"High Impact" Benefits from the 2022 Ag Software Success Summit

Here's how you and your operation will benefit from this unique event--the only software user conference addressing real-world farm  management challenges.

• Learn how top producers Integrate production technology, finance, and knowledge by:
  • Scaling without slipping.
  • Developing and protecting their “secret sauce.”
  • Managing moving margins.
  • Adapting best practices from other enterprises.
  • Navigate the changing fintech landscape.

• Achieve greater efficiency and effectiveness through these practical breakout software training classes:
  • Review of your setup and SOPs.
  • Ultra-customization of your software.
  • Potential of PowerBI integration.
  • Building meaningful cost analysis reports.

• Plus these "soft" benefits:
• Network with other outstanding producers, including a prime rib Mississippi River dinner cruise.
• Explore the exciting future of your software and how you can guide and control it..

The 2022 Ag Software Success Summit will be held August 30-31 at the Stoney Creek Inn, Moline Illinois.

Click here for more information or to register.  "Early Bird" savings end soon.

Reserve your hotel room at the Stoney Creek Inn using booking # 2208FBS by August 5 by calling 309-743-0101.

Watch video highlights from last year's Summit.

This Year's Top Management Conferences

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Conference	Date	Location
	August 30-31	Moline, IL
	October 23-26	Oklahoma City, OK

 

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Time Value of Information

In prior issues we covered three levels of computer applications:

• Compliance—What We Have to Do
• Decision Support—Where We Want to Go
• Business Processes—How We Get Things Done
  
  

We used a mountain range metaphor to depict the relationship between these levels—decision support (covered last month) on the peaks, compliance along the smooth valley road and business processes as the rugged path to the top.

Compliance: the Great Equalizer

Would most farmers keep records if it weren’t for the prodding from the banker, IRS, USDA and EPA? As a result, though, these institutions define the format (1040 Schedule F, Census of Agriculture, FSA-578) and the frequency (annual, at best) that every producer, great and small, must assemble their data. While a massive amount of output is generated to meet compliance standards, little of it is directly used for internal management decisions. Some reasons include:

• Low perceived value of the information. For a vast majority of producers compiling information for the accountant, banker or Uncle Sam is a rote process performed under duress at the last minute, with no clear appreciation or feedback of what all of it means or how it benefits their operation.
• Low perceived quality of information. When records are considered only as a chore dictated by a bureaucracy, producers will naturally do only the minimum necessary to get by; therefore, the resulting information should rightfully be viewed with skepticism, again lowering its perceived value.
• Generic format. The simplification and generalization required to fit a complex farming operation into the broad categories on a government form or a non-agricultural accounting program dilute most of the internal management benefits of keeping that data.
• No continuity. Most compliance records are “zero-based,” i.e. requiring you to start each year with a blank slate with no access or reference to historical data (although the institutions receiving that information likely maintain sophisticated historical databases).
  

  Business Processes: How We Get Things Done

  Compared to the wide adoption of occasional decision support and annual compliance reporting by most producers, only the most intense managers are use computers to monitor day-to-day business processes such as inventory control, purchasing, marketing, production records, human resources and managerial-level accounting. It’s not that the rest of agricultural world doesn’t perform these functions, it’s just that they’re going about these tasks out of habit or in a reactive, off-the-cuff manner as opposed to the formal, standardized business processes demanded by other industries.

  Because business processes are often closed, mechanistic systems, the information they provide is much more specific and precise than what’s available through stand-alone decision support or generic compliance-based software. For example, GPS yield data are much more precise than an EPA restricted use pesticide report, and managerial accounting is much more accurate than a partial budget.

  However, there are some downsides even to business process applications:

  • Precise and historical, but not actionable. By the time many annual, quarterly and even monthly reports are prepared, crops and livestock have been raised and marketed, investment decisions committed and profit or loss locked in.
  • Single-purpose applications. “Best of breed” business process applications all need to be fed, and often that means recording the same or overlapping data in multiple systems, degrading the timeliness and value of the resultant information.
  • Conflicting or confusing results. The output from specialized business process applications, similar to decision support software, is often narrowly-focused, ignoring relevant data from other applications, substituting that information with “plugged” values which are neither current nor accurate.

  Here’s a graphical representation that depicts the time value of information and where decision support (Economic Analysis), compliance reporting (Tax Accounting) and business processes (Managerial and Accrual Accounting) fit into this picture.

  Note that Economic Analysis can be performed within a short time but has limited value because it’s not very precise. Tax Accounting requires a long time and has the lowest value (to the manager) even though it might be precise. Managerial Accounting, on the other hand, can be both timely and precise, but it requires adaptations which we will cover in a future installment in this series.

Q&A:  New Cost/Profit Center and Ledger Account Setup Enhancements
Here's a video of some of the setup enhancements we've made to Cost/Profit Centers and Ledger Accounts.	Sarah Dixon, FBS Support Coordinator sarah@fbssystems.com (800.437.7638/extension 100).