ESCAPE FROM WINTER MISERY IN MISSOURI
Had enough of winter
already? Looking for a quick, economical getaway in a world-class
resort?
What if you could attend a computing refresher course the
same time you're being refreshed?
Then join us at the annual Missouri
Farm Computer Users Conference and Trade Show, January 5 and 6, 2007,
at Tan-Tar-A Resort, Osage Beach, Missouri. This year's action-packed
program includes the following topics:
| • |
Real-time
breakeven analysis for my marketing situation (using the Farm
SeRVey
dashboard). |
| • |
Life Cycle Budgeting - discerning long-term business affects of today's decisions. |
| • |
Using Turbo Tax - for our angus operation and home. |
| • |
Horizon Point - precision weather forecasts and models for farm management. |
| • |
Choosing the right computer application for different problems on the farm. |
| • |
Using CattleWorks for cattle management. |
| • |
Why have a web page for my farm? |
| • |
Online GIS tools - presentations and hands-on sessions. |
| • |
Wireless networking. |
| • |
Spreadsheet use for farm business. |
| • |
Software for tracking grazing paddock productivity. |
| • |
Precision Ag - Some practical experiences and what new tools and issues are on the scene. |
| • |
Using a "pen-based" laptop on the farm. |
| • |
Developing "buy on-line" websites - our experiences from hay spears to potracks. |
| • |
Tax Update. |
| • |
Using MapCalc to take yield maps to variable rate prescriptions. |
| • |
Email etiquette for business and personal use. |
| • |
What computer components to buy today. |
| • |
Security issues discussions. |
| • |
Tracking Sales with a Spreadsheet (Fruit Sales Example). |
| • |
Weather tools to use for your farm. |
| • |
Virtual PC - a new tool from Microsoft. |
| • |
How we use notebook computers in our school. |
| • |
"Show and tell" - bring your digital cameras, laptops, storage devices, etc. Share what is working (or not working!) for you. |
There'll even be a
break-out session for FBS users. Register now at; http://agebb.missouri.edu/cotf/details.htm.
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CROP$HOP.07: WHERE
ACRES, BUSHELS AND DOLLARS INTERSECT
Only one seminar drills
down to the "financial truth" behind real-world crop production and marketing
practices, CROP$HOP. This year we'll be looking at case
studies and past, present and future cost analysis.
| • |
In
the Past Costs section we'll release our second round of
support operations benchmarks (including planting, spraying
and harvesting operations). |
| • |
In
the Present Costs section you'll see how to go beyond the
Farm Financial Standards Council by incorporating value of
unsold inventory into a crop year cost analysis. |
| • |
In
the Future Costs class, Dr. Howard Doster will help
us understand and utilize a new "perpetual" crop/financial
modeling/budgeting tool*, which will be provided free to all
attendees (a $595.00 value). *Requires TransAction, Crop Audit and Smart Feeder 7.8 |
In addition you'll
have the opportunity to experience the following new technologies:
| • |
The
latest generation of hosted software services |
| • |
Real-time
dashboard technology to connect and monitor every phase
of your operation |
| • |
New data entry/retrieval applications for digital paper/pen, PDAs and scanners |
Conveniently scheduled
on the day prior to the massive National Farm Machinery Show in
Louisville, Kentucky, CROP$HOP always offers Big Management
Ideas to guide your shopping for Big Iron.
CROP$HOP returns to the Louisville Southwest Holiday Inn,
4110 Dixie Highway, which is holding a block of sleeping rooms under the
FBS name at a reduced rate. Hotel rooms for show week are disappearing
quickly, so we encourage you to call the Holliday Inn at 502-448-2020,
Ext. 109, NOW to make your reservation.
The final agenda will be posted on our website in early January. CANCELED!
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CHECK THE TRADE SHOW CALENDAR
We hope
to see you at one or more of the six trade shows we'll be attending this
winter. Click here to view
our show calendar.
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WHOLE FARM PLANNING
III
(The following
is a reprint of a FarmSmart article published in 1988.)
Step Three: The Total Farm Budget
The job of the Total Farm Budget is to "spread" the receipts and expenses
from the enterprise (responsibility center) budgets across a twelve month
period and to incorporate non-farm receipts and expenses, capital investments
and financing into the plan.
