Understanding cashflow and profitability when using farm management software
The cost of farming has doubled over the past decade. The days of sifting through multiple files and places in search of field data, crop and marketing plans and financial statements is simply no longer a viable or time efficient option for today’s farmer.
“I was frustrated because of the way I was keeping track of my data,” recalls Wetaskiwin, AB. farmer Dean Nelson. “I have about 20 different spreadsheets, and I always enter the data at the end of the year. I would be trying to remember back to when I did something, using Google calendar to enter it, and I had stuff all over the place.”
Becoming increasingly dependent on quick access to all his farm records to make timely and strategic decisions, Nelson turned to a farm management software solution. He now enters all his data and information into one place that he accesses and shares from any device. It’s a solution many farmers are turning to for a more comprehensive understanding around what it truly costs to run the farm and be profitable.
The importance of good record-keeping
As every farm is unique, the best determinant for expectations and planning is your own historical data. This includes tracking and storing your information around yield, seeding and input costs, production and marketing. Easily comparing the gross margin and actual profitability for each crop across your farm depends highly on accurately captured and conveniently accessible data.
Good record-keeping is the basis of farm management planning and execution. When all your data is easily accessed and compared with the right farm management software, tracking and identifying trends, red flags and opportunities is enhanced. Working off your favourite device, it facilitates better decision-making on daily issues before they become critical, better management of your costs while increasing production as well as elevates longer-term planning and analysis around your entire operation.
Understanding your farm’s financials
Farm data, including cost breakdowns, profits, and financial statements, is the foundation of managing your farm’s profitability. As the cost of doing business continues to rise, it’s never been so important to clearly understand your operational cash flow. Knowing how much is required to cover all your expenses – aka your breakeven – and turn a good profit is a must. The breakeven number is unique to each farm and that’s why turning to your own records gives a clear perspective around both your situation today and what’s to come.
By using farm management software, you can easily see what’s happening in every crop, field and bin while comparing gross margins with actual profitability, which minimizes surprises.
“What I love about [this farm management software] is that my data – my contracts, bin storage, fields – is in one place available on my phone,” says Nelson. “In a blink of an eye, I can find what I need.”
You’ll also up your crop marketing game. At the click of a button, you can track your profit and time triggers and receive alerts when targets are reached. Discover how changes in prices, yield and contract scenarios will affect your overall profit margins while also capturing time-sensitive market opportunities. Easily record price-influencing factors such as protein content, yield and quality in one place – shared and accessed by your farm team – all while you’re on-the-go.
Make informed decisions
Farm management software is designed with the understanding that you often make informed decisions on-the-fly – and removing guesswork from the equation is essential to your bottom line. By accurately capturing all your farm’s data, these technologies make for stronger analysis, review and communication. From any device, your entire farm team – yourself, your family, hired help, agronomist, accountant and beyond – is on the same page at the same time. You’ll improve your comparison of costs, yields, sales and future projections, better monitor daily workflow and plan for a more successful future.
That real-time access to all the farm’s management, agronomic, marketing and financial information has changed things for Nelson Farms.
“Basically, everything I was doing on different spreadsheets is now all in one spot, which makes tracking my information nice and easy,” says Nelson. “Now I can enter my data in real time, it’s right, and I can use it year-round.”
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