World Pork Expo, Twin Cost Benchmarks, FFSC Conference, ASAC Conference, Cash Flow Hedge Process, June Free Webinars, Q&A: New Way to Handle Credit Cards
Not rendering correctly? View this email as a web page here.

 FarmSMART                                                       May 2013 

In this Issue:

Where In World Pork Expo Is FBS?

User Conference with Twin Cost Benchmarks

FFSC Conference

ASAC Conference

Best Practices:  Cash Flow Hedge Process Overview

June Free Webinars

Q&A:  New Way to Handle Credit Cards

 

Visit our Website

FBS_Logo2

Stay in Touch

Farm Management Software Blog Button  
 
View our profile on LinkedIn
 
Follow-up Links
 
 
 
 
 
 
New Call-to-action
 
New Call-to-action
 
PPC_Full.jpg
Click here to learn about the Pork Profit Center Dashboard
 
   
 

Greetings!  

Planting 2013
The Fertile Field of Accounting 
You see a corn field being planted (at last!).  We see raw materials being converted into work-in-process through activity-based costingManagement accounting measures the efficiency, marginal returns (and possible sustainability) from farming practices that most take for granted.  
  • Learn how you can benchmark your crop (and pork) production costs in preparation for the 2013 FBS User Conference.

                                                                                      SDG

WPX Logog
 
Where In World Pork Expo Is FBS? 

 We look forward to seeing many of you at the 25th Anniversary World Pork Expo, June 5-7 at the Iowa State Fairgrounds in Des Moines, Iowa.  Please note that we've moved to a new location on the north side of the Varied Industries Building--right around the corner from the main entrance.  See map below for approximate location.  We'll be demonstrating some exciting new technologies so don't miss us! 

Varied Industries Floor Plan

 

Corn Cost of Production Table

User Conference Features Twin Cost Benchmarks

Both pork and crop cost of production benchmarks will be unveiled at the 2013 FBS User Conference, August 28-29 at the River's Bend Conference Center in Moline, Illinois.  The benchmarks are being compiled by the CPA firm of Latta, Harris, Hanon & Penningroth L.L.P. and the Russell Consulting Group

Corn cost of production benchmarks
2012 crop production costs presented on August 28.

Since 2006 the pork benchmarks have been released at the PORK$HOP seminar in conjunction with the World Pork Expo, but this year the content of that seminar will be incorporated into the User Conference.

Pork benchmark graph
2012 pork production costs released on August 29.

The crop production costs benchmarks will be presented in a general session on Wednesday, August 28thand the pork production costs will be released in a special breakout session at 1:00 pm on Thursday, August 29th.

If you'd like to participate in either the crop or pork cost of production studies contact John McNutt at the LHHP, Tipton, Iowa, office (563)886-2187.   

Also, if you're willing to make a presentation at the User Conference on how you're using FBS Software to manage more effectively, please contact norm@fbssystems.com by July 5th to qualify for a free registration.

 Please reserve Wednesday and Thursday, August 28 and 29th, 2013, for the most comprehensive information management and networking event of the year


To view the 2011 benchmarks presented at last year's User Conference, click here.

FFSC Conference
FFSC Conference to Cover Benchmarks, Hedging and "Go-Go Farmers" 
 
Much of what we program, publish and teach at FBS is based on the work of the Farm Financial Standards Council (FFSC).  This summer's annual conference of the FFSC will delve into the theory behind farm benchmarking and hedge accounting--two areas that we put into practice right in this newsletter and our User Conference.
  
Experts on the program will also examine opportunities in demographic trends and evaluate the "New Century Go-Go Farmer."

This year's conference will be held in Bloomington, Minnesota, on July 31-August 1 and will include a baseball outing at Target Field, the new home of the Minnesota Twins.
  
For more information, please contact the Farm Financial Standards Council.  Registration deadline is July 8 for the game, July 12 for the conference.
Muddy Boots
"Muddy boots" ag consulting.

ASAC Conference Designed for All in Ag Consulting

 A conference designed for all involved in agricultural consulting is being organized by the American Society of Agricultural Consultants. "This conference is designed for anyone and everyone involved with ag consulting," says Russell Morgan, CAC, chairman of the 2013 ASAC annual conference which is scheduled for October 20 - 22 in Alexandria, VA

Topics for the conference include: The changing role of ag consulting; communicating with clients; walking the tightrope between consulting and selling; where will the next generation of consultants come from; possible effects of immigration legislation on consulting; working with USDA and other federal agencies; and, Where's the Money? Is it a love or is it a job?

"We're calling it a 'Muddy Boots' conference and the program we have developed will appeal to anyone actively involved with ag consulting, no matter their professional discipline," Morgan explains. "We realize there are trade organizations that serve the various sectors of the industry and they have fine programs. Those tend to be narrowly focused and very specific to that particular part of agriculture. ASAC is different because our membership crosses over multiple professional disciplines. Because of that our conference has to be very broad in scope.

"The advantage professionals will have at the ASAC conference is the diversity of subjects covering the overall scope of consulting, particularly looking to the future. The opportunity to network with peers from other areas of the industry will be enormous as well," he adds. "We have over 40 professional disciplines represented in our membership; that leads to a lot of different conversations with the potential for cross-discipline collaboration." 

More information on the conference is available at www.agconsultants.org.

