MANAGERIAL ACCOUNTING RECEIVES NATIONAL COVERAGE

At the risk of mixing metaphors, we think John Otte's Farm Futures article, "Drill deeper for management information" really "nailed" the possibilities from managerial accounting.  As of press time, the November-December issue of FF had not yet been posted on their website.  When it is, you can read it by clicking on http://www.farmfutures.com.

Speaking of "drilling down," here's a new schematic that helps depict the relationship of various levels of farm management information.

	•	Accrual Accounting, the highest level of analysis, reports the true financial position and profitability of the whole business.
	•	Cash Accounting, adjusts accrued expenses and revenues to the date cash is exchanged in order to produce cash-basis tax reports and monitor cash flow budgets.
	•	Managerial Accounting, analyzes the performance of internal cost and profit centers within a business and can be used to value inventories used by Accrual Accounting.
	•	Inventories, of raw materials (seed, chemicals, fertilizer, feed), work in process (growing crops and animals) and finished goods (harvested crops) are essential for valuing financial statements as well as production and marketing control.
	•	Budgeting, uses production and financial assumptions and monitors itself against actual production, inventories and accounting performance.
	•	Field or animal production records, provide the basis for timely and accurate inventory, managerial and accrual accounting records.

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Admittedly we're partial to double-entry managerial accounting and have encouraged the adoption of GAAP (Generally Accepted Accounting Principles) by agriculture for nearly twenty years.  (See the articles on "Old World" vs. "New World" financial reporting in the December 2003 through July 2004 issures of e.farmsmart.)

December 2003	April 2004
January 2004	May 2004
February 2004	June 2004
March 2004	July 2004

For the past two years we've told AFRA (Agricultural Financial Reporting and Analysis) users how they can move from a loose "bridge" between cash accounting and their user-supplied data to true financial statements generated directly through the TransAction Plus general ledger.

Yet there are plenty of producers (and lenders) who don't care about the finer points of GAAP but still need to "kick out" traditional market-value "net worth" statements from FBS.  So at the risk of disregarding 500 years of accounting practice and alienating our good friends in the accounting profession, here are specific shortcuts for the folks who prefer wearing ball caps rather than green eyeshades.

Warning/disclaimer!  Do not attempt this if your accountant expects you (or you ever intend) to maintain double entry books.

Prerequisites:

1.	Bank account balances are correct
2.	Loans recorded as liability accounts
3.	No equity account balances
4.	No Net Income account
5.	Asset accounts setup for inventory categories you wish to track

Recording process.  If the prerequisites above have been met then the only extra information you need to add are inventories (crops, inputs, investment in growing crops, etc.) and fixed assets (land, equipment and buildings).

1.	Record Adjustment entry
2.	Report type:  4=Market Value
3.	Enter the net value / quantity change from the last financial statement
4.	Record a unique Center and Description if you wish
5.	For prepaid expenses, record a Market Value Journal entry, entering a positive value (debit) to the prepaid asset account and a negative value (credit) to the original expense account (i.e. Seed Expense).

Balance Sheet reporting process

1.	Columns to include:  Two Column or Cash/Accrual/Mngt/Market
2.	Report type:  Market Value
3.	Check:  Include Net Change line	Suggested Balance Sheet Report Parameters
4.	To view the "supporting schedules" for asset or liability lines, right-mouse-click on the line.  Details will be itemized by center.

Income Statement reporting process

1.	Report type:  Market Value
2.	Note:  Unlike AFRA, the income statement and balance sheet will not "tie out" or coordinate with each other under this "single entry" methodology so there is no cross-check for errors and omissions.

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Here's a great suggestion for a mid-winter getaway that will relax and inform in a beautiful setting:  the annual Missouri Farm Computer Users Conference and Trade Show, January 6 and 7, 2006, at Tan-Tar-A Resort, Osage Beach, Missouri.  This year the program has expanded to welcome ag computer users from around the nation, and FBS will be hosting a break-out session for our users.  For more information, click on:  http://agebb.missouri.edu/cotf/

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25 YEARS AGO / 25% OFF TRIVIA QUIZ

Congratulations to Mary Lynn Griffin, Brimson, Missouri for correctly identifying a Radio Shack TRS-80 Model III (48K and 2-5 ¼' floppy drives) in the "Secretary of Agriculture" ad and the missing object:  a cup of coffee.  (Farm computer ads invariably included a steaming "Cup o' Joe" as a prop in that era–almost as common as today's advertising image of two guys (one of them unfortunately a salesman) staring intensely at a laptop out in the middle of a field.)  Anyway, Mary Lynn will receive 25% off the FBS program of her choosing, plus a USB mug warmer to power her coffee.

Now let's step even further back into the mists of time.  Here's an even earlier advertising mascot.  Again, we'll offer 25% an FBS module of your choice and a USB coffee mug warmer to the first reader who can name this guy (hint:  this newsletter originally included his name) plus identify the computer model in which he resided and the size and type of media in which software and data were stored.

Send your answers to norm@fbssystems.com.  We'll announce the correct answer and winner and introduce a new 25-year-trivia question next month.

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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. Should I wait until I have closed my books for the current year before installing my upgrade? a. Please install the upgrade as soon as possible.  There is not a data conversion.  You'll avoid the January 1st support rush, and it is the only way to receive mid-release updates. Before installing: 1.   Verify the location of your program files.  Right click on the FBS icon on your desktop.  Left click on properties.  Make note of the Start In directory and click on OK or Cancel.  The Start In directory will be your installation path.  The installation program defaults to C:\FBSWIN.  If your Start In directory is not C:\FBSWIN then you will have to change the installation path to match your Start In directory.  There is a Browse button available during the installation so you can change your installation path from a directory tree.  Network users take note.  The program files must be installed directly on the server and only the common files (.dlls) should be installed on the work stations. 2.   Verify the programs to install.  Start up your current (7.6) version.  Go to Utilities | Reset Boot Count.  Any programs with Live in the version column should be installed.  (This will not work for networks.)  You can also refer to your upgrade invoice. To Install: 1.   Insert the 7.7 CD.  It should load automatically.  If it doesn't, from the desktop, click the Start button, then click Run.  Type d:\setup and click OK.   (Where d: is your CD drive). 2.   Follow the instructions. 3.   Start the program by double clicking on the FBS icon. The first Version 7.7 change you'll notice (besides the new background picture) is an automatic update message that will pop up the first time you start FBS.  Please complete the registration form when prompted (you'll only have to do this once) so you'll be set to receive your updates.  If you aren't prompted for the registration form click on the Edit Company button on the right before checking for updates the first time.  You can edit the time period between days to check for updates (every 7 days, 30 days, etc.). You'll be prompted again before each update starts.  If you're on a network, make sure that everyone's logged out of FBS before you begin.  You can also manually update by going to Utilities | Check for Updates.  Do not attempt to download updates manually from our website after installing 7.7!  The web site only has the 7.6 version updates.  If you install those updates you will have a crossed version system.  This new feature of version 7.7 was designed to eliminate that possibility as you no longer need to navigate our web site to get your updates.

Call in your questions (800.437.7638) or e-mail them to support@fbssystems.com.