You may have heard the term enterprise used when referring to a more traditional button up business world. And yet, it can also be applied to agricultural businesses. In this blog alone, we regularly reference our software solution as farm ERP software, enterprise resource planning. You may have also heard of enterprise accounting. But what exactly is an enterprise? What does that mean and how does it help us manage our farms? Our agricultural business? And, how can we leverage enterprise strategies, taken from more traditional businesses, and apply them to our work?
- What is Enterprise Accounting?
- What is a Farm ERP Solution
- The Impact of Farm ERP Solutions on Farm Management
What is Enterprise Accounting?
Enterprise accounting focuses on tracking and recording financial transactions for larger organizations, like your farm or ranch. This type of accounting requires software and processes to accurately track the financial activity across multiple branches, departments, and locations. For example, let’s say your farm has multiple profit centers or tracts that, while they may act as independent entities, are part of your larger farm business.
Enterprise accounting includes budgeting, forecasting, inventory management, tax reporting, payroll processing and financial statement preparation. Further, it provides an integrated view of all your financial operations, allowing you to analyze overall performance. With these tools in place, you can effectively employ managerial accounting techniques to improve overall decision making.
What is a Farm ERP Solution?
Given what we know, now, about enterprise accounting, understanding how a farm ERP solution employs enterprise accounting is the next step. A farm ERP solution is a comprehensive software system specifically designed to assist farmers and other agricultural businesses in managing their operations. It provides essential support for daily activities, such as crop and livestock management, inventory control, financial planning, supply chain and resource optimization. Further, the system is customizable so it can be tailored to the specific needs of your business.
In addition to providing the data you need to make smart and strategic financial decisions, a farm ERP solution offers powerful automation capabilities that can save time and money while increasing efficiency and farm profitability.
How Farm ERP Solutions Help Track Cost Centers
Cost center tracking is an integral component of Farm ERP systems, allowing for precise budgeting based on accurate data. Farmers must be able to identify areas where money is being spent most effectively and identify potential areas of waste or inefficiency. Additionally, Farm ERP solutions provide detailed insights into profitability across multiple cost centers – enabling farm managers to make informed decisions about how to allocate resources more effectively.
How Farm ERP Solutions Help Track Profit Centers
Much like what they do for cost centers, farm ERP solutions can help farmers and agricultural businesses track their profit centers by providing a centralized platform for data collection, analysis, and reporting. You get to make decisions based on real-time data rather than relying on intuition alone. It’s a far more efficient way to monitor the performance of a farm’s operations, such as crop production, livestock management, labor management, and other activities that affect profitability. In other words, you can quickly see where you may be losing money or not making enough to be profitable and take corrective action.
Tracking profit centers with a farm ERP solution can improve both efficiency and profitability while reducing costs associated with managing multiple systems across different departments
How Farm ERP Solutions Improve Budgeting and Farm Accounting
As you can see, farm ERP solutions can be a powerful tool, helping farmers and farm managers with their budgeting and accounting. By automating the financial processes, these solutions can make it easier to quickly and accurately track income, expenses, and cash flow. This information can then be used to create detailed budgets that take into account all of the costs associated with farming activities such as equipment maintenance, labor costs, crop production, marketing expenses and more.
Improved budgeting then allows farmers to project future production, sales, and expenses and monitor actual results against the plan. Additionally, these solutions provide detailed analytics which can be used by farm businesses to identify ways to save money or increase profits based on historical data or current market trends. Furthermore, farm ERP solutions often integrate with other systems such as payroll or field and feedlot monitoring software which allow for more accurate reporting. Or, if it’s the farm ERP solution from FBS, these modules are rolled right in.
The Impact of Farm ERP Solutions on Farm Management
So what does this mean for you? For decades, ag tech has reshaped the way farmers do business and, up until now, most of that innovation has occurred in the barn and fields. Farm accounting software, that is specifically designed for the special needs of agricultural accounting, was groundbreaking in itself. Farm ERP solutions take that data and information management one step further.
While accounting solutions simplify taxes and help account for farm production cycles, a truly robust system will help you account for all the accounting and financial functions of your farm operation. Simply put, that’s a farm ERP solution.
While a farm ERP solution can simplify and automate your data collection and management, it can also help you:
- Mitigate financial risks
- Improve resource, supply chain, and vendor management
- Improve data accuracy and availability
- Increase ROI and cost savings
Again, all of this is possible when you have a single system collecting and aggregating your farm data. Imagine being able to forecast and predict with real time information. Imagine knowing which profit centers are driving your growth and which cost centers need to be made more efficient. Imagine being able to do all of this from your back office, regardless of where those profit and cost centers are located.
Ag tech has been changing the face of farming for decades now and it's finally made its way to the back office. If you’re ready to talk to a team who’s got the experience and expertise you need, from accounting to farm management, get in touch with FBS Systems today and let’s start growing together.