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Greetings!
It's June again, and there's plenty of green (and water) to go around here in the Midwest.
"Green" was also on the minds of pork producers attending the PORK$HOPSeminar earlier this month. We'll continue focusing on how all types of producers can keep more of their green at the annual FBS User Conference in Moline, Illinois, home of green farm machinery.
We're continuing a series on "Best Practices" with tips on using Ledger Accounts and will tell you how to record payments without writing a check.
Finally, we're providing links to some great Summer ag events around the country and webinars you can attend without leaving your desk. SDG
PORK$HOP Speaker Asks "What Are You Getting Paid For?"
Wells Fargo Economist Michael Swanson
According to PORK$HOP keynote speaker Michael Swanson, the choices are either "guessing the future" or "being a good operator." Since guessing the future is above the pay grade of even a Ph.D. economist like Swanson, the real returns come from "margin management" and "reading the blitzes."
The June 7, 2011, seminar began with "Best Practices of FBS Pork Clients," then proceeded to the release of the Latta, Harris, Hanon & Penningroth Cost of Production Benchmarks for 2010 and projections for 2011.
John McNutt compares"real-life" production costs for all segments of pork production.
The application of cost benchmarks, market outlook and software practices occurred in the closing panel where David Ward, Commodity and Ingredient Hedging, Adam Hocker, Brenneman Pork and Kent Bang, Bank of the West, described the opportunities available to pork producers through sound margin management.
Margin Management panel members Kent Bang, David Ward, Adam Hocker and moderator Mark Penningroth.
Thanks to everyone who particpated in PORK$HOP.2011.
See you next year!
Click here to view the presentations from this year's seminar.
Don't "Miss the Boat" to the FBS 2011 User Conference
Please mark your calendars now for the premier management training/networking event of the year.The annual FBS User Conference helps anyone using computers in agricultural to be more current, effective and profitable.This year's conference will be held on September 1-2 in the Stoney Creek Inn, Moline, Illinois and will feature:
New users sharing how they are making the transition from traditional software to the FBS integrated system.
Best practices from experienced FBS users.
Cost of production benchmarks for crops and livestock.
New product and version training.
Breakout sessions for beginners, "power users" and professional service providers.
A prime rib dinner cruise on the Mississippi River.
Don't miss the boat! Hold those dates and watch your mail and the FBS website for more information.
Apply "Best Practices" to Your Ledger Accounts
Editor's note: This article begins a new series on the "best practices" FBS users have developed to improve effectiveness, efficiency, internal control and compliance from their information system. We'll also be covering a full range of best practices at the 2011 FBS Users Conference in September. To contribute your best practices visit our blogsite.
Is your chart of accounts a multi-lane, high-speed expressway or a dirt road riddled with pot holes and rabbit trails? Following best practices with ledger accounts--the backbone of your accounting system-you can easily make data entry and reporting more efficient an effective.
These are the critical areas:
Completeness Since FBS switched to Windows ten years ago, all software versions include the Farm Financial Standards chart of accounts. (You can view this Chart by creating a new company within FBS and checking the Farm Financial Standards ledger accounts option under Quick Start.) This five-digit numeric chart of accounts was developed by CPAs in response to guidelines provided by the National Pork Producers and Farm Financial Standards councils. It not only encompasses most crop and livestock operations, but also includes the specialized "internal" accounts required to drive E.CLIPSE Managerial Accounting entries.
Other ledger alternatives include the FBS three-digit "Standard" chart, "cloning" from another company or building a chart from scratch using any combination of up to six letters or numbers. However, unless you're working with a trained accountant with FBS experience, it's much quicker and safer to begin with the FFSC chart, then modify to your needs.
Accounts that you know you'll never use (for example, "Bull Lease") can be deleted. (When in doubt, don't delete!)
Accounts that you may use in the future should be inactivated(un-check the Active box).
New account tailored to your business should be inserted in the proper sections, which are pre-defined by Class (Income, Expense, Asset, Liability, Equity) and Heading Account (for example, "Production Labor" or "General and Administrative").
The Marketing Expense Section
Follow the pattern of similar accounts to determine the properType and Integration Type.
A pre-built chart is also fully "de-bugged," requiring less support.
Remember that because FBS is a flexible, "multi-dimensional" system (Account x Division x Center x Group/Project x Product), a well-designed chart of accounts accounts generally doesn't require overwhelming complexity or continuing customization. (That's handled through the other data fields and sub-modules, which we'll cover in future chapters.)
Nevertheless, you may benefit by adding company-specific accounts under these circumstances:
Items you want to monitor on a per-unit basis with theLifeCycle Budget. This includes crop sales by commodity (see example below) and specific feed, utilities and fuel accounts.
Unit-based comparisons at the ledger level.
Major loans that you want to display as line items on your balance sheet.
Packer-specific sales, carcass and weight accounts you need to track in the Smart Feeder User-Defined Report or FarmSeRVey Dashboard.
But what if your FBS chart of accounts is still stuck in two-digit "FBFM" format? Take advantage of the re-labeling function in FBS and simply add two or three zeros to your current accounts and you've instantly expanded your chart. With a little more effort you can even switch a two or three-digit chart to the full FFSC version.
Consistency
A well-designed chart of accounts, backed-up by farm-specific sub-modules should be intuitive for data entry staff. The FFSC chart is split by descriptive Heading accounts that are organized around the typical sections of an income statement and balance sheet with Detail accounts in alphabetical order between each section.
Here are a couple of tips to help your data entry staff and report users to identify the appropriate accounts.
Account Descriptions can be up to forty characters long.
User-defined 240-character "cue cards" can be attached to selected accounts. (See Setup | User Defined Help to add.)
Again, never delete an account after it's been used; either inactivate it or inactivate and rename it using an alpha code if you need to re-use its number.
We've seen some innovative schemes for segregating internal management accounts from the external financial general ledger using alpha codes. Also if an account is always automatically posted (as with packer traits) it should be at the end of the list so it doesn't get in the way of manual posting.
An alpha prefix can identify management accounts.
Next month we will look at some best practices for Cost and Profit Centers.
Visited Our New Website Yet?
There's a wealth of timely information waiting your inspection at our new website. Check them out now by clicking on the image or any of the links below.
Go to Input | General | Check and clickAdd. Select the correct bank account and then in the Check Number field enter "Debit Card," "ACH," or "EFT" plus the date of the entry in numeric format (i.e. "062511" to represent June 25, 2011). Then complete the remaining fields just like a check. This entry will be show up as a check on the Check Register/Reconciliationreport and the Clear Checks and Deposit screen.Note that this process can also be used with Accounts Payable payments as an alternative to printing checks.
Summer Events Schedule
The "lazy, hazy, crazy days of summer" are a great time to discover what's new and relevant in technology, financial management and production practices. Click on the links for more information on these events.
Schedule