The Calendarization Process
This operation converts data from the annual enterprise budgets into a monthly total farm budget. With a computer, calendarization can be a simple procedure, provided that dates are recorded with each of these budgeting components:
| • |
Fixed costs |
| • |
Payables and receivable from the prior year |
| • |
Principal payments on prior year's operating debt |
| • |
Principal payments on long term debt |
| • |
Purchases and sales of crops, livestock, feed and materials |
| • |
Other variable costs |
| • |
Nonfarm and family living receipts and expenses |
Computers can be programmed to examine each entry and determine to which category (row) and month (column) it should be assigned on the total farm cash flow spreadsheet. A typical cash flow spreadsheet is composed of 13 or 14 columns (12 months + total for the year + total for last year) and one row for each receipt and expense category. In addition, most cash flows include lines for monitoring bank balances, capital investments and financing.
Non-farm, Capital Investment and Financing Plans
This portion of the Whole Farm Plan deals with these areas:
| Non-farm |
| • |
Outside wages and investments |
| • |
Family living withdrawals |
| Capital Investments |
| • |
Savings accounts and other investments |
| • |
Hedging account deposits and withdrawals |
| • |
Purchases and sales of land, buildings and machinery |
| Financing |
| • |
New operating notes |
| • |
CCC loans |
| • |
Financing for new capital investments |
Capital investment and financing plans are often closely related. To incorporate these projections into the total farm budget, follow these procedures:
| 1. |
Plug
projected hedging account deposits (margin calls to your broker)
into the months that you anticipate the heaviest hedging activity. |
| 2. |
In
the months that you plan to close out futures contracts, enter
anticipated hedging account withdrawals (money coming back
to you from your broker). For many of you, this
has never happened!
|
Keep in mind that hedging account deposits and withdrawals are simply transfers of funds between accounts. They do not necessarily indicate a profit or loss in the market.
|
| 3. |
Enter
projected purchases or sales of capital items (land, buildings
or machinery) into the appropriate rows and columns of the cash
flow spreadsheet. Normally, this information is first compiled
into a separate, itemized capital purchase plan and then transferred
electronically to total farm budget. |
| 4. |
Plug
in non-farm receipts and expenses, including family living
withdrawals. |
| 5. |
Now
recalculate the spreadsheet and examine the projected ending
cash balance for each month. |
| 6. |
If
that balance is negative for any month, you must do one of
the following: |
|
• |
Transfer money from savings, (if available). |
|
• |
Postpone capital purchases. |
|
• |
Postpone non-farm withdrawals. |
|
• |
Finance the capital purchases |
|
• |
Borrow operating funds |
Some systems like AFRA use a "minimum balance calculator" that will automatically maintain a predetermined amount of money in the bank by automatically borrowing and repaying operating notes to cover negative cash positions.
|
| 7. |
If
the projected ending bank balance for any month is positive,
you have the option of doing any of the following: |
|
• |
Repay operating notes |
|
• |
Transfer money to savings accounts or other investments |
|
• |
Make new capital purchases |
|
• |
Make withdrawals for family living |
| 8. |
Repeat
steps 4-7 until you are satisfied with the results. Pay particular
attention that old debt is properly serviced and that you're not
depending on new operating loans as the primary source for operating
capital. |
Summary
We have now covered the first three phases of Whole Farm Planning:
| • |
Known Facts |
| • |
Enterprise Budgets |
| • |
The Total Farm Budget |
At first glance, the total farm budget produced through Whole Farm Planning will resemble any other cash flow spreadsheet. Your neighbors (and possibly even your banker) may not be able to appreciate the work and care you've put into your plan. But they'll never experience the satisfaction you'll feel from knowing with confidence where you're going and how you're going to get there.
Next issue we will cover the final (and most important) phases of Whole Farm Planning.
NOTE: Some of the procedures outlined in this article may be completed
in a different order or combined with other functions in some computer
programs.
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|
SOFTWARE
Q&A – WITH Q'S FROM YOU, OUR CLIENTS!
