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By Brian Ravencraft
Just how meticulous are you about keeping detailed records for the finances for your farm? Most folks I work with do a decent job, but when you kick it up a notch you can really see the benefits that excellent record keeping can provide.
Good record keeping starts with — but goes far beyond — tracking every dollar coming in and out of your operation. You should certainly be tracking where you are spending your dollars and where the dollars coming into your business are coming from. Be sure to keep all receipts and invoices and keep business and non-business expenses separate.
Reviewing and keeping your income statements and balance sheets is something you should be doing every month, all year long. Your income statement shows you your expenses and income over certain periods of time and your balance sheet lays out your liabilities, assets, and equity during at certain points in time as well.
The things outlined above are really just the basics you should be doing as your look to keep your farming operation compliant and financially successful. According to the IRS website, good business record keeping can assist you in the following:
- Monitor the progress of your business
- Prepare your financial statements
- Identify sources of your income
- Keep track of your deductible expenses
- Keep track of your basis in property
- Prepare your tax returns
- Support items reported on your tax returns.
Having a good accountant by your side will allow you to map out your expenses and grow your business at an even faster rate. We can do so much more for you than the basics. Reach out to me today for more information or if you have questions. I am always happy to help.
Brian E. Ravencraft, CPA, CGMA is a Principal with Holbrook & Manter, CPAs. Brian has been with Holbrook & Manter since 1995, primarily focusing on the areas of Tax Consulting and Management Advisory Services within several firm service areas, focusing on agri-business and closely held businesses and their owners. Holbrook & Manter is a professional services firm founded in 1919 and we are unique in that we offer the resources of a large firm without compromising the focused and responsive personal attention that each client deserves. You can reach Brian through www.agribusinessaccounting.com or www.HolbrookManter.com.
