August 2017
The Business of Farming

QuickBooks for Farmers Extension Classes

A two-night class offers solutions and discussions on farm bookkeeping.

It’s an early summer night at Pell City Civic Center and the gym is noisy with kids playing basketball. However, in a small meeting room next to the reception desk, there’s a different group gathered to talk about farm recordkeeping. In this small group, there are poultry, goat and commercial gardening producers and spouses. Some producers are already using QuickBooks and others have never seen the software before. Each person wants to learn how to keep accurate farm financial records for their unique farm operation. Many of them come into class knowing they really need some help to clean up their existing financial records.

As their instructor, I show them that, if they can fill out a check register, they can learn how to keep a good set of financial records in about two hours per month using QuickBooks. Two hours a month doesn’t seem like a lot of time to the group, even to producers routinely working 60 hours a week or more. I also show them that, whatever data entry errors they have made in the past, we can correct them and generally find ways to improve what they have learned by trial and error.

Thanks to the 23 years of the now-discontinued Alabama Cooperative Extension System Farm Analysis program, we have a well-established accounting system adaptable to virtually any farm operation. We have a standard chart of accounts farmers can use to pick and choose the extra accounts they need for their farm, in addition to the startup chart of accounts.

In our classes in DeKalb, St. Clair, Lawrence and Limestone counties, we covered sample farm entries from actual farms. After students saw the examples, they started asking questions for their specific farms. For example, one farmer wanted to track repair costs on one particular piece of equipment. The answer was to set up a repair subaccount for that tractor and add explanations for each repair item in the memo line of the entry.

However, the most powerful example was for farmers to start using Enterprise Accounting. The Auburn University National Poultry Technology Center and Alabama Extension are working together to help poultry farmers with specific profit-and-loss reports for poultry operations, while also having accurate, separate profit-and-loss reports for row crop and/or livestock operations. To get these Enterprise reports, it’s a simple matter of turning on a couple of QuickBooks options and taking about 10-15 additional seconds on each check entry or bank deposit entry to add more information. Those extra 10-15 seconds per entry make a gigantic difference in the quality of farm financial reports available to producers.

To learn more about Enterprise Accounting and QuickBooks for Farmers classes, please visit the ACES website, www.aces.edu, and sign up for a class near you in 2017.

 

Robert Page, CPA, REA II, is a regional Extension agent with Farm & Agribusiness Management.