ANYBODY CAN START FARMING
One chore that no one on our farm enjoys is bookwork. After spending the better part of two days on our quarterly GST return for March and July (I was late), I decided we have to come up with a better system. I have also decided that we simply cannot be the only farmers who feel like they have just wasted a huge part of their lives, no matter how much the government owes us, after sitting for that long filling out paperwork.
In all honesty having the bookwork current is a huge help at income tax time and the only real way that a financial decision can be responsibly made on the farm. So instead of guessing at where we are financially when we have to make decisions, such as how much money we can spend on hay this year, I proposed we work together to get our bookwork more organized.
In my frustration, I called a family meeting and am going to share how we think we can streamline the process.
After much discussion we deciphered that our lack of organization started when our family dynamics changed. When we started farming I was the main shopper. I came home from town, collected the receipts, and updated the account ledger and chequebook. All of this has changed when I was no longer the main shopper. This responsibility is shared between my husband and our adult children. The involvement of the children has also spurred our farm to grow which also generates more receipts and a large need to be able to track our financial situation regularly. It had become very obvious to me that we needed a plan.
HERE WERE OUR OPTIONS
We could change our reporting periods to yearly, but decided that would be horrific. If I cannot get our quarterly GST reporting organized, having a kitchen drawer full of a year’s worth of papers would just be too daunting. I also have the problem that occasionally I do not understand a parts bill and my husband has a hard time remembering after three months so I am sure yearly would be impossible. I also enjoy the fact that at the end of December when I finish the GST I am also ready for the accountant. We decided to stay with quarterly reporting.
In order to stay with quarterly reporting everyone involved with bringing home receipts has agreed to learn how to enter receipts in the ledger. Originally, we had thought that if we had a designated area for all the receipts to be placed when they came home from shopping for me to then enter them into the ledger that would work but it doesn’t. The first problem is that not everyone puts the receipts away and I am finding them in grocery bags, on the counter, in pockets or on the table. Occasionally they are left on the dashboard of the vehicle but the worst problem is that I am not finding them at all and that costs us money. We had tried duct taping large envelopes on the back of the driver seat but not one person used it. This is why we decided that the person who makes the purchase should be responsible for making sure it is recorded properly in the ledger.
If computer accounting software is used, such as Quicken, the GST amount on all the bills can be entered in an independent account then the total is always ready. Again this only works if the receipts are diligently keyed into the computer instead of written in the ledger.
I have set up an Excel file to track our monthly expenses and income (Contact Debbie if you’re interested in how she set up the Excel file). I made a column for GST so as long as this is updated regularly at the end of the reporting period it
should only take a few minutes to fill out the GST return forms with the required income and inputs numbers. When you finish filling in a monthly income column, highlight the column by left clicking and dragging, and then click on the auto sum button. This can be found at the top of the screen next to the hyperlink button on my computer and looks like a funny E. For the expenses I added up all the GST entered into my ledger and entered it into the monthly columns. I manually add the GST for the quarterly report. Once all the monthly farm expenses are entered into the Excel file they can be totalled in the same way as the income.
As we have been putting these changes into place we are observing that more than just our GST reporting should start happening on time.
We started farming after being chained to a regular paycheque at our city jobs. Adjusting to the natural ebbs and flows of income on the farm has been very hard for us and by keeping up with the bookwork this year we can now examine where we need to make changes. We are multi-species farming so we have the advantage of being able to adjust our paydays to meet months of the year where the expenses are higher, such as field work time. With these up-to-date financial records we will be able to study our situation better for next year and maybe we’ll be able to keep up with our finances better too.
DebbieChikouskyfarmswithherfamilyat Narcisse,Man.Visitorsarealwayswelcome. ContactDebbieat [email protected]
Everyone involved with bringing home receipts has agreed to learn how to enter receipts in the ledger