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    Keeping Track

    By Tracy Marsh

    Most farmers choose their line of work because they prefer dirt and sunshine to data and spreadsheets. But good record keeping is the key to making sound decisions regarding your farm, no matter its size. 

    Keeping accurate records benefits farmers in four significant ways, says Dr. Cesar Escalante, professor at the University of Georgia’s Center for Agribusiness and Economic Development. 

    1. It improves your forecast. You can expect better outcomes and higher profits when your plans are based on concrete historical data as opposed to tradition or habit. On a farm, there are simply too many variables to keep track of without systematic documentation — products grown, soil applications, veterinary care, equipment maintenance, fuel and labor, to name a few.

    Maintaining detailed records can help farmers determine which products they should keep or discontinue, and whether they should expand, downsize, or diversify, Escalante says.

    2. It eases implementation. “Farmers are exposed to a lot of risk — natural, market, and other types,” Escalante says. 

    When weather anomalies, equipment breakdowns, or market dips make it necessary to change course, accurate records can help you get back on track faster and with less stress. 

    Say a major piece of equipment needs to be replaced, and a grant or loan is the best option for covering the expense. Your chances of being approved hinge upon your ability to provide well-organized financial records to support your case. 

    3. It puts you in control. Information is power. And the best way to control your bottom line is to understand how your decisions are affecting your farm, both financially and operationally. 

    Solid records help you diagnose problems, and suggest their solutions. Just as your balance sheet can alert you to dwindling profits, it can also point to the reasons why. 

    Maybe you need to raise prices to offset increased feed costs. Or maybe you’re failing to take advantage of a significant tax deduction by not properly accounting for your own labor — a common mistake among sole proprietors, Escalante says. 

    4. It alleviates stress. Good record keeping helps take the guesswork out of farming. The confidence and peace of mind that comes from knowing your decisions are rooted in quantifiable data is invaluable — not only at tax time, but throughout the year.