CROPSHOP.2004 RECAP
"Definitely worth
the time and money. I learned a lot of valuable info."
Marcie Mayall
Monroe City, Indiana
Our hearty thanks go out to all who participated
in CROPSHOP.2004
earlier this month. Growers from around the Midwest and Mid-South met
in Louisville, Kentucky to sharpen their skills and trade management ideas. They explored brand-new precision farming technology, learned how manufacturing
accounting principles and strategies apply to production agriculture and
shared what they've learning so far on their quest for production and
financial excellence.
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| Growers
Bernard Peterson and Rick Roach share their goals and results
from adopting managerial accounting. |
While
Dr. Howard Doster envisions a perpetual budget that can be updated
in a snap. |
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OLD WORLD-NEW WORLD FINANCIAL REPORTING–DO YOU REPORT OR MANAGE BY ACCRUAL?
Over the past two issues we've contrasted the ways farmers produce financial statements and the conflicting goals of maintaining simultaneous cash and accrual records.
The conflict is created by these realities:
| • |
Because
the IRS allows it, most farmers file cash-basis tax returns. |
| • |
As a result,
the cash-basis 1040 Schedule F intentionally distorts true farm
earnings. |
| • |
Few farmers
have the training or incentive to prepare accrual financial statements. |
Therefore an "adjusted accrual" system (Coordinated Financial Statements) was developed by Tom Frey and Danny Klinefelter at the University of Illinois in the late 70s. Further refined and re-dubbed "Agricultural Financial Reporting and Analysis" (AFRA), this methodology is the heart of the process adopted by the Farm Financial Standards Council.
This adjusted accrual model relies on a cash-basis accounting system throughout the year, then converts those records to a modified accrual basis for year-end analysis through comparing changes in inventories and "reconstructing" payables and receivables.
Over its 25 year history, the adjusted accrual system has played a critical role in advancing the financial capabilities of farmers (and lenders) as well as helping them survive and thrive. However, many FBS users are outgrowing its limited scope and flexibility. You may have reached this point if you find yourself in one or more of these situations:
| • |
You're trying
to track perpetual raw material (seed, chemicals, fertilizer,
feed) inventories that turn over several times a year. |
| • |
You need
to produce accrual financial statements more than once a year. |
| • |
You're working
with an accounting firm to produce those financial statements. |
| • |
Your operation
includes multiple accounting entities. |
| • |
You need
to cost account products and departments within your operation. |
| • |
You're already
running transactions through accounts payable and/or accounts
receivable. |
These factors indicate that you're ready for a major paradigm shift in
your business operations. Instead of trying to manage by
cash and report by accrual, you need to manage by accrual
and report by cash. Here are the benefits:
| • |
Your inventories will always be in sync with your accounting transactions. |
| • |
You'll be able to produce accrual financial statements with very little manual manipulations. |
| • |
Cost accounting will not only reconcile with financial statements, but will actually produce them for you. |
| • |
Your accountant will understand the process and audit trail. |
| • |
Through an automatic process of "backing out" accounts payable/receivable entries and segregating accruals from cash entries, you'll be able to produce cash/tax reports at the press of a button. |
Most of you, though, will need help and encouragement in making this transition. We will present more about that topic next month.
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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 HP
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. Since
these are time-limited offers, don't wait until it is too late!
Free
iPAQ PC and big dollar savings too!
|
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.
|
My balance sheet is out of balance. How do I find the error(s)?
|
| a.
|
| 1. |
First
run a User Defined Report for "undefined" (and out
of balance) entries. Go to Reports,
General, User Defined Report. Check
the box in the upper right hand corner of the User
Defined Report Parameters screen and use the date
range of the entire year. This report
should be blank. Edit any entries that appear on
the report by right clicking on the entry to edit
the field that is "undefined" or to balance the
entry. Then Refresh the Balance
Sheet Report. |
| 2. |
Check
to see that last year's net income has been posted
to retained earnings for the first day of your new
fiscal year by running a Trial Balance Report using
the first day of your fiscal year as the beginning
and ending dates. Is there an entry to
retained earnings for the amount of the previous
year's net income in the period column? The
net change of the beginning column and the period
column should be the amount posted to retained earnings
with opposite signs. The ending column
net change should be 0. For more information
on calculating retained earnings, click
here. |
| 3. |
Repeat
the Trial Balance Report by each quarter/year date
range and Use date cash exchanged option 1 (entries
in time period) and Report type option 1 (Cash/Tax
Report) to narrow down the date range in which the
trial balance is off. The Trial Balance Report should
have 0's in the Net Change line across the bottom
of the report. Repeat the report by the month, week,
and day range until you have narrowed down to the
day the trial balance is off. Usually you will find
the amount you are off in the period column. You
can right click on the amount in the period column
to show the entries that make up that amount and
then right click again to drill down to an original
entry. The entry can then be edited and the report
refreshed to see if other changes still need to
be made. |
Call in your questions (800.437.7638) or e-mail them
to support@fbssystems.com.
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CLIENT'S CORNER
Welcome!
New clients Allen and Joyce Schardt, Carleton,
Nebraska,
Kevin and Walter Kelley, Brookston, Indiana,
Josh High, Dowagiac, Michigan.
In
the NEWS!
Art
Lehmann, Strawn, Illinois was recently elected president of
the Illinois Pork Producers Association. Another
Illinois pork producer, Roger Walk, Neoga, also serves
as chairman of Meadowbrook Farms Cooperative, which just
opened a state-of-the-art pork processing facility in Rantoul,
IL.
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|
sales@fbssystems.com
800.437.7638
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