Send
us your questions/problems–be they short, long, simple or downright
frustratin'!–about SeRVware
and we'll handle them right "on the air" for the benefit of all.
|
Q.
|
What year-end procedures do I need to do? |
| A.
|
Here
are the accounting reports you should check at the end of
each accounting period (and especially at year-end).
| Tip: |
You can "drill-down" and edit entries from any report screen. |
| 1. |
Be
sure your Check Reconciliation Report agrees
with your latest bank statement. |
| 2. |
Run
a User-Defined Report for undefined entries (check
the undefined box in the upper right of the report parameter
screen). The report should be blank. Edit
any entries that appear. |
| 3. |
Be
sure your Trial Balance and Balance Sheet
"balance." |
| 4. |
Run
a Ledger Account Detail Report recapped by centers.
Be sure all the centers in the recap have been coded
to the appropriate ledger account. |
| 5. |
If
you have Accounts Payable and/or Accounts
Receivable modules, compare the A/P and/or
A/R Detail Report with the total in the Accounts
Payable and/or Accounts Receivable ledger accounts. |
| Tip: |
Use separate ledger accounts for any A/P and A/R entries that are not entered through the A/P or A/R modules. |
| 6. |
Run
a Ledger Detail Report for all accounts. |
| Tip: |
Set up and store 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) by moving columns in the desired order. |
| 7. |
If
you use the Payroll module and pay taxes on a cash basis,
on December 31 you need to make a Reversing Journal
Entry to "back out" the accrual posting of payroll taxes
expensed and accrued to employer's FICA, Medicare, FUTA,
SUTA and made to a pension or cafeteria plan that are
not yet paid. (Just check the Reversing
Entry box when you roll over to the new year.) On
the first day of the new year the entry will reverse
itself. |
| 8. |
You
can begin the new accounting year any time by going
to File / Change Company and selecting the new
year. Ending balances from asset, liability
and owner equity accounts are automatically "rolled"
into "Beginning Balance" entries in the new year. Once
you have closed the current year, go to Utilities
/ Create Beginning Balance to "re-roll" balances. |
| 9. |
Calculate
Retained Earnings. |
|
a. |
If
you haven't done so already, go to Setup / Accounting
/ General Information and select the retained earnings
account. |
|
b. |
After
you have rolled balances into the new year (Step 8)
go to Input / General and under Accounting
Input and double left click on Calculate Retained
Earnings. Confirm the Retained Earnings
Account and choose the first month of your fiscal year. Then
click on Calculate. |
|
|
Q.
|
When can I expect to receive my new payroll tax tables for 2007? |
| A.
|
You
can get them immediately as long as you have access to the
Internet. In the Payroll system, click the Download/Review
Tax Table button, click Download Tax Tables, verify
that the "Review Current Tax Information for" year is 2007,
and then click OK to get a copy of the tax tables.
This selection will copy the tax tables and automatically
install them in your Payroll system.
| • |
All
of the State and Federal taxes are updated when you
do the tax download, except for your State Unemployment
Rate. This rate needs to be entered as soon as
you receive it from your State Unemployment Agency.
Go to Payroll/Setup/Taxes and double-click
the SUTA tax to change the rate. |
| • |
You can run a January payroll before you have the 2007 tax tables. You need to start using your 2007 tax tables "as soon as possible," but you certainly can run your first payroll using the 2006 tax tables; the amount withheld is just an estimated amount for federal and most state withholding. |
|
|
Q.
|
Do I need to order W-2 forms or can I print them on plain paper? |
| A.
|
You are able to print all of your W-2 copies on plain paper; you no longer need to print any on preprinted forms. Even the Social Security Copy A (often called the "red copy" can be printed on pain paper.
|
|
Q.
|
Do I need to print W-2 forms before I close the 2006 year and print January checks? |
| A.
|
No,
you can print your 2006 W-2 forms at any time. Go
ahead and close your year and print your January checks before
printing your W-2 forms. When you are ready to
print the W-2 forms you can select Payroll/End of Period/Change
Tax Year and switch back to your 2006 year. Once
you are finished printing your W-2 forms, use the Change
Tax Year selection to switch back to your 2007 year. Do
not go through another year-end close.
|
|
Call in your questions (800.437.7638) or e-mail them to support@fbssystems.com.
|
|
