Farm RecordkeepingSHANNON DILL

UNIVERSITY OF MARYLAND EXTENSION

SDILL@UMD.EDU

Objectives:•The importance of farm records

•What farm records to keep• Personal• Production• Financial

•How to manage farm records• Excel• Quickbooks/Quicken• Apps

Recordkeeping

Proof – The IRS may ask for revenue, expenses and inventory items

Decision Aids – Records help with making decisions on purchases, employees, enterprises etc

Institutional Requirements – Lending agencies, FSA, crop insurance require production and acreage reports

Environmental – Nutrient management, pesticides, bio-solids, irrigation all require records “Good records do not ensure

your farm will be successful; however, success is unlikely without them!”

Personal Records•Record to keep and never throw out – These are permanent record

• Tax returns, legal documents, vital records, retirement, investments, etc

•Business records – need a permanent file• Financials, legal documents, licenses

•Tax records for 6 years (Min)• IRS can go back 6 years to audit

•Everyday paperwork – 3 years• Monthly financials, credit card statements, utilities, medical bills

•Uncategorized• Car (keep until sold), credit card (until reconciled), Policies/warranties (until they expire)

Have a shredder or use community shredding services

http://www.smead.com/hot-topics/records-retention-guidelines-1394.asp

General purpose guidelines and do not include unusual or extenuating circumstances

Keeping Farm RecordsThree basic types of farm records:

1. Resource inventories

2. Production accounts or livestock and crop operations

3. Income and expense records

Resource InventoriesCount and assign value to your resources and equipment on your farm

Resources include:◦ Assets: Items you own◦ Liabilities: indicate what you owe

Why? Inventory◦ Determining your net worth – Balance sheet◦ Computing noncash expense, such as depreciation◦ Assists with taxes, insurance, and purchasing decisions

- Might add original purchase price- Tag Number, VIN number, serial or id

number- Include EVERYTHING – machines,

implements- Photos

- May also include the expense to build and improvements- Photos

Production RecordsUsed to measure and report the performance of crop and livestock enterprises on the farm

Crop records include:◦ Soil conditions, cropping patterns, field layouts, and building locations◦ Crop rotation, varieties, yields, fertilizer rates and pesticide applications

Livestock records include:◦ Subsection for mortality, breeding, performance and feed information

Labor records include:◦ Amount and timing required per operation

Why? – Taxes, insurance, regulations, pricing, decisions, production expenses

Sample Sheets for Grain Crops

Production RecordsCROPS

Production Schedule

Crop Insurance

Fertilizer

Pesticide

Certifications

Projections

Sales

LIVESTOCK

Breeding

Health

Sales Projections

Actual

Manure

Mortality

Feeding

Water, Electric, Temperature, Projections/Actuals, Enterprise Budgets, Inventories

Create - Projected and Actual

Create - Projected and Actual

Financial Records•Enterprise (Crop and Livestock Budgets)

•Financial Statements• Balance Sheet, Cash Flow, Income Statement

•Categorize expenses by IRS (at minimum)• Publication 225, Farmer's Tax Guide, https://www.irs.gov/forms-pubs/about-

publication-225• Schedule F (Form 1040), Profit or Loss From Farming,

https://www.irs.gov/forms-pubs/about-schedule-f-form-1040

•May decide to break into additional categories – example – insurance –home, farm, auto, liability, OR by crop or classes – poultry, crops and custom services, or spring crops, summer crops, fall crops,

Budgets by Enterprise

•Per acre, bushel, head, lb, dozen, square foot……..

- Impossible to create without records and other spreadsheets or charts

- Example – need labor information to complete line 13, need production costs to complete 8,9,10, Need a marketing budget to complete line 18

Managing Farm Records•So many types of records that can be kept

•Need to make decisions on what records are necessary and those that are helpful to your farm business

•Need a way to organize – find information and quick/easy to use

•Computer options• Microsoft Templates• Excel• Quicken/QuickBooks• APPs• Other – Some farm software hitting the market

Templates https://templates.office.com/ or click NEW

Excel•Organized, Formulas, Graphing

•User ideas• HELP – count, weighted averaged, percent change• Create – Workbook with worksheets• SAVE AS – NEW_9_26_2018• Copy functions• Filter function for headings• Graphing

QuickBooks/Quicken•Manages accounts payable/receivable

•Has payroll features (version)

•1099 feature

•Schedule F

•Easy to reconcile & produce reports

•Enterprise accounting

•Will write checks

•Generates financial statements

•Creates invoices

•Maintains list of vendors and customers

•Manages lines of credit and credit cards

•Cloud based

•An many more

Apps•Play/itunes store and read reviews

•Over 500 apps listed• https://www.farms.com/agriculture-apps/• Categorized

•No one notebook, software or app will meet all your needs! Most use a mix of written and electronic.

Shannon Dill University of Maryland Extension – Talbot Countysdill@umd.edu410-822-1244