Farming in the Cloud,Hedging Added to Financial Guidelines,Prescription Farming for Your Financial Records, FBS Users in the News, Don't Wait to Install
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 FarmSMART                                              January 2014 

In this Issue:

February trade shows

Farming in the Cloud

Accounting For Hedging Added to Financial Guidelines

Prescription Farming for Your Financial Records

FBS Users in the News

February Free Webinars

Q&A:  Don't Wait to Install 

 

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Greetings,

 

January:  time to recalibrate and reallocate. 

As you're reviewing and closing your 2013 records now's the best time to apply what you've learned through FBS to fine-tune your business in 2014.  It's possible that all that's needed is a minor tweaking to your "well-oiled machine;" however, we suspect most of you are looking for ways to make quantum leaps in your information flow--from automating data collection to betterorganizing, prioritizing and analyzing the vast amount of financial and production information you should have at your disposal.  

We're ready to help you build on this information foundation with advice, support, training and, of course, specialized software modules.  We can also put you in touch with accounting and financial professionals who can help you follow through with your New Year's resolutions.    

FarmSmart begins the year with these topics: 

  • Learn the benefits of farming in the cloud.
  • Access the new hedge accounting guidelines from Farm Financial Standards Council.
  • Discover how Growth Path Accounting can apply to your business.
  • Register for our free, weekly webinars. 
  • Get your FBS upgrade installed quickly. 
        SDG 

  Also look us up at one of these February trade shows: 

Trade Show
Date
Location
Booth #
February 5-6, 2014 Peoria Civic Center, Peoria, IL 207
February 12-15, 2014 Kentucky Exposition Center, Louisville, KY 620A
  February 27-March 1, 2014  San Antonio Convention Center, San Antonio, TX 4056
Farming in the  Cloud 
 
FBS users show Successful Farming what's possible   

Most farm records never leave the field due to the difficulty of getting them re-keyed into an office computer and the challenge of reconciling inventories.  However, Nebraska growers Kerry and Angela Knuth are taming their "inventory monster" by capturing production data in mobile devices that link back to their FBS managerial accounting through the "cloud."  There data can then be easily accessed by management consultant John McNutt for further analysis.

Read how the Knuths are supported by firms like Conservis, Latta, Harris, Hanon & Penningroth, AgCompass and FBS System sthrough cloud-based integration in the January 2014 Successful Farming magazine article, Taking your farm to the cloud. 
Accounting  For Hedging Added to Financial Guidelines

Recommendations on accounting for hedging transactions on agricultural financial statements are now part of the Financial Guidelines for Agriculture as nearly 70 pages have been added to the document in an updated version released in January 2014. The Guidelines are produced by the Farm Financial Standards Council. 

The additional content focuses on examples of how to account for hedge (futures and options) transactions on financial statements for agricultural producers. An important aim of the updated document is to explain how, when, and where to report hedging gains and losses on accrual financial statements.  

Futures and options transactions are used to manage price risk faced by agricultural producers for both products produced and inputs purchased, sometimes resulting in large hedging gains and losses.  The theory behind hedging is that as the product being produced rises (falls) in value, the hedge position falls (rises) in value so that gains (losses) in the physical market are offset by losses (gains) in the derivatives market. 

Todd Doehring, Centrec Consulting, Savoy, IL, a member of the FFSC Technical Committee, noted that there are two types of hedges discussed in the update: fair value hedges and cash flow hedges. "Fair value hedges occur when a producer hedges stored grain that is valued on the balance sheet at its fair market value and is readily available for sale," Doehring says. "In this case the resulting hedging gains and losses are included in the revenue section of the income statement."  He also stated that "Cash flow hedges occur when a producer hedges items not available for sale, including planned or growing crops or livestock." These items are valued at cost on the balance sheet, and the resulting hedging gains and losses may be excluded from the income statement. 

Doerhing reports that the hedging section of the Guidelines has been nearly two years in the making by the members of the Council's Technical Committee. The updated Financial Guidelines for Agriculture (previously known as the Financial Guidelines for Agricultural Producers) is now available for purchase through the Council's Web site at www.ffsc.org/order-the-guidelines/. 

The FFSC is an all-volunteer non-profit group consisting of individuals interested in the improvement of financial and managerial accounting for agricultural producers.  Lenders, producers, accountants, farm managers, consultants, academic professionals, software developers, and others comprise the roughly 50-member organization. 

