Choosing the right financial software for farm management for your farm business is a daunting task. There are a lot of applications on the market, and all are telling you they are the best solution for your business.
Each software application looks different and has a unique user experience.
So how do you sift through all this information to choose the correct options for your business?
As you are subscribing to software to do a job for you, the first thing to do is ask yourself:
- What job does this software need to do for me and my business?
- What job does this software need to do for other people and firms my business use?
Most people think they are choosing a farm management software for themselves and their needs. But, as a farm financial manager, you are at the centre of a wider farm financial management team.
This team is generally made up of:
- Yourself
- Business partner(s)
- Accountant
- Farm consultant
- Bank or investors
Each of these partners in your farm business will have different jobs they need the software to do. So, when you choose software, you are choosing for a team and not just yourself.
Accountant role
In most cases, your accountant will mainly need enough information to help you manage and minimise your tax liabilities, plus produce for you a Profit & Loss Statement, a Statement of Financial Position, and a Business Activity Statement.
Your accountant is mainly interested in your historical data. Future-focused assessments like instalment tax liability and tax planning will use your past performance. So, they need your software to make an accurate record of your past performance.
Bank (investor) role
A bank or other investors are lending you money at risk with the expectation of return. They are more interested in your forecasted performance to make a lending decision, as this is the timeframe they are investing in. Their interest in your business's past performance is only used to validate the accuracy of your forecasted performance. E.g. if you forecasted revenue of $2mil for the next year yet in the past three years you have only had revenue between $1.2 and $1.5mill, then they would need to question the forecast.
Farm consultant/adviser role
If you have a farm business management advisor on your team, you will have hired them to help you with two main jobs:
- Help you with your farm production and financial strategy going forward.
- Help you articulate this strategy to the funder of your business. i.e. bank or investor.
A farm management adviser is focused on the future performance, meaning forecasted production and forecasted financial performance of your farm business. They are also interested in detailed past performance and use it as a baseline to indicate future improvements.
A farm management advisor helps you answer three main questions:
- NOW: Where is my business today?
- WHERE: Where do we want to take the farm business in the next 1 to 10 years?
- HOW: How will we achieve this outcome?
Business partner role
Your business partner(s) may be family (husband, wife, son, daughter) or a person or business outside your family. They may be part-owners or a share farming partner. Business partners come in a large variety of forms, yet the jobs they need doing are very similar. The job they want doing is usually business status reporting. Asking, how is the business travelling financially?
You are the boss of this farm financial management team
All these people who work for you require different things from your farm management software. All of the people in your team must be working from a single source of truth. You do not want you, your bank, your advisor and your accountant all doing their jobs on different systems.
As a farm manager, you manage a high-risk business and need access to the latest version of your financial truth at all times, so you can report on it and change it whenever you need. Therefore, it is crucial you do not have the core components of your financial management outside of your access or control.
The cost of getting it wrong is measured in wasted time, increased fees, lack of business visibility, less control and increased exposure to risk. So ensure you are subscribed to farm business management software that works for the whole team.
If you haven't used Agrimaster before, sign-up for the 30-day free trial.
