HONE IN ON CROP$HOP.07:  THE SEMINAR 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 who register by Friday, February 9th (a $595.00 value).
Register for CROP$HOP.07 by Friday, February 9th and receive a free Beta copy of Life Cycle Budget.

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.

CANCELED!

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The February 2007 issue of Successful Farming encourages readers to adopt the managerial accounting practices defined by the Farm Financial Standards Council.  Business Editor Dan Looker shares his experience at the FFSC Annual Meeting in "Good Accounting,"

Click here for that article.

For more background on managerial accounting see the Successful Farming story, "Using Accounting to Manage Change."

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(The following is a reprint of a FarmSmart article published in 1988.)

The Payoff from Whole Farm Planning

"The best laid plans of mice and men…"

By now, that budget that you constructed so painstakingly back in December has been rendered null and void by the unprecedented trends in weather, markets and government policy.  But don't give up and throw that plan (and your computer) out the window.  In fact, if you're not constantly monitoring and refining that original plan, you'll miss out on one of the big rewards of computerized records.

In the first two installments in this series, we covered the planning function of management.  The end results were enterprise budgets and a projected cash flow statement.  While these are valuable documents in themselves, a good manager (can and should) go much, much further.

Whole Farm Planning also incorporates procedures for:

•	Analysis
•	Accounting
•	Control

Step Four: Analysis

The planning process produces the raw information needed to prepare projected financial statements and perform business analysis.  These reports are normally compiled in the following order:

Ending Inventories

As you recall, ending inventories for crops, feed and livestock were calculated back in the enterprise budgets.  Projected changes in asset and loan balances, as well as new capital investments, are available from the total farm budget.  These figures must now be summarized and moved to either the projected balance sheet or the depreciation schedule.

Projected Depreciation Schedule

This process is necessary to accurately convert planned changes in capital assets into:

•	Balance sheet inventories
•	Income statement depreciation expense
•	"Tie out" capital purchases and sales with financial statements

Many asset depreciation programs will project depreciation expense and asset book and market values over a 1-5 year planning horizon.  In most cases, you'll probably enter projected capital purchases and sales onto the depreciation schedule at the start of the planning period, then edit or delete these entries as the actual transactions occur.

Projected Balance Sheet

From the ending inventories and depreciation schedule, you now have all the information needed to complete a projected (pro forma) balance sheet.  The only data not provided directly from the other planning components are projected accounts receivable and payable, farm supplies and investments in growing crops.  Once these components are incorporated, you'll have a petty good idea of what your business will be worth at the end of the year.

Projected Income Statement

Calculating projected cash basis Schedule F income is even easier.  All you need are cash receipts and expenses from the total farm budget and depreciation expense from the depreciation schedule.

Other Analysis

After the completion of a projected balance sheet and a projected income statement, the following information can be generated:

•	Financial Ratios
•	Profitability Statements
•	Productivity Analysis

Next Year's Projections

You now have enough "known facts" to construct a Whole Farm Plan for next year.  (See flow chart)

In the final installment of Whole Farm Planning we'll look at the accounting and control functions.

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You'll be hearing a lot about Microsoft's new Vista™ operating system in the next few days.  While it offers dazzling "eye appeal," we caution you to look before you leap. Here's why:

•	While definitely "cool," Vista™ may not be compatible with many of your current applications.  At the very least you'll need to purchase upgrades, and in some cases (such as DOS programs), you'll find yourself at the "end of the line."
•	Don't expect that Vista™ will run (or even install) on your current pc unless it has a dual-core processor and at least one gigabyte of RAM memory.  You'll find buying a new pc with Vista preinstalled a much more economical and painless alternative.
•	In fact, if you're in the market for a new machine you may still find XP™ computers at reduced prices (and sometimes with coupons for Vista™ upgrades).
•	Vista™ comes in 5 different "flavors."  You'll need to research the pros and cons of each alternative.
•	According to PC Magazine, "Vista™ offers a lot of improvements over Windows XP™, but most of them are conveniences rather than essentials."
•	FBS will not certify Vista™-compatibility for our software until we complete a testing process later this year.

Read a review of Vista in PC Magazine:

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