It's no secret that businesses stay in business because they do what is profitable. So, as a farm, do you know what is making money on your farm? Do you know what isn't? If you can't answer these questions - quickly - you need to look into farm management software. Keeping your farm or ranch organized is an important part of your job as a business person. The fact that your job is in agriculture is just icing on the cake. Many things go into your day-to-day work but never forget the business side of your agribusiness; Finance management, daily tracking, task management, recourse management, customer service, and schedule juggling, are all inevitable parts of every business, and in a farm operation, this is no exception.
Keeping accurate farm records is essential for the success of any farming operation, regardless of size. For small or medium-sized farms, maintaining detailed and organized records can help make informed decisions, manage resources efficiently, and increase profitability.
No, it's not the most fun part of business but every farmer should be informed about their finances, farming productivity, and how their business is performing. In this post, we've covered key areas of information to keep for your farm management records, different record-keeping styles, and processes to track your farm records, how keeping good records can help your business, and the hidden value of keeping records.
Why Keep Farm Records?
As business owners, we want to make sure our business is healthy and thriving. But if you don't have information on your business, how do you even know? There is more to it than that. There is stress with being in business. Keeping track of your farm records might be more valuable than you think. Here's how record-keeping can the burden off you:
Financial Management: Keeping track of income and expense records (more than once a year) makes it easy to manage cash flow, plan budgets, and identify profitable (and nonprofitable) areas of the farm. Tracking finances takes the pressure off you for three reasons; you know where you stand with your business finances, you don't have to keep track of numbers in your head, and it makes tax time easier. There may be fewer unpleasant surprises by keeping this information updated. Keeping records won't tell you when the irrigation pump might stop working, but it will help you know if you can afford to repair it. And you don't have to keep track of this all in your head.
Tax Time:
Tax reporting comes every year. One of the top reasons we hear why people start keeping track of their profit and expenses is to take the pressure off them at the end of the year during tax time. Instead of entering 5000+ receipts all at once, they do it in little bites. This simplifies this process and takes the stress off them because they have been tracking it all year.
Compliance and Reporting: Many agricultural programs, grants, and loans require accurate records. Keeping good records ensures that you can easily meet these requirements whenever you might need that help. Keeping accurate records takes the stress out of a situation where you might need those documents right away. If you are trying to gather all that information under a loan or grant deadline, not only is that stressful but you can make mistakes. In a compliance situation, it's required to keep those records anyway. If you already have that information up to date in a safe place there is less to worry about.
Performance Analysis: Keeping accurate and up-to-date records allows you to analyze crop yields, livestock performance, and resource use, helping you make data-driven decisions to improve productivity. You can see what things were done in a day, and what needs to be done tomorrow. This takes the burden off you as the owner-operator. You don't have to have all that information in your head. This takes the stress off you because you don't need to remember everything but it is saved and organized in a safe place where you can access the data to analyze when needed.
Risk Management: By keeping detailed records, you can identify potential risks and take steps to mitigate them, whether they relate to feeding rates, returns, market fluctuations, weather patterns, or other challenges. As business people, there are challenges and risks but you shouldn't have to worry about these things constantly. Keep this information in a place where you can analyze the data and make good business decisions. You can't be clear-headed when you are worrying about these things because you don't have all the information or it's disorganized.
Planning and Forecasting: Detailed records provide insights that help you plan future operations, from crop rotation schedules to livestock breeding plans. There is relief in being able to see your business data. This allows you to make clear and well-informed decisions when you have all the data in front of you. It tells a story and can show you what other questions to ask yourself and where you can go next in your business.
Common Record-Keeping Challenges & How to Overcome Them
Over the years we have spoken with countless customers who have come to us with record-keeping challenges. Here are some ways they overcame their challenges, what worked for them, and what we've used in our own farm businesses to overcome these challenges.
The Problem: Time Constraints
There is always more work to be done than time in the day. With time debatably being your most valuable resource it's important to spend it wisely. If you're feeling that you're stretched beyond your means, try doing a time audit. Then you can make sure you're spending your time on things that bring more revenue or create more business for you. It's great that you are busy but do you also have a thriving business? Be busy with the right things. Solution # 1: Use Systems Record-keeping can seem like an extra task on top of an already busy schedule. To overcome the age-old time constraint problem, have systems to make record-keeping part of your daily, weekly, or monthly routine. Don't let the paperwork get out of control. Take little steps to enter the data, or hire someone to do it for you. Also, you don't have to track everything. Just track the things that are going to make the most impact on your business.
