In this Issue:

Greetings!   

How efficiently do youcapture, record, verify, process, and access management information? 

Are your "best practices" based on tradition rather than training? 

It's understandable that folks who haven't yet experienced FBS'sintegration andautomation would be plugging away like the "rice crew" in this photo.  But we're amazed at the unnecessary steps some of our own customers go through simply because they've established habits and/or haven't taken advantage of our free webinars, inexpensive User Conference or customized onsite/web training. 

By staying current with this newsletter and our Farm Management Software Blog or viewing the archives and interactive training resources on our website you'll avoid spinning your wheels. 

This month we're covering the following tools and ideas to make you more efficient and effective:

• Learn about the latest FBS upgrades for 2013.    
• This month's Best Practices column covers how manufacturing companies adjust overhead variances.    
• Our free, weekly one o'clock webinar addresses timely and time-saving tips for getting more done in 2012 and 2013.    
• Follow our FBS Users in the News link to Corn & Soybean Digest.
• The Q&A of the Month provides guidance for you and Santa for shopping for computers and choosing which new FBS version is best for your operation.  
• Will the new Window 8 operating system help or complicate your farm management chores?  Find out at the Farm Management Software Blog. 

                                                                                      SDG

Sky's the Limit With New FBS Versions 10.2 and 8.13 

 

In both the agricultural and computer worlds the only certainty is change. That's why FBS launches its 33rd year with softwareupgrades that take advantage of technological advancements in the field and office while providing "safe harbor" for users who are comfortable with their current hardware.   

Version 10.2 is configured to take advantage of the memory capacity and performance of latest 64-bit computers. Version 8.13 optimizes compatibility and performance for older 32-bit computers (but will also run on 64-bit machines). Both versions will operate in the new Windows 8 operating system. 

Upgrade CDs have already been shipped to FBS Corporate, VIP andPriority Service Agreement licensees. Basic Service subscribers will receive their upgrades in December. 

Below are just a few of the highlights. For the complete list click here.  

General 

Dock, view and access multiple modules from a single screen.

• Screens and reports can be "docked" into easily-accessible tabs or windows (Version 8.13 only)

• Added preference to control Open/Closed Periods by file 

• Added numerous options including Fast Link to the Scanner Interface

• In multiuser systems added warning to Setup Ledger Accounts/Centers if someone else has made changes

• Numerous enhancements added to Contract Module

TransAction Plus

• Changed Edit to include inactive bank and ledger accounts

• Added warning message to Check Register if date cleared > 90 days from check date

• New Trial Balance option to print debit and credit columns

 Crop Audit Plus 

• New Material Price Matrix module

• New Field Operations Rates module

• Module to import from DigiStar, Conservis and LandDB

• Added Split Table to Crop Inventory/Crop Matrix Inventory Reports

• More options added to Task Report

• New Inventory Valuation (E.CLIPSE) options to preserveinactive centers in setup and lock in landlord billings

Smart Feeder

• Increased ration limit from 800 to 1000

• Verify Group ID allows globally editing groups and dates in multi-line feed entries

• Numerous options added to Commercial Feed Mill Interface

• Several improvements to Batch Feeding module

• Numerous options added to Invoice Feed module including offsetting intercompany A/R-A/P invoices  
• Numerous changes to Input History Report, including the option to combine Nursery/Finisher Groups and report weekly death loss from "first date in"

• Added Carolina Pride, Hatfield Driver ID, new Hormel format and Triumph Packer Weight Classes to Packer Interface

Smart Breeder

• Added columns for transfer out and death loss to Input By Sow, Foster Litter
• Implemented Delete Pig Death in Input by Sow
• Added Not In Pig Event and auto reset 1000 day calendar
• Added Sow Alternate ID to Sow History Report and PSR Sow Card

New Parts Inventory Module (see details next month)

Adjusting Cost Allocations

 Editor's note: 

This article continues a new series on the "best practices" FBS users have developed to improve effectiveness, efficiency, internal control and compliance from their information system. Last month in the October newsletter we identified the reasons that "actual" overhead costs will never exactly match the pre-determined Activity-Based Costing (A-B-C) standard costs. This month we will describe how these variances are normally treated by manufacturing firms and how this process can be applied to production agriculture. 

What's the financial result from variances created by seasonal patterns of costs (the "numerator" reason) and/or in uneven output (the "denominator " reason)?   Overhead costs are under-applied (under-absorbed) or over-applied (over-absorbed) resulting indistorted product costs. 

Businesses follow three practices for adjusting these variances:

1. The Adjust Allocation-Rate Approach restates all overhead entries through the general ledger using actual costs rates rather than budget/standard cost rates. Result: At year-end work-in-process, finished goods and cost of goods sold accurately represent actual indirect costs incurred. Benefits: This option provides the timeliness and convenience of normal costingduring the year and the accuracy of actual costing at the end of the year and is the most accurate record of individual job costs for profitability analysis.   
2. The Proration Approach spreads under- or over-allocated overhead among ending work in process, finished goods and cost of goods sold.   Challenge: The basis for prorating variance (dollars, acres, bushels, head) may not be proportional to the actual distribution of costs between" jobs" (FBS projects and groups.) Furthermore, while producing accurate "high level" closing financial statements determining future costs of goods sold will be impaired unless these closing entries are meticulously assigned down to the group or project level.  The proration approach does not adjust individual job-cost records.  Benefits: On the surface this is less complex (but creates problems in future periods if work-in-process and finished goods are lumped into general accounts). It also provides an accurate valuation of inventories and cost of goods sold for financial statements.   
3. The Write-Off to Cost of Goods Sold Approach assigns totalunder- or over-allocated overhead costs to the year's cost of goods sold. Benefits: This is the simplest solution since only one account needs to be closed, which is acceptable when variances are small. Challenge: It's the least accurate option because work-in-process and finished goods manufacturing costs are not "pushed" into the future accounting period.

Most FBS clients use Approach #1 because the E.CLIPSE Management Accounting System  can automatically reset prior allocations at the push of a button. Below is a screen from theStandard Cost/Vendor Monitor Report spanning four quarters. By pressing the Update Overhead Allocation button then recalculating inventories values all variances will be zeroed out and costs precisely reflected for work-in-process, finished goods and cost of goods sold for the year.

You can reset standard cost allocations to actual through the Standard Cost/Vendor Monitor Report.

  Estimating overhead costs, comparing actual performance with those standard costs and adjusting allocation rates is a continuous process yield a much more effective understanding and control of your business. 

Allocating and monitoring costs is a continuous management process.

Iowa farmer and past president of the Farm Financial Standards Council (FFSC) Ron Swanson was quoted in the November 2012 Corn & Soybean Digest article "Crunch Your Scenarios."