Have you included everything in your year-end balance sheet? Blaine Carey, an instructor with the South Dakota Center for Farm and Ranch Management, Mitchell, S.D., has this 10-point checklist to follow:
1. Don’t forget to add checks written in the prior year that may not have cleared on your year-end bank statement.
2. Keep track of all pre-paid crop expenses, as they are considered liquid assets even though they may be not be easily sold for cash.
3. List all deferred grain and/or livestock checks.
4. Differentiate unpriced grain from contracted bushels and use the closing price from the grain terminal which you most likely will deliver those bushels. It might be tempting to use a higher price if the grain market has rallied since Dec. 31, but that action is not advised unless you actually locked-in those prices.
5. Get as accurate as possible on estimating tonnage of feed on hand. There is quite a bit more variability in determining a value of these products due to quality issues, so getting a good handle on the quantity is important.
6. Tally an accurate head count of market livestock, and then use your best judgement to determine an average weight for the different groups. Use the best resources to calculate an estimated market price but, once again, be careful not to overinflate values.
7. If you have open positions in your hedging account, make sure you include the market value of the account and not the book balance.
8. Remember to list outstanding receivables, but only if you anticipate collecting them within the next month or so.
9. Verify outstanding current loan balances and accrued interest as of the year-end close of business.10. Include any large bills that were not paid in the prior year.
Source: South Dakota Center For Farm/Ranch Management