Bar ChartBest Practices:  Cash Flow Hedge Process Overview
  
As covered last month management accounting for cash flow hedges can be very challenging and complex due to these factors:
  • Cash flow hedges are initiated to lock in prices in a future period so hedging gain and loss must be "pushed" into that future period to match costs with sales.
  • Futures and option positions may be rolled several times between delivery months and/or contract types.  
  • Livestock producers who hedge feed as well as animals must be able to match past and future trades to the appropriate inputs and delivery periods.
  • Trading months for feed and livestock commodities rarely correspond.  (For example cattle and hogs trade October contracts, but corn doesn't.)

To help visualized how the specialized ledger accounts and centers we described last month fit together for tracking cash flow hedges refer to the graphic below which depicts a pork producer who locks in margins by hedging Lean Hogs, Corn and Soybean Meal (SBM).

  1. July 2014 futures positions in lean hogs, corn, soybean meal are established in mid- 2013 with the intention of protecting sales and feed costs for animals sold in the summer of 2014.
  2. In December 2013 these hedges are lifted (possibly to "roll" to other hedge positions such as options, cash contracts or different trading months). 
  3. Although the tax gains/losses for these trades are recognized in the 2013 fiscal year, the accrual profit or loss must ultimately be matched against the sales in the summer of 2014. This is accomplished by offsetting/reversing tax hedging gain/loss income accounts to Accumulated Other Comprehensive Income (AOCI) equity accounts for each commodity) and assigning them to the July 2014 Delivery Period center
  4. As a result the accumulated income for each commodity/delivery month is stored in AOCI equity/center "buckets."   As these animals are being delivered the balances for each AOCI/delivery center bucket is closed outand moved from the balance sheet to Other Comprehensive Income on the income statement.

 Cash Flow Hedge Flow Chart 

Next month we will describe the specific entries required to post these transactions. 

June Free Webinars
  
A/P and A/R Vendor Setup, June 3.Webinar Computer
Do I Need to Use the Vendor List?, June 10.
What Can FBS Import?, June 17.
How to Set Up and Use Split Tables, June 24.
 
All webinars run between 1:00 pm and 2:00 pm CDT.  To register, e-mailsupport@fbssystems.com by 12:00 pm CDT on the day of the webinar.
Q&A of the Month--New Way to Handle Credit Cards
Sarah Dixon
Sarah Dixon, FBS Technical Services Manager.

 Q.   What's the best method for handling and reconciling credit card purchases in FBS?

A.  TransAction Plus accounting has recently improved the way it handles credit cards with a new flag within our Accounts Payable module. It takes very little setup and makes tracking credit card purchase easy and efficient. Using the new credit card flag along with the A/P module is also an improvement over previous methods for expensing the purchase at the actual time of payment instead of when the transaction incurred. 

Here's how it works: 

Under Setup | Accounting | Vendors find your credit card vendor (i.e. Capital One, Discover, etc.), highlight the Vendor and click Change. At the bottom of the first column you will see a field called Report Flag. Change that to C= Credit Card. 

Credit cards usually have a set day of the month that payment is due. For this example we'll assume that the 15th of every month is that date. There's also usually a specified day of the month for the end of the billing cycle: for this example we will say it's the 29th.   

Under the A/P detail section on the top right of the vendor setup screen you will see two fields called Days till due and Last day for invoice. To match our example put -15 for the Days till due and 29 for the Last day for invoice field.   Now when you use your credit card vendor it will automatically fill in the correct due date. You can always override the due date when recording the A/P if you are not paying your balance in full or have other payment arrangements, but by filling in these two fields it will make it much easier to reconcile to your credit card statement!  Make sure to save all changes made to the vendor file.

Credit Card Vendor Setup
Credit Card Vendor Setup Screen.

When you record a credit card A/P entry first select the Vendor you have flagged as a Credit Card Vendor by pressing the Enter button on your keyboard; the screen will bring up a field called Actual Vendor. (If you click Tab instead of Enter you will not see this field.) After selecting the Actual Vendor continue to complete the A/P as normal with the correct Ledger, Center, Division, Amounts, etc. and save the entry. 

In the sample screen below the date of the credit card transaction is May 20th which is before the Citi Card vendor's Last invoice date of the 29th so TransAction Plus automatically makes it due on June 15th based on the Days till due date in the Vendor Setup screen. If you select a date of 5/20/13 it will make the due date 07/15/2013.  

Credit Card AP
Credit Card A/P Entry includes "Actual Vendor."

Reconciling your credit card statement can be done two ways.

  1. Go to Input | A/P and A/R Payments | Pay A/P Entries and enter the Due Date for your current billing cycle, then select the Credit Card Vendor, check the box to Search by due date and click OK. This will bring up all of the current charges for the credit card.   It will not show the Actual Vendor but will display the Date and Amount. Through this process you can reconcile and pay the credit card in one step.  
       
  2. The second way to reconcile is to run an A/P Detail Report found under the Accounting Reports for the entire billing cycle for the Credit Card Vendor to view more complete transaction detail.  At this time the A/P Detail Report does not select on or display the Actual Vendor but this should be added in the next month or so. Currently the only report that displays the Actual Vendor is the TransAction Plus User Defined Report.  Run that report for the Credit Card Vendor and you will find the Actual Vendor in theLong Description column.

  

         Sincerely,


         FBS Systems

 

 

Follow us on http://www.fbssystems.com/CMS/UI/Modules/BizBlogger/rss.aspx?moduleid=880938