UNLOCKING THE HIDDEN POTENTIAL OF YOUR SOFTWARE

(Excerpts from the 2006 FBS User Conference.)

Part I: Discover What You Already Have

1.  Keep current and clean house!

In the rapidly-changing world of software, laggards and packrats are truly living "on the edge."  If your software is not kept up-to-date, you'll not only miss out on new features but also end up battling preventable bugs.  On top of that, software of undetermined vintage is nearly impossible to support.  The solution:  you can instantly verify and update your software over the Internet (Utilities | Check for Updates).  (For best performance set the update interval for 7 days.)  Before placing a support call, make sure you are running the most current version.

An even more dangerous habit, though, is the practice of hanging on to CDs (and even diskettes) containing prior versions of our software.  Problems emerge when a new computer is added or software is reinstalled after a disk crashes leading to a well-meaning computer tech installing an out-of-date CD.  The damage inflicted from "crossing versions" includes software crashes and even loss of data.  So after you've installed your 7.8 upgrade CD, dispose of all prior versions!

2.  Do an IT audit.

When FBS consultants go on-site, they often find FBS programs and software installed multiple times in multiple places.  The major risk from redundant software installations is that the software may not be updated properly.  This happens most frequently on networks where programs are inadvertently installed on the local machines using the "default" installation location of C:\FBSWIN.  (On a network, FBS-authored programs should only be installed and run on the server.)  To verify your software is installed correctly, right-click on the FBS icon on your desktop and make sure the "Target" and "Start in" locations are pointed to your server (see Figure 1).

Figure 1.  Shortcut properties should point to the server in a network installation.

The Change Company screen uses two panels:  See Figure 2.

1.	The Company selection panel on the left displays all the valid FBS data files within the current data folder.
2.	The File location panel on the right displays the current "active" data folder (the default is usually a folder called "Data" under the "FBSWIN" program directory).  You can re-select the Data drive by clicking on the drop-down list or the Data directory by clicking on a folder.  Once you've changed the file location, you'll need to click anywhere in the Company selection panel to display the FBS data files stored in that folder.
	Figure 2.

Problems can occur when the data drive or directory are changed either intentionally or unintentionally.  If the new location doesn't contain any FBS files, all the data will have appeared to by "wiped out" and our support department will receive a panicky call.  We'll instruct you to verify that you have selected a valid FBS directory (right panel), then click on the company selection panel (left panel).  A variation of this dilemma can also happen when the file location directory is pointed to another copy of the data.

To track down redundant copies of your data, click on the "Copy Old Data" button from the Change Company screen.  See figure 3.  Click on the location (drive or directory) you wish to search and click the "Search" button.  All valid FBS data files will be displayed in the panel on the right.  NOTE:  Do not copy any files here (this is used only for DOS to Windows data conversion), and be extremely careful in using the "Delete Company" selection; files deleted by this method cannot be restored through the Windows.  We do encourage you, though, to go ahead and delete any "Well Managed Farm" sample data files.

	Figure 3.  Copy Old Data Files screen can also be used to find all FBS data files on your computer or network.

3.  Use Preferences that match your way of doing things.

The FBS Preference file (Utilities | Set Preferences) provides the "last word" in customization and flexibility—from export file locations to screen layouts and colors to default entry settings.  A unique Preference file is available for each company and new definitions (but not your personal settings) are updated automatically through CD and Internet updates.  Preferences are self-documenting, but to view a complete list in an Excel file, click on this link:  FBS Prefrences

Figure 4.  FBS preference Descriptions (left column) and help suggestions (red box) are automatically added with updates.  Save your preferences for each company in the Value column.

4.  Read e.farmsmart and on-line documentation.

You can access a wealth of FBS information in our on-line Support Archives and instantly by pressing the F1 function key or clicking on Help.

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

Each winter, a quaint tradition is repeated in rural banks across North America.  A loan officer hands a farmer a blank form the size of Rhode Island and says, "Here's a cash flow.  I want you to fill it out."

The results are quite predictable, according to Dr. Donald Chafin, economics professor at Wilmington College, Ohio.  "The difference between what the farmer has in his mind as his production plan and the banker's cash flow summary plan is the difference between night and day."

Chafin continues, "Farmers have a great deal of difficulty with filling out the numbers because they don't see the process that is involved behind it.  Consequently, they often come up with the wrong numbers or have a lot of difficulty."  (Or they grudgingly fight "friction" with "friction".)

It's probably safe to say that only a handful of farmers know the correct process for preparing a cash flow.  (Most don't even know there is a process.)

As we will see, the major challenge in the planning process is to transfer the descriptions in your head into numbers on a sheet of paper.

By using a system called "Whole Farm Planning," you can generate a cash flow statement to satisfy your banker.  But the quality and quantity of information produced through Whole Farm Planning goes well beyond your lender's minimum requirements.  Benefits include:  Cash flow projections that are accurate and believable, well-organized production, purchasing, marketing, financing and capital improvement plans, enterprise budgets and break-evens, projected balance sheets, projected income statements, financial analysis and trends.

How much extra work is involved in Whole Farm Planning?  If you're already doing one or more of the tasks above, Whole Farm Planning will probably save you time…and get those jobs done right the first time.

What's required to do Whole Farm Planning?  There's absolutely no way that Whole Farm Planning would be practical without:

•	A Computer
•	An integrated software package

Dr Chafin explains the advantages:  "An important principle in farm records is that if a number will be used once, it can be most efficiently handled using only a pencil and paper or ledger book.  But if you will use that number more than once, a computer (with an integrated software package) will handle the information more efficiently.  (With Whole Farm Planning), it's easy to see how the same number could be used 11 times in one month or 132 times in a year."

•	An organized procedure for developing, monitoring and revising the Whole Farm Plan

Step One: Gather "Known Facts"

As we have learned in the past, the foundation of any plan should be based on as many verifiable facts as possible.

Balance Sheet and Inventories

The first place to turn for the "knowns" in your plan is last year's balance sheet.  There you will find:

Current asset balances.  These include savings accounts, hedging equity, notes and accounts receivable, as well as cash in the bank.  Be sure to include FSA payments due to be received and any hedged or contracted commodity sales.

Inventories.  Itemized lists of crops, livestock, feed ingredients and supplies on hand at the end of last year are the logical basis for purchasing and marketing plans for the coming year.

Intermediate and fixed assets.  While not involved directly in the cash flow, machinery, buildings and land values and statistics definitely come into play in plans for financing, capital improvements and repairs and are especially important for projected balance sheets and income statements.  The list of accounts payable, operating notes and mortgages on last year's balance sheet will tell you:

a)	How much you owe in the coming year for interest and principal.
b)	when those amounts are due.

Contracted feed, fertilizer or livestock purchases should also be included.  IMPORTANT:  Your planning period must always begin on the day following the date of your balance sheet.  For calendar year reporters, the balance sheet will be dated December 31 and the cash flow begins January 1.  If your fiscal year ends in any other month, your cash flow has to start on the first day of the new fiscal year.

Historical Accounting Records

A second source of "known facts" is the previous year's accounting records.  We can't emphasize more strongly, though, that the only dependable assumptions you can draw from last year's records are fixed costs.  These include:  Personal property and real estate taxes; property, life and health insurance; depreciation; interest due on intermediate and long term liabilities; repairs; cash rent and hired labor*.  Last year's costs should never be used "as is." Make sure that you adjust them to this year's situations.

*By definition rent and labor are not fixed costs.  However, if your farming operation never employs seasonal help or rarely pays overtime, last year's payroll figures are a reasonable guideline.

Figure 5.  The Whole Farm Plan begins with "Known Information."

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