June and July are the acid tests for farm record keeping. Have you been able to make time to enter income and expenses? Have you taken time to study a report? Have you talked about a report with someone else from the farm?
Recording transactions is the chore. Writing down each check and each sale, or day’s sale. Creating a report with a manual system is another chore. Creating reports with a computerized system is the big benefit of a computerized system.
Manual systems. The ‘yellow farm account book’ is set up for dairy farms, but I have seen other types of farm use the book by a little white out here and there. The real name of the book is New England Farm Account Book Number 2. UVM Extension offices have it, it costs $10, plus postage of $3. University of Maine Extension publishes a blue Farm Account Book that has blank column headings for income and expense, making it more flexible. It is available from Melissa at UMaine, at 207-581-2788, for $10 plus $3 postage, or email her at . I have seen farmers use Dome account books, and also lined paper in a 3-ring binder (one page for each income or expense category- say all the cattle sales on a page, and all of the utility expenses on a page). All of these manual systems are easy for recording, but it takes time to make a good report.
Computerized systems. Some farmers use Excel- it is pretty easy to create a workbook to record, but again, reporting can be a challenge. You can put many hours into getting it set up right. Quicken and MS Money are cheap programs that need to be tweaked to set up a good Chart of Accounts for a farm, but they have many good reports. Ohio State has bulletins for setting up Quicken for farm use, http://ohioline.osu.edu/b931/index.html. Each chapter is a pdf file. Quicken does not do invoices. The next step up is Quickbooks, it costs a couple of hundred dollar or more, depending on what you need- invoices, payroll, etc. Quickbooks also has many good and easy reports. Yankee Farm Credit will come out to your farm for fee to get you set up properly the first time, www.yankeeaca.com. Some tax preparers and accountants will do the same thing. Some farmers find it very helpful to have someone come to the farm, install the program, give them some training, and be available on the phone for questions. There is a book, the Quickbooks Farm Accounting Cookbook that can be helpful, www.goflagship.com.
No matter how you keep the books, keeping up to date is important. And looking at reports to try to understand how the farm is doing financially is the most important thing of all.