.
•    Any new programming changes distributed via disk, download or e-mail will be based on the 7.4 "platform."
•    You'll avoid the January 1st support rush.

Once you've installed the software from the CD, we encourage you to check the 7.4 Updates section of our Web site regularly for the latest improvements and bug fixes.  This site is updated every Monday.  The complete list of 7.4's key changes is also on the FBS Web site.
If you're on the Basic Support Plan, you can convert to Priority Support at a cost representing substantial savings over a full-year Priority subscription–plus …

•   You'll receive unlimited free 800 support through June 30, '03.  (Your free Basic phone support covers only
     30 days from shipping date, then switches to $1.00/minute with a $15.00 minimum for calls over 5 minutes.)
•   Your response time will be cut in half (8 business hours maximum vs.16).
•   You'll have access to evening and Saturday service through Mar., '03.

This offer is good only through Dec. 31, '02.  To activate the red-and-white coupon, which accompanied your upgrade CD, or to get more information, call 800.437.7638, ext.103.  But time's burning low!  Make that call today.

IT'S THAT 'SPECIALS' TIME OF YEAR, FOLKS. AND WITH SAVINGS THIS BIG ON MULTIPLE-MODULE BUYS, THE WORD ISN'T INTEGRATE – IT'S INTEGREATLY!

For a limited time—choose from two outstanding offers, each dispelling notions of price being a barrier to investing in ag's leading integrated management information system.

SPECIAL NO. 1: Buy one program, get a second at HALF PRICE; buy two, get a third program FREE!  Save up to $1,200.  Earn 60 days of free support.   Buy any FBS program listed on our offer page and you can get a second one of equal or lesser value at 50% OFF.  Or, buy two programs and you'll get a third one of equal or lesser value absolutely FREE.  A great opportunity to get started with your integrated MIS!

SPECIAL NO. 2: Buy the complete e.CLIPSE management information system. Save $1,390.  Get a FREE Compaq iPAQ Pocket PC.  Two days of on-site training are included in the package. (Free SST Stratus software is also included with crops version.)  This is our first special on e.CLIPSE and one that hands you a turnkey integrated MIS at unprecedented savings.
    For full particulars on both specials, including details on individual programs, features and benefits, call 800.437.7638 ext 101 or 103.  Since these are time-limited offers, don't wait until it is too late!

Have you checked your Client Appreciation Program (CAP) credit lately?  If you've been on the TiMEsaver Service Agreement for three years, paid each invoice by June 30 and haven't redeemed any of your CAP credit, you've accumulated the maximum 40% discount toward the purchase of any FBS program.  Amount of credit is determined by the number of years spent on TiMEsavr and accordingly would currently be 10, 20, 30 or 40%. If you don't know your actual TiMEsavr credit/discount, contact your FBS sales representative at 800.437.7638 or sales@fbssystems.com.  By combining this opportunity with Special Offer No.1 (above), you could add another module for extra savings up to $798!  So set your CAP for maximum savings. But here again, time is vital!  Contact us today.

2002 tax forms and 2003 tax tables – The 2002 payroll tax forms and 2003 tax tables will be shipped with the Payroll 7.0 (Windows) upgrade in December, 2002, and not with the FBS 7.4 (Windows) upgrade mailed in October, November and December.  If you are on a current support plan, the updates will be mailed to you before the end of 2002.  You should test the printing of your forms through your current taxforms software at this time and order your tax forms through your favorite supplier.  Please refer to your payroll manual, Chapter 12 (Tax Forms), and the Introduction/Frequently Asked Questions section for information on printing and printers.
    DOS 9.0 Payroll 2003 taxtables will be emailed before the end of the year or shipped on diskette upon request.
    Network Payroll Users – The integration between Payroll and TransAction Plus on networks has been enabled on the FBS 7.4 upgrade. You will no longer need to edit the location and file name when you post to the general ledger. Instructions are included with the upgrades.  If you have any questions, please call the FBS support line (800.437.7638, ext. 2) or e-mail support@fbssystems.com.
    941 Filers – The FBS 7.4 upgrade includes an update to the payroll taxform software to print the 2002 941 Form.

