April 2019 FarmSmart Newsletter

Minnesota "snow" on its way to the Gulf.

Dear Friend,

Misery loves company! While we haven't experienced as much white stuff or local flooding as some of you, all that water eventually has to find its way to the Gulf of Mexico. For Mississippi river towns that translates to five feet over flood stage and rising. So barge traffic on the Mighty Miss has been shut down until sometime in May.

However, we DO expect the Mississippi to be open for the annual FBS dinner cruise on August 23rd in conjunction with 2019 Software Success Summit (see announcement below).

In this month's FarmSmart:

Farm Financial Standards Council Conference in July.
Management Accounting Automation Case Study.
Closing the Month in FBS. SDG

2019 Software Success Summit

Presented by:

Mark your calendars for Monday, August 19 through Wednesday, August 21 for the premiere software knowledge and networking event for agriculture's information managers. This year's Software Success Summit theme is "Moonshot" as we celebrate Apollo 11's 50th anniversary and unveil a high-aiming software development plan funded and directed by MASA (the Mutual Agricultural Software Alliance).

The conference will be held at the Stoney Creek Inn and Conference Center on the banks of the Mississippi River in Moline, Illinois. Watch for program details and reservation instructions in next month's FarmSmart newsletter.

The Farm Financial Standards Council Conference Looks at Ag in the Southeast

The Farm Financial Standards Council will take a close up and intimate look at some of the influencers affecting the ag industry and ag financial reporting, both locally and nationally, when it gathers in Raleigh-Durham, North Carolina on July 24-26th for its annual conference. Among the highlights:

A look at Regional Ag from North Carolina State University
Transition to the Next Generation
A deep dive into the Farm Financial Standards Guidelines (Lease Accounting)
What's new in accounting and auditing and its effect on agricultural reporting
The hemp revolution
Farming under attack--what's next for mass livestock production
The 2018 Farm Bill
The convergence of FinTech and AgTech
Regional agricultural tour

Click here to go to the FFSC Conference website for more information or to register

Automated Allocation Case Study

The following is a summary of a presentation entitled "Financial and Management Accounting Software--Developments, Implementation Challenges, and Integration Issues" made at last year's Farm Financial Standards Council Annual Conference in Champaign, Illinois.

Last month we considered the "virtuous cycle" process of continually adjusting activity costs based on real-time changes in dollars and units.

Here's the case study demonstrating how this works with Corn Harvesting Costs.

This Standard Cost/Vendor Monitor Report looks at total dollars allocated from 4 categories of costs using these color codes:

Credit for custom harvesting (orange)
Harvesting labor (red)
Harvesting fuel (blue)
Harvesting equipment (green)

The yellow section divides all costs by the Cost Driver Units (in this case Harvest Acres) to calculate Actual harvesting costs per acre for each field for the year.

To calculate a new year we plug in a Standard cost based on the previous year. In this case, it's $42.00 per acre (a rounding of $41.96 Actual costs from Year 2.)

We can use that Standard rate until the Actual dollars and acres are known. The system will then automatically adjust the Standard rate to match Actual for each field.

Note that both costs and acres increased in Year 3, resulting in $43.27 per acre Actual/Standard costs for all fields. We can use that number as a baseline for calculating Year 4.

Furthermore, we can analyze the contributions, trends and opportunities from the per acre (or alternately per hour) labor, fuel and machinery portion of costs.

Q&A: Closing the Month in FBS

Sarah Dixon, FBS Support Coordinator

Q. What should I do to close out each month?

A. Standard FBS doesn’t have a monthly "hard" close routine; however these are the practices we recommend.

For accounting records:

Reconcile bank statements
Run an Accounting User Defined Report and check for undefined entries
Run an Income statement to see that income and expense entries are entered to the correct ledger
Run a Trial Balance and/or Balance Sheet to make sure you are in balance

(#3 and 4 should be run at the Cash and Financial levels for entries in period and then repeated at the Cash level for date cash exchanged.)

For livestock and/or crops you will want to run some additional reports and complete a few extra tasks:

Input Inventory Reports. For crop or livestock inputs make sure seed, chemicals, fertilizer, fuel, feed and drugs are not going negative and ending inventories match physical inventories.,
Livestock Detail Inventory Report. Again make sure your inventory isn’t negative and that the ending inventories look correct.
Crop Inventory Reports. Verify that your inventories look correct and that they are not negative.
Close any Projects or Groups that have been harvested or zeroed out in the month.

If you have E.CLIPSE Management Accounting do the following:

Run your Inventory Valuation and check for variances and timing message in the Current Detail Report.
Make sure the View History center balances match the the WIP Inventory Report for each center and general ledger balances.

Note that FBS offers an optional Period Closing module that allows users with administrative privileges to "lock out" closed periods from accepting new entries or edits.