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February 3, 2023
by Harlee Kilber
As we continue to transition to a new year, there are a few important things to keep in mind. Taxes will need to be completed, operating loans obtained and a solid plan for the year developed.
Although it may seem daunting, the North Dakota Farm Management Education Program at various colleges across the state can assist you in setting yourself up to succeed. Learning how to keep accurate records and finding useful tools to run a successful ag-related business are just a couple things you can learn from this program.
Each year, several questions are raised. How can I be prepared for tax season? How can I get more organized with my receipts? Let’s find some of the answers to those questions.
Throughout the year, it is good to keep the following items for your records:
checking and savings balances
prepaid expenses and supplies
grain and feed inventories
When looking at recording income, it is helpful to document crop, livestock and personal income. When recording expenses, it is good practice to record all expenses for both the farm and the family. These expenses can be easily separated within Quicken and QuickBooks.
The North Dakota Farm Management Education Program provides individuals with the tools and knowledge to compile accurate records. Why is this important? Producers run a business, and good record-keeping helps to plan and forecast the year.
Lenders, government agencies and insurance companies may require records of income, expenses or production records before approving a loan or signing producers up for certain agricultural programs.
In this two-course program, producers work hands-on with personal finance management tools, such as Quicken and QuickBooks, to manage their budget and track income and expenses. Instructors help ensure that income and expenses are categorized accurately.
Instructors and students also have access to Finpack, a financial accounting software specifically designed for agriculture businesses to see an in-depth financial picture of their operations. It assists in making informed management decisions about your future, as well as analyzing how your operation is doing with ratios that can be compared to other operations in your region.
In addition to software programs, the program provides training using Farm Service Agency-approved documents that producers can use to track their income, expenses and production histories.
Farm educators can use those histories to project how the next year will go and whether the business will make or lose money. They can factor in capital purchases and sales, and see how yield changes will affect your ending margin.
Although it may seem like a laundry list of items, accurate record keeping will save you time and money. It will allow you to understand your operation better and see where you can improve your business.
If interested in the Farm Management Education Program at Bismarck State College or any of the other institutions across the state, reach out to your local North Dakota Farm Management Education instructor near you. For program details and instructor contact information, visit ndfarmmanagement.com, or contact Craig Kleven, state supervisor for ag education, at [email protected] or 701-328-3162.
Kilber is an assistant professor of farm management at Bismarck State College.
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