It has been decades since farmers started to put the lids on their shoeboxes and began using desktop computers to keep their books.
Over the years, software developers have been busy coming up with applications for all kinds of tasks, but not so for farm accounting.
Farm Credit Canada’s (FCC) AgExpert Analyst software is still the only major made-in-Canada accounting package developed for farmers. Luckily it hits the mark for most farming operations.
Glen Kroeker, the Director of FCC Management Software, explains, “AgExpert Analyst is tailor-made for farmers. So, for example, farmers do not have to set up a chart of accounts from scratch. They can choose from standard farm type accounts.”
It also very conveniently prints out reports that meet AgriStability program requirements and enables farmers to manage farm-specific inventory information.
It even has a payroll function, which is becoming a more common requirement for farmers with expanding operations. Kroeker says, “We’ve noted an increase in the usage of the payroll portion of the software. Now you’re seeing a shift away from paying in cash at the end of the season to having a more formal payroll.”
AgExpert links with FCC’s other software offering, Field Manager PRO, which is a field management software program. “In Field Manager, farmers can bring over real information from their accounting software to improve field budgeting,” Kroeker explained.
Is that all there is?
Many farmers use standard accounting packages such as QuickBooks, Quicken and Simply Accounting and adapt them to a farming situation, and there are still many farmers that use a combination of paper and spreadsheets. Kroeker does not have official numbers on market share, but based on word of mouth, guesses that the most popular alternative to the AgExpert option is a paper-based system.
And, as is the way of farmers, there are also home-made solutions.
Joe Warwick, former owner of Warwick Computer Consulting in Glaslyn, Saskatchewan, developed his own system when he was farming. “Many farmers invented their own database-driven programs back in the day,” explained Warwick.
That kind of innovation is what was behind Farmtool for Windows available from Wil-Tech Software Ltd. in Glaslyn, Saskatchewan. According to Warwick, “Farmtool does just what you want it to do. It’s a single entry farm tool that works exceptionally well. It is exactly what most small farmers need.”
There are very few alternatives like Farmtool on the market. There are a number of U.S. farm accounting packages, but they do not accommodate GST, let alone Canadian farm programs like AgriStability.
The problem is that the market is just too small. “To begin with, bookkeeping has to be specific to a country,” said Kroeker. “Then if you’re specializing in one industry, the market becomes even smaller.” There are about 200,000 farmers in Canada. According to Kroeker, software developers are looking for a customer base of more like two million users.
Kroeker says that FCC got into the software business when it recognized that there was a gap in the market. It decided to support the AgExpert program as part of its mandate to provide management tools for farmers. “In general, farmers keeping good financial records tend to have a better financial business and their overall management practices are stronger,” said Kroeker.
Although you don’t have to be an accountant to use a system like AgExpert, Ted Nibourg, business management specialist with Alberta Agriculture and Rural Development’s Ag-Info Centre, says that farmers still need to understand accounting principles.
“If they don’t know accounting, farmers are going to be in a heap of trouble,” said Nibourg. “You have to know about debits and credits, and understand your chart of accounts. If you don’t, all the computer will do is allow you to do is make mistakes bigger and faster.”
Derek Brewin, a professor with the Department of Agribusiness and Agricultural Economics, University of Manitoba, says one example of a potential danger area is not properly accounting for a shift in the value of inventory over the year.
“If I start the year with full bins and have empty bins at the end of the year, I may think I’ve had a good year, but my net worth might be lower,” Brewin explained. It is necessary to ensure that there has been proper accrual adjustments for both inputs and outputs.
“If the farmer doesn’t understand that, then they end up misrepresenting the income they had over the year, and then the software is not that valuable,” said Brewin.
On the horizon
Kroeker says FCC will be moving AgExpert to a multi-year database platform in November. “What that will mean for farmers is that it will simplify the year end process and make it seamless to do a cut off and start the new fiscal year.”
FCC is also working to deliver stronger management reports, including financial ratios and average selling price. This will make it helpful to improve grain marketing skills, even more important as farmers enter a new wheat marketing era. “Farmers need to know how much money the crop actually made for them,” said Kroeker.
AgExpert Analyst costs $399 with a one-year service plan. Farmers can sign up for an annual service plan at $249 per year, which includes any upgrades and unlimited support. †