Solution # 2: Use Technology
You can use technology to simplify the process by using bulk edits, uploading, and importing data, or using integrating software that uploads information automatically. This will help you work smarter, not harder.
The Problem: Data Accuracy
Inaccurate records can lead to poor decision-making. Keeping good records and ensuring data accuracy are crucial for the success of any business, especially in agriculture. Accurate records provide valuable insights into operations, helping to track progress, identify areas for improvement, and make informed decisions. They enable farmers and ranchers to monitor costs, optimize resource use, and improve productivity. Good record-keeping also ensures compliance with regulations and can enhance the farm's reputation by demonstrating accountability and transparency. Solution # 1: Get on the Same Page
Ensure everyone involved understands how to record data correctly. You can do this by coming up with processes and training for your staff. (This doesn't need to be complicated.)
Your steps could be simple and look something like this:
Step 1. Feed chickens, Step. 2 Measure how much feed is left, Step 3. Record the amount of feed used, Step 4. Refill water, Step 5. record the temperature of the coop.
Or to get to the heart of the matter and more in-depth into your farm business, you might ask yourself a few business questions:
- What information would help you see if things are going well on your farm?
- Is this information something you can track or measurable?
- How often should this be tracked for the best view of this data?
- What area is going to make the most impact on your business?
- What is going to drive revenue and more business?
Maybe there are other questions you want answered as well. Write them down and find a way to answer them. After you've answered these questions, come up with processes around tracking that information, what it should look like in a healthy business, and what to do if it doesn't look the way you want. Then make changes accordingly. Again, this doesn't need to be overly complicated and you don't have to make these changes all at once. However, tracking information that helps you make positive changes in your business is key.
Solution # 2: Double-check entries to ensure accuracy. Just like my dad said, measure twice, cut once. By making sure your records/calculations/measurements/etc. are accurate you will avoid more work for yourself later in trying to unravel what happened and why that measurement is off. If accuracy is hard for you, try going a little slower when you're recording something. The more you do it, the easier it will be.
The Problem: Lack of Organization
Disorganized records are as good as no records. Sometimes staff members are reluctant to keep records. Make sure that everyone on the farm knows the importance of these records and why you're taking them. These records are the pulse of your farm. If you can't find the pulse you can't see how things are going.
The Solution: Have a System
Clear up disorganization in your farm operation by setting up a clear, logical system for recording, storing, and retrieving information. Just like we discussed earlier having a system ensures that everyone is doing something the same way. Make sure this system is what the whole farm follows.
Different Farm Management Record-Keeping Styles
Tracking farm data effectively is crucial for improving productivity, making informed decisions, and managing resources efficiently. Here are some of the different ways to track your farm data.
Manual Record Keeping
Recording farm information on paper is a great entry point for record keeping. This method is inexpensive and gets you into the habit of tracking information. Unfortunately, it has some drawbacks.
Features: Paper logs, notebooks, 3 ring binders, for basic tracking of daily activities.
Pros: Simple and low-cost
Cons: Prone to errors, does not scale with your business as it grows, is not easily searchable, easily lost, misplaced, or ruined, and you cannot access the information from everywhere.
Spreadsheets
This is another common way that farmers organize and track their data. We see folks outgrow this system in the long run though. They get frustrated by having so many spreadsheets all over the place, managed by different people.
Features: Customizable and flexible for small-scale operations; For tracking crop info, livestock checks, wellness, important dates and information, inputs, yields, financials, and expenses.
Pros: Low cost or free for Excel or Google Sheets, create whatever you want, sometimes accessible in multiple places.
Cons: Creating them from scratch, may not be up to date, is time-consuming, might not give you everything you want, may leave out data, is prone to error, and data can be wiped out.
Farm Management Software
Ok, we're biased toward this way of tracking to be sure, but having tried those other ways and finding poor results and having over a decade of hearing other farmers' bad experiences we have some data to go on. Here are some pros and cons to think about.
Features: Can track task management, crop dates, treatments, harvests, and sales, soil conditions, livestock health, livestock grazing and movements and other data, important dates, important records, track and give weather patterns and climate data, farm mapping, equipment usage and maintenance, eCommerce and customer data, financials, resources and inventory, and more.
Pros: Can be accessible from anywhere and on any device, user friendly depending on the company, information is in real-time, ready-made reports, data is safe and always available, "talks to" or integrated into other technology, it's flexible and can be used like one of the other methods (print things out if needed or download to a spreadsheet) and technology is updated and improved all the time.
