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Top 10 “To Do” Items for Your Farm Business This Year

January is always a good time to “start fresh”, tackle farm business projects we have been putting off, and plan for the year ahead.

Here are 10 Things to do for your business this year:

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1.  Review your will (or get one!)

Of course no one wants to think about their death, but having a will is critical in protecting the future of your business and your family. Who will take care of things if you should pass? Will the business be passed on to others or sold ?
If you already have a will, when was the last time you reviewed it? Have things in your life changed and is your will up to date with all your current assets ?

2.  Review insurance policies

Another task that can easily be put off. This may include health, life, or farm insurance.   Likely it will only take a few minutes of your time, but it is time well spent should something ever happen to you or your farm!

3.  Review your payables/receivables

This is the first step in preparing your yearly budget. Take the time to go through your bills, loan statements and other accounts to make sure you know what you owe and of course what is owed to YOU !

4.  Finish up year end financials (if your year end is Dec. 31st !)

Congratulations to you if you happen to be one of the few people who have all their year end financials in order!   If not get busy and get them cleared up so you can start the year fresh, knowing your books are up to date .

5.  Do production plans for the coming year

This will vary a bit, depending on what you produce. It may include grazing, crop, breeding or forage plans.

6.  Prepare a financial budget

I know you all just groaned to your selves at this one. Preparing a budget can seem overwhelming but it can be quite simple if you have the right tools.    If you need some help with this one don’t be afraid to ask for support !

7.  Figure out every business members goals for the coming year

Sometimes we get so busy thinking about the future of the business that we can forget to check in with the family and co-workers to hear what their own goals, plans and challenges are. As we start a New Year, why not sit down and listen to the needs of the people within the business!

8.  Set goals for your business

Slightly different than our personal goals, these are goals for the business as a whole. Are their changes you want to make, targets you want to hit in regard to production or finances?   How will you do that?

9.  Figure out your cost of production

Do you know how much profit you are making for every unit produced? How much is that cow really making you, or how much are you profiting from the bushel of wheat?

10.  Take a vacation!

No kidding. No one can work ALL the time and stay happy and healthy. Everyone needs to re-charge so we can operate through those busy months with energy and enthusiasm. Even just a weekend get away, or a night a week doing something you love can make all the difference to the success of your business.

This may seem like a lengthy list, and you probably won’t achieve all of these things overnight.  Over time though, remembering to have these key elements of our business in order will support us in creating a successful future.

All the best to you in the coming year!

Jen

 

Preparing for an Accountant in your Farm Business

Questions Accountants Will Ask You In Their Office:

Already In Business

1)  Client’s track record with business

2)  Past tax returns

3)  Past financial statements

 

Never In Business

1)  Find out the need to register for GST

2)  Incorporate or not

3)  Selecting year end

 

Generally the first meeting with an accountant will be to educate the client and the accountant.

 

How To Be A Good Client: Things That Bug Accountants

  1. Be open with your accountant-tell them everything they need to know or you think might be important.
  2. Don’t hold back any information-be willing to communicate.
  3. Be organized with your records
    • Don’t bring in a mashed up hard to read receipts and paper
    • A shoebox is not the worst thing you can do to your accountant
    • The worst thing you can do is mix up business and personal expenses together
  4. Book appointments-don’t just show up.  Accountants like to be prepared when you talk with them.
  5. Pay your accounting fees promptly!
  6. Writeoffs.  These can be very gray.  Some accountants will be more aggressive than others.  The accountant doesn’t have the time to determine the validity of every receipt they look at.
  • the accountant will go be what is reasonable
  • you will have to be able to defend any expenses

 

The biggest mistake accountants see is people not filing on time!

Copyright: Freedom Investment Club 2005

Finances can be messy! Have trouble organzing your stuff? Read on to find out how to create a financial snapshot.

Hiring an Accountant for your Farm

How Accountants in Agriculture Charge

  1. Hourly – Usually charge between $90/hr-$150/hr, depending on the complexity of the job.  The vast majority of accountants actually work on an hourly basis.
  2. Value Driven – When the job will be time intensive and the accountant may get a contingency (cased on sales or revenues)-this is rare.  Also, if you bring the accountant a showbox, they may chare you a flat fee to get everything sorted out.

The cost to prepare a return can vary widely, depending on whether you bring a shoebox of receipts or very good records.

The typical corporate tax return will cost between $1000-$2000 to file.

 

Three Kinds Of Agricultural Accountants

  1. CA (Chartered Accountant)- Work in public practice (giving advice to clients) or in industry.
  2. CMA (Certified Management Accountant)- Work in industry (for a company) managing their books.
  3. CGA (Certified General Accountant)- Will generally work in public practice, may specialize in certain area.  Similar to a CA, generally have clients that run a smaller business.

 

Does Size Matter?

Depending on your situation, this type of firm will fit you best:

Owner-managed-company:  Small Firm

50+ Employees, $20 million annual sales:  Medium Firm

Publicly traded and multinational companies:  Large Firm

 

Questions To Ask Your Accountant Before Hiring:

  1. Should I incorporate?
  2. Do you specialize in any area?
  3. How big is your firm?
  4. What kind of clients do you deal with?
  5. Any Industry Knowledge?

*Most importantly trust your gut and choose someone you have chemistry with and can trust. 

 

Questions Accountants May Ask You On The Phone:

  1. What type of business are you in?
  2. Is your business making money or losing money?
  3. What is your family situation?  The accountant will be looking for income-splitting ideas.
  4. How capital intensive is your business?
  5. Are you going to register for GST?

Asking the accountant how they deliver their service and explain things to you is very important!

 

Copyright: Freedom Investment Club 2005