Consistent communication with accountants is vital for farmers

By Emily Zuver

For farmers, who balance a myriad of unpredictable elements ranging from weather patterns to market demand, financial stability is the key to success. This is why it is so crucial for farmers to maintain a steady dialogue with their accountant throughout the year. Not just at tax time. This month, we look at some of the top reasons farmers need to always keep their accountant’s contact information handy.

Tax planning beyond tax season

The common misconception is viewing accountants solely as tax advisors. However, their proficiency lies in strategizing tax planning throughout the year. By being proactive and engaging with accountants even during off-peak seasons, farmers can manage tax liabilities, leverage incentives, and streamline tax returns effortlessly. Also, communicating with your accountant about equipment or land purchases and sales, when acquired, will help alleviate the rush at year end to obtain this pertinent information.

Budgeting for the unseen and unforeseen

Agriculture is renowned for its seasonality and inherent unpredictability. Therefore, year-round budgeting is not about arithmetic but about foreseeing the unseen. An accountant’s year-round involvement aids in building a flexible, responsive budget that can accommodate fluctuations in the market, crop yields, and unforeseen expenses.

Cost monitoring and mitigation

By maintaining a dialogue with accountants, farmers can identify areas of cost accrual and proactively work towards mitigating them. Accountants can develop cost-benefit analyses of new technologies, equipment, or methods that may improve efficiency and reduce operational overhead.

Revenue recognition and forecasting

Understanding revenue streams is as crucial as it is complex in farming. Regular consultation with accountants allows for a clearer understanding of when and how revenue is recognized. This comprehension is pivotal for financial forecasts and making timely adjustments to sales strategies or inventory management.

Structuring for growth

Through strategic counsel, accountants help in establishing the optimal structures, whether incorporating the farm, forming partnerships, or creating trusts. Such decisions have implications for farm liability, taxes, and access to capital. Continuous collaboration ensures that the chosen structure continues to align with business objectives and changing circumstances.

The moral of the story is to stay connected with your accountant. They want to see you succeed and they want to answer your questions, no matter how small or large.

Emily Zuver is the Senior Assistant Accountant for Holbrook & Manter, CPAs. 

Leave a Reply

Your email address will not be published. Required fields are marked *