Last editedOct 20222 min read
Farming is a unique business. For one thing it relies on living produce, and then there are the many regulations, dependency on weather and various liabilities to consider. As with any successful business, farming requires a certain degree of financial smarts, and accurate accounting is a large piece of the puzzle. This is particularly true in an age where more and more farmers are relying on the internet to do business.
Farming and accounting are not obvious bedfellows but thankfully, several accountancy software options automate most of the complicated parts of the process. Since the agricultural sector is a seasonal business, there are even more complications to consider, most of which are accounted for by the software below.
While it is not developed specifically for farming, using Xero as farm accounting software is an ideal match that can be tailored to meet any accounting needs. A cloud-based platform that’s incredibly easy to get to grips with, it can be controlled from your smartphone with complete remote access – ideal when you spend more time working the fields than sitting behind a desk.
If you’re unfamiliar with bookkeeping and other accountancy tasks, Xero’s automation tools are best-in-class and comfortably take care of everything from VAT returns and expenses to payroll and financial analytics. It supports several currencies and tax rates too, which might be handy if you export your goods.
Another cloud-based accounting solution giving access to your accounting records from wherever you are, QuickBooks is a great option if you have a larger accounting team as it lets you collaborate and share data without using a remote server. The most obvious benefit of QuickBooks is how customisable it is.
Reports and charts can be customised to offer real-time insights, letting you make reactive business decisions, particularly relevant in the world of farming where there are several wheels within wheels that can change things at a moment’s notice. You can easily set it up with other farm management software too.
As the name suggests, FarmBooks is a more affordable accounting software solution geared specifically toward the agricultural sector. It’s a desktop-based platform that includes reporting features uniquely based on running a farm and includes all the features you expect from accounting software, such as invoicing, asset management and payroll management.
While it offers remote support and can back up your data, FarmBooks is solely a desktop solution. This means it lacks the immediate backup security and ‘access it anywhere’ flexibility offered by Xero and QuickBooks. For smaller farming operations, FarmBook might suffice but for larger farms, it might not be a practical choice in this day and age.
Considerations for farm accounting
As farming is a unique business, there are a few specific considerations you might need to make when choosing your farm accounting software.
Your land is perhaps your most important asset and that means the costs of maintaining and nurturing your land should always be considered in all accountancy measures. This includes everything from the cost of fertiliser to weed removal, pest control and even drainage and soil management.
Farming is an industry that the UK needs to comfortably feed itself. As a result, you might be entitled to several government subsidies. If they are made as direct payments or if you need to pay tax on them, these subsidies need to be accounted for as part of your financial planning.
Measuring profitability on a working farm isn’t straightforward. Stock is always fluid as animals breed and die, and there are seasonal changes in land use and demand to account for. This means using various methods for tracking profitability that might not naturally work well together.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with.
You might invoice dozens or even hundreds of different businesses and individuals every month, so it also allows you to collect invoices automatically with you in control of the payment amount and date.
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