Editor's Note:  FBS will soon be offering Hedge Accounting web training based on the FFSC Guidelines.  Contact norm@fbssystems.com if you'd like to participate. 

Prescription Farming for Your Financial Records  

Imagine strolling into your local farm machinery dealer and telling the salesman you want to buy enough equipment to run a farm. After he regains consciousness, he's likely to ask you for more detailed specifications: horsepower, width, tillage method, etc. so that he can prepare the bid. If you can't describe the machinery you need, most dealers can determine that for you by matching the capacities of each implement to the acres of crops to be grown. 

Now picture trying to buy farm machinery without even knowing the size of your farm or which crops or livestock you intend to raise. The results could be disastrous. You might end up with a garden tractor to farm 10,000 acres of wheat or a 300 horsepower four-wheel-drive monster to spray your orchard. 

The Scene of the Crime 

Pretty ridiculous, right? Did you know that this same crime is committed every day in stores and trade shows. Typically, a farmer with little experience in accounting and computers confronts a salesperson who has no idea how to translate the farmer's needs into a workable solution. Salesmen sell what they know, and what they know is usually limited to a handful of programs. What do you think are the odds that one of these programs is exactly what the farmer needs?   

So after years of courtship with computer and programs, a shotgun wedding occurs between the farmer and whatever was on sale the day he walked into the store or booth.   

The marriage begins with the salesman's traditional blessing, "this will do the job for you." The honeymoon ends when the farmer discovers that his bride is holding back information. 

Complaints vary. Users who go home with only a spreadsheet program often spend hours trying to cobble together make-shift record systems. Others discover that their first full-fledged accounting program is totally inadequate and start over. But probably the most discouraging cases are when the farmer discovers that he has bitten off more than he can chew with an expensive accounting package that is just too complicated and cumbersome to get off the ground.   

The costs of these failed marriages are significant: the original purchase price of the software, the user's lost time in wrestling with the computer and the cost of wrong decisions due to inadequate information.    

Most software offered to agriculture is of good quality and appropriate for the application for which it was designed. With the dozens of titles available, though, the chances of accidentally picking the ideal program the first time out are remote at best.   

That's why a careful analysis of each operation's financial management needs is essential prior to considering the purchase of hardware and software.   

(This story continues on the Farm Management Software Blog.)
FBS Users in the News 
  
Congratulations to Kevin Hugoson and Jim Heimerl who served in 2013 as respective presidents of the Minnesota Pork Producers Association and Ohio Pork Council.  Jim is also serving on the National Pork Producers Council along with Indiana producer Mark Legan.
February Free Webinars
  
February  3:  Printing--PDF, Ranges, Page Setup 
February 10: Finding Entries
February 17: Using Macros
February 24: Reprinting / Voiding Checks
 
All webinars run between 1:00 pm and 2:00 pm CST.   

To register, e-mailsupport@fbssystems.com by 12:00 pm CDT on the day of the webinar.

Q&A of the Month--Don't Wait to Install 
Sarah Dixon
Sarah Dixon, FBS Technical Services Manager.

 Q.  When is a good time to install the upgrades off of the new 8.14 CD you sent?           

A.  Now is a good time!  As soon as you get the update CD feel free to install it. I hear a lot of clients say they want to wait until they are done with their year-end entries before installing upgrades, but there is no reason to wait. The upgrade will not touch your data so it is perfectly safe. Plus, the updates that will be installed from the CD might make entry or reporting easier for you at year end.     

The steps to take to do the install from the CD are included on the insert that came with the CD, but here are some tips to make the process fast and easy:  

The icon properties shows you where your FBS software is installed.

1. Determine in which file folder you currently have FBS installed. To do this right-click on your desktop FBS icon and go to Properties and note the Start in and Target fields. Most of the time the path isC:\FBSWIN81, but occasionally it will be C:\FBSWIN. Once you have determined the location of your current installation of FBS you can close this window.  

2. Put the disk in the computer and it should pop up an install wizard window and ask if you want to run Setup.  Go ahead and run that file.  

3. Follow the on screen prompts to agree to the license agreement. 

Choose the same location as the Properties screen in Step 1.

4. It will ask where you want to install it and the default should be to the current folder where you have FBS installed.   Double-check that it is going to install in the same location as step 1.

Choose the FBS components to install.

 5. Next check the box for Basic and Transaction Plus and any other modules you have purchased. Click Next and continue through the rest of the screens until installed.

 If you have any issues remember you can always email or call support!

Sincerely,


FBS Systems

 

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