What is Agriculture and Farm Accounting Software?
Farms, ranches and other agricultural entities have unique requirements that require more criteria than basic accounting programs. For example, perishable or livestock inventory must be tracked within agricultural accounting packages, including births, deaths, birtfh weights, and weaning weights. It should also be able to keep track of inventory in multiple units of measurement depending on the type of crop or commodity. Multiple farms can often be tracked within the same solutions package for larger-scale operations.
In this guide, we'll cover:
- The accounting software functionality important to those in the agriculture industry;
- How to evaluate aggriculture accounting software; and
- How to determine which type of accounting software best suits your type of business.
As well as the core ag modules like payroll, accounts receivable and accounts payable, farm bookkeeping software may have some or all of the following features:
|Crop/Livestock Inventory Management||Agricultural software should track the additional data needed for farms and ranches, including seeds planted, fertilizers and chemicals used, livestock parents/birth weights, etc. This will in turn support PTI compliance and feed into the sales and grower accounting systems.|
|Warehouse Management||Farming accounting software should also manage the inventory for fertilizers, chemicals, seeds, heavy equipment, the receiving, pallet and case labeling, re-packing and pick ticket management.|
|Ag Ratio Analysis||Grower reports analyze the percentage of crops planted to yield produced, so you can price accordingly, identify best practices, and increase yields for future seasons.|
|Breeding & Growing Calendars||Agriculture is a highly seasonal industry, and so much depends on the time of year, the age of the animal or crop, and the products used to support its growth. A farming software solution may include a calendar to track actions like planting, fertilizing, spraying for pests, harvesting, gestation, births, weaning, etc.|
Evaluating Agriculture Accounting Programs
Agriculture-specific solutions should be able to handle the wide variety of agriculture costs. Providing crop break-even analysis in consideration of fertilizer, chemicals, seed, and rent on land by individual field, acre or bushel is crucial for a precise agricultural accounting resource. The appropriate solutions package will also come equipped with farm industry standard ratios to gauge financial efficiency with respect to the agriculture industry.
When evaluating agriculture and farm accounting software, buyers should consider the following:
- Does the system support agricultural inventory types?
- Are the appropriate industry standard ratios included in the software?
- How many different farm operations can the program support?
- Can the system forecast based on hypothetical environmental conditions?
What Type of Buyer Are You?
Before evaluating your options, you must determine what type of buyer you are. We’ve found that more than 90% of buyers fall into one of these three categories:
- Small business buyers. These small farms are on the verge of upgrading basic systems, like QuickBooks, to support more sophisticated agriculture-specific functions like forecasting, product management and ratio analysis. As ranches and agriculture entities reach a certain size and require advanced functionality to grow, businesses will need to upgrade their systems.
- Enterprise buyers. These buyers represent farms and agriculture organizations that need the functionality of a full enterprise resource planning (ERP) suite for a large entity. Seamless integration is usually more important than specific features; however, there is considerable differentiation in both of these areas, and buyers should examine both. Sage and Microsoft Dynamics are two of the largest vendors for ERP and offer sophisticated systems.
- Best-of-breed buyers. These buyers need stand-alone software solutions for specific functions. For instance, while agriculture organizations need systems for core functions like payroll, they also need programs with specific features for inventory management or crop/livestock ratio analysis. These buyers may seek a product that has deep functionality in one of these application areas rather than a full financial planning suite.