Red Wing Software has been developing agricultural accounting software for more than 30 years. We talk to many people each week, who are using a basic, non-agricultural, off the shelf accounting system to manage their agricultural operation. There are distinct benefits to using agriculture-specific accounting software. Here are three key reasons to make the switch!
Understand true crop and livestock costs.
Do you know which of your enterprises are generating the most profits? Knowing where to focus is the key to increasing your profits. By using an agriculture-specific tool called production analysis, you can get detailed crop and livestock information on a cost per unit basis. You can use this information to make changes where they are needed, and make better decisions about how to increase your profits.
View meaningful information, and provide it to others.
A good agricultural accounting system can provide in-depth financial analysis with the ability to structure and segment entire operations, accounts, profit centers, and inventories to track data, combine entities, and get relevant farm reporting. This not only helps you see the data the way you need to for your farm, but it also gives you the ability to provide others with the information they request of you. Surely, you have been required to provide information requested by your bank, consultants, landlords, managers, and others. Tracking detailed information about your farm helps you pull together the information that is requested of you by those third parties.
Be more confident about your farm’s financial future.
An agricultural accounting system is more than just a place to organize your data. You can use the data you enter to project future sales and create ‘what if’ scenarios that help you make sound financial decisions about your future. Instead of making a decision to buy an expensive piece of equipment based on how much you have in your bank account, you can take your whole financial picture into account. This leads to better decisions and more profits!
The decision to move to agricultural accounting can be a tough one, but keep in mind that the benefits to your farm can far outweigh the time it takes to select a system and get it implemented. You’ll be on your way to a better understanding of your business, and a way to stay ahead of your competitors!