Accounting for Farmers

Running a farm isn’t just about working the land—it’s about planning, tracking, and making smart decisions to secure your farm’s future.

Keep Personal and Farm Finances Separate

It might be tempting, especially on family farms, to mix personal and business finances, but it’s best to keep them separate. Use a dedicated business account for all farm-related transactions. This simplifies bookkeeping, ensures accuracy, and saves time when it comes to sorting payments.Understand Taxes

Taxes can be complex, but staying organised will save you time and money. Here are some key points to remember:

• Know which costs, such as land improvements, need to be capitalised.

• Understand what’s deductible and what must be declared as income.

• Be clear on the difference between farm income and rental income.

• Keep track of mileage and claim fuel allowances.

Keep Updated Records

Don’t leave your financial admin until the end of the year. Regularly updating and reviewing your accounts allows you to make informed decisions and avoid last-minute panic. Think of accounting as a way to see where your farm is headed—not just where it’s been.

Track Profitability

Profitability is at the heart of every farm. It’s important to measure it in different ways to get a full picture:

• Revenue per area: For example, profit per acre, but don’t forget to include land maintenance costs.

• Month-to-month profits: Great for keeping an eye on current performance, but less effective for long-term planning.

With accurate tracking, you can make better decisions for future growth.

Use Consistent Categories

Assign clear and consistent codes to your expenses and income. For example, differentiate between fertilisers and chemicals, and link expenses to specific crops. Avoid lumping everything under “miscellaneous,” as this can undermine the accuracy of your financial records.

Invest in the Right Tools

The right accounting software can transform how you run your farm. Look for tools that:

• Help you manage inventories and suppliers.

• Track livestock and crop performance.

• Support payroll and tax preparation.

By streamlining these processes, you’ll save time and focus on what matters most—growing your farm’s success.

Good farm management starts with good financial practices. Need support? The Accountancy Workshop is here to help. Contact us today and let’s secure the future of your farm together!