FINANCIAL DEEP DIVE
Some of the most important activities for a farmer are keeping and using financial records. From understanding the meaning or purpose of financial tools (like Balance Sheet, Accrual System, Business Plan, Market Analysis, and more) to keeping the books, farmers often struggle with this end of their business. We hope this deep dive into bookkeeping and financial analysis will give you the free references (reading and video information) you need to help make your farm a success, and assist you in understanding your financial status. So, curl up with your laptop and check out these resources!
Many commercial sites exist to help farmers navigate the financial basics. Some charge large fees. Before expending those funds, check out the information that comes from our agricultural universities across the United States. Many universities have similar free (or minimal cost) online modules that anyone can register and use. Our California UC system has a small farm program and their staff along with local UC extension advisors can often point you in the right direction with just a visit or telephone call. Their web downloads on business matters are not as current in 2022 as information from other universities referenced below.
One good university site is at the University of Minnesota's Center for Farm Financial Management (CFFM).The CFFM develops applications and educational programs that provides farmers resources to successfully manage farms and the financial activities related to farms. Their tools cover farm financial planning, financial analysis, business planning, commodity marketing, and credit analysis.
One of the best sites for easily accessible and well laid out information (and free) is found at the University of Iowa Whole Farm site. The information is up-to-date, has examples, and can help make any farmer a better financial manager.
Michigan State University offers helpful explanations and examples about Balance Sheets, Financial Statements, Cash Flow analyses and more. Their documents can be easily downloaded from the Farm Management page of MSU.
The University of Illinois has a tool which they describe as FAST (Farm Analysis Solution Tools). These "are a suite of Microsoft Excel spreadsheets designed to assist those in agriculture make better decisions via user-friendly computer programs. FAST aids users in performing financial analysis, assessing investment decisions, and evaluating the impacts of various management decisions."