According to Scott Stiles, extension economist at the University of Arkansas, “Virtually everything you do on a farm can be converted into data. When you don’t fully measure and record this data, that valuable information is lost forever.”
In addition, properly organized farm records can be used for analysis and planning as well as generating all the documents that are required for insurance, taxes, financing and regulatory purposes.
Software available now, allows a producer to utilize information specific to their business to aid in decision making. Current software has built in error checks/warnings that will ask the producer questions to confirm they really want to use a particular piece of data that was entered.
One commonly used software program is FINPACK. This software was developed and is supported by the Center for Farm Financial Management at the University of Minnesota. It is a farm management software package that helps producers evaluate their financial situation and compare alternative plans or projects.
“It is not necessarily a record keeping system – although multiple years of financial statements (balance sheets, cash flows and budgets) can be saved and used for multi-year trend analysis,” Stiles said. “FINPACK is best described as a tool that helps farmers and ranchers effectively use their records in managing their business.”
Another commonly used product is FINBIN. FINBIN is one of the largest sources of farm financial and production benchmark information in the world. “FINBIN contains detailed reports on whole farm, crop and livestock financial information,” Stiles said. “The database summarizes actual farm data from thousands of agricultural producers who use FINPACK for farm business analysis.”
There are a variety of software packages, for any size budget, that can create reports for virtually any purpose, from taxes to regulatory requirements to financial analysis, Stiles added.
“Overall, I believe a farm-based financial analysis program can provide farmers more insight into their business and improve communication between them and their financiers,” Stiles said.
There are thousands of different farm and ranch management software options available. “The costs can range from ‘free’ downloads to a few thousand dollars. Generally the best references come from other farmers, ranchers and perhaps accountants that are already using farm management software. Existing users can be good sources of advice regarding the ‘pros’ and ‘cons’ of a software package.”
Regarding computer requirements, FINPACK will need Windows XP, Windows Vista or Windows 7.
The availability of support and training should be a deciding factor in selecting a farm business software package.
