For modern farmers, agriculture technology has become an integral part of business. However, when most people think of “ag tech,” farm accounting solutions might be one of the last things that they think of.

When analyzing your farm’s financial reporting system, what level of reporting does your farm use? Are you on a cash basis, an accrual/management accounting basis, or both? In other articles, we’ve contrasted the ways that farmers produce their financial statements and the  conflicting goals of maintaining simultaneous financial records using both cash and accrual.

When it comes to farm oversight, understanding where you are, in terms of financial information and accounting is vital. Growth Path Accounting starts with asking where you are now and what your information goals are. Growth Path Accounting can be narrowed down to three objectives:

• Leveraging the technology available to you through software and applications
• Learning advanced accounting skills at your own pace  
• Preparing you and your operation for future expansion to integrated farm records
  
  

To get there, you first need to understand Growth Path accounting and all of its separate parts. That informs not just your understanding of where you are and which accounting method you’re currently using, but also where you’d like to be and the advantages of the other accounting methods available to you.

Farming is about growth. It’s the primary focus from crop and livestock to the back office. Crops don’t grow from seed without external factors, nor does livestock. So how can we hope for our overall farm or ranch operation to grow without considering all the growth factors that allow the business side to thrive or wither?

And, when we see a challenge or opportunity to address a production shortfall, we look at all the options on the table. The growth path decision tree applied to farm accounting allows us to do the same. We look at the accounting decisions that impact our decision making process and assess how we can use accounting methods to improve our operations and profitability.

Learn new farm management and marketing skills and network with other producers from around the country at the 2019 Farm Futures Business Summit

For more information or to register click here.