Last year's drawing for this $599 top-of-the-industry item from Compaq spurred such interest that we've decided to do it again.  All you do to qualify is fill out a brief form you'll find at the FBS Web site.  Takes you about a minute and a half.  No purchase is required.  The drawing will be done on computer at 4:00 p.m. (CST), Mon., Mar. 3^rd, 2003.  The winner will be notified immediately.  Registrations will be accepted through 12:00 p.m., Mar. 3^rd.
    Don't miss this opportunity to earn a premier prize for a pittance of information.  Visit our Web site to register now!

SOFTWARE Q&A – WITH Q'S FROM YOU, OUR CLIENTS!

Since last month's question is especially relevant to a broad audience in the waning weeks of '02, we thought it should be repeated.

Q.

What year-end procedures do I need to do?

a.

There are several reports you should check at year's end (or any time for that matter).  Remember you can do "drill-downs" and edit entries from the report screen. 1.  Be sure your check conciliation report agrees with your latest bank statement. 2.  Run a user-defined report for undefined entries (check the box in the upper right of the      report parameter screen).  Thereport should be blank. 3.  Be sure your balance sheet "balances." 4.  Run a ledger account detail report recapped by centers.  Be sure all the centers that recap      are in that ledger account. 5.  If you have Accounts Payable and/or Accounts Receivable modules, compare the AP      and/or AR detail report with the total in that Accounts Payable or Accounts Receivable      ledger accounts.  You may have entries other than AP and AR entries in those accounts,      so they may not match. 6.  Run a detail ledger account report.  I recommend setting up a report "macro" for each      type of ledger account (standard, money borrowed, livestock,      capital livestock purchases, capital purchases, hired labor, and crop purchase/sale ledger      accounts).  Select the ledger accounts for each type, move columns around, and select the      proper columns to print for each type.  Remember you only have to do this once if you      save them as report macros.  It will make a nicer-looking detail ledger report. Other procedures to do include: 1.  If you use the Payroll module and pay taxes on a cash basis, on December 31 you need      to make a reversing entry to "back out" the accrual posting for payroll taxes expensed and      accrued to employer's FICA, Medicare, FUTA, SUTA and any employer contributions      made to a pension or cafeteria plan.  A "reversing journal entry" means that when you      rollover to the new year, the entry will reverse itself. 2.  You can start a new accounting file at any time and "re-rollover" ending/beginning      balances as often as needed. 3.  If your fiscal year begins January 1, you need to run a net income statement for the current      year (2002) and post an adjustment entry to retained earnings on January 1, 2003, for the      amount of 2002 net income. – Cheryl Brown, Support Technician Call in your questions (800.437.7638) or e-mail them to support@fbssystems.com.

•  In the NEWS!

Dale Profit and his brother, Charles, of Van Wert, Ohio, report success with their automatic guidance system to the extent that it "makes farming much less tiring and planting corn much more precise."  Charles penned their experiences in a Nov., '02, Top Producer story, "How automatic guidance can pay."  The system, consisting of a Trimble Autopilot, a base station equipped with a Global Positioning System (GPS) antenna, a receiver and radio, and a "wired" John Deere 8300 tractor, was used in the planting of 1,000 acres of popcorn and 200 acres of soybeans.

    FBS Top ManAGer Scott Tapper, Webster City, Iowa, and six other producer leaders from the Iowa Pork Producers Association recently returned from Brazil, where they participated in an intensive study of Brazilian agriculture, especially its pork industry.  The delegation visited pork production and cropping operations and met with officials of a Brazilian joint pork venture and a soybean cooperative.  Their experiences are chronicled the IPPA's official publication..