Record Keeping – What Does It Mean To You?
Lots of people make New Years Resolutions. This year, consider including better record keeping on this list. The first question to ask yourself is: what do I mean by record keeping? Would you like to keep better production records? Better Prepared For Taxes? Comprehensive financial analysis / planning? I encourage you to focus on all of the above! In general, allow time for record keeping.
There is a time commitment in this process. Consider making record keeping a routine part of your week. You also need to determine what information is economically feasible to collect. Time is money after all, and the level of detail needed may vary from transaction to transaction. Once you have the records, it’s important to actually use that information for the decision-making process. Simply completing the records is only the first step. You should use the trends to improve your operation. Also, be aware of your obligations. If you are enrolled in an FSA program or have a grant, make sure that the record-keeping approach you take meets these requirements as well.
A cow-calf producer who chooses a production record keeping method should consider the level of detail he wishes to collect regarding cow information, sire information, calf information and herd information. . In addition, you must take into account the computer requirements of the software and other additional considerations specific to your operation.
Some software will only work if you have entered all the required information. For example, if the software requires a weight and you do not have a scale, it is probably not a good option for your operation. We have several resources to help you keep your records. For cow-calf producers interested in production recording software, I would recommend checking out the current report 3279 “Cow-Calf Production Recording Software” (https://extension.okstate.edu/fact-sheets/cow-calf-production-record-software.html). This current report is a bit older, so software prices may have changed, but it’s a good place to start.
Taxes are a motivating factor in record keeping for many producers. It is important to note that tax management is only one part of farm management, and reducing taxes should not be the only goal. However, any type of record keeping can be a good start to a financial analysis. We are currently working on updating the materials on one option – Quicken. Watch for updates to the OSU Extension website and an online course at https://extension.okstate.edu/programs/farm-management-and-finance/quicken-for-farm-financial-records/quicken-for-farm-ranch-records-manual.html.
If you are interested in receiving help developing a start and finish balance sheet, leading to a whole farm financial balance sheet, we currently have a farm finance program available. The program is free for personal use and $ 150 if used to meet FSA borrower education requirements. More program and registration information can be found on the OSU Extension website at https://extension.okstate.edu/programs/farm-financial-planning-assistance-and-benchmarking/index.html. Whether you keep simple paper records, use Excel, or invest in dedicated software, record keeping is a valuable habit.