Cons: Cost depending on the company, getting up and running on a new system
Remote Monitors, IoT Devices, and Sensors - Oh My
Companies are finding more and more ways to try to make tracking easier for farmers. Sensors, remote monitors, or The Internet of Things (IoT) can offer numerous benefits and some drawbacks. Here are some of the pros and cons of tracking data in this way:
Features: Can track crop yield, soil conditions, livestock movement, weather patterns, equipment usage, financials, and inventory.
Pros: Tracks information remotely for you, sends data to be analyzed, reduces risk to crop or livestock if monitored, and can be analyzed in conjunction with another app or software if integrated.
Cons: Cost of devices/hardware, connectivity challenges, technology can break down and you might miss that data opportunity, technology changes quickly and may become quickly obsolete, may need to have a subscription for the software as well.
Tips for Effective Farm Record-Keeping
We believe strongly that good record-keeping makes or breaks a farm business. It's why we are so passionate about it. We want farms to succeed! So here are some tips for effective record-keeping on your farm.
Choose the Right System: Select a record-keeping system that works for you, whether it's a clipboard, a simple notebook, a spreadsheet, or farm management software.
Be Consistent: Regularly update your records to keep them accurate and current. Set aside a specific time each day, week, or month to enter data and review your records. Timeblock your calendar to enter that information and analyze what it tells you. Don't skip those reminders.
Keep It Simple: Start with basic records and expand as you become more comfortable. The goal is to create a system that's manageable and suits your farm's needs.
Use Farm Management Software: Consider using farm management software designed for small to medium-sized farms. These tools can streamline record-keeping, automate data entry, and provide valuable insights through reports and analytics. We talk about Farmbrite below if you want to learn more about our software.
Train Your Team: If you have employees or family members helping on the farm, ensure they understand the importance of record-keeping and know how to input data correctly. Make sure you are all doing it the same way.
Review and Analyze: Periodically review your records to assess farm performance and identify areas for improvement. Use this information to make adjustments and plan for the future.
Digital solutions often provide added benefits but that might not work for your budget. Go with what works for you now. As you grow, look at those systems to see if they still work for you. We all start somewhere. That's the important part, having a system to track your data and make smart decisions with that data.
How Can Farm Management Software Help Your Farm?
Here are some ways that using farm management software on your farm can help you be more organized and efficient. It's important to do your research and find the best company for you. Here are a few of the things that farm management system can help you track on your farm.
Measure efficiency and progress
Easily prepare accounts at year-end
Understand financials on a day-to-day basis
Help plan for upcoming payments, equipment maintenance, farm tasks, etc.
Organization!
Know what tasks were or weren't done - by whom
Track records online and access them from anywhere
Track schedules and timesheets
Track grazing movements
Identify strengths and weaknesses in the farm business
Help manage changes and improvements in the agribusiness
Make productivity projections
Help maximize the expenses you claim and minimize your tax burden
Make it easier to pay employees and creditors and see what is owed
Keep livestock notes, breeding, health records, and genealogy information (and more) in one place
Track organic certification notes, data, tracking, and more
Keep track of customer information, sales, and schedules
Keep track of equipment and vehicle maintenance
Honestly, this just scratches the surface of what farmers track...
Writing everything down manually or keeping all your information in separate spreadsheets requires a lot of time, is prone to errors or loss of records, and can be difficult to calculate each expense/sale/investment and compare it to productivity.
To make it easy, Farmbrite has done this for you. We have many charts, graphs, profit and loss reports, seed calculators, average daily gain reports, and much more to give you this information quickly. You can also enter notes and information quickly with our quick add, using a QR scanner and your mobile device, or an integration. Keeping track of your agricultural business online with Farmbrite helps you track costs and income, tasks, schedules, and all the daily work for your agricultural business easily and saves you a ton of time. Let Farmbrite do the tracking for you, while you focus on the rest of your daily tasks.
Record Keeping Doesn't Have To Be Overwhelming
Keeping farm records doesn't have to be overwhelming. By starting with the basics and gradually incorporating more detailed information, you can create a record-keeping system that supports your farm's success. Whether you're tracking financials, production, or inventory, consistent and accurate records will help you make better decisions, improve efficiency, and ultimately boost your farm's profitability.
If you're looking to take your farm record-keeping to the next level, consider exploring farm management software options that are tailored to the needs of small farms. With the right tools, you'll be well on your way to more organized, data-driven farming.
Happy Farming! From the Team at Farmbrite