"Good order is the foundation of all things." – Edmund Burke
Organization. It's a skill that some people seem downright gifted in...and one that others seem to lack. Whether you are a trim-and-tidy keeper or not, here are some helpful tips to stay on top of your operation's finances.
Create a System
Virtual and cloud-based, or pen and paper into the filing cabinet -- what will help you to succeed greatly in maintaining organized records is a system. Systems are what make your farm efficient, and keep things moving along in an orderly manner. At some point, you've most likely seen the great benefits of a good system put in place and followed diligently. Whether that system was in your operation or someone else's. One of the great keys to success is making a plan and acting on it.
An organized bookkeeping system should include several key elements: time set aside for the sole purpose of working on the books, a checklist of activities that need to be completed in the books, knowledge of how to complete the necessary actions, and attention to detail.
You can have all the time in the world to organize your farm's books, and if you don't know what needs to be done, or how to do it...it will still end up a mess. Setting up a checklist of things you know need to be done, and then reviewing it with a professional is a great idea! They can steer you in the right direction. Once you have made a list of monthly, weekly, and perhaps daily action items...get yourself educated on how to correctly complete them. Blogs like this are helpful and professionals should not be opposed to answering your questions. Lastly, if you pay attention to the details on a regular basis, you are less likely to end up in January with a pounding headache. No one likes to spend hours in the office trying to fix mistakes that could have been avoided.
In order to keep a system in place, you must have the motivation to do it! This can be a struggle for many farmers and ranchers when the days are long and filled to the brim with work. "I don't have time for paperwork."(In my personal opinion, book-work should be delegated or outsourced.) But if you intend to keep the books on your own, you must learn to see the necessity of it. It's easy during tax season to say, "Wow, we should have kept up with this!" and not quite so easy to do that during a busy season. It's good to remind yourself that keeping organized records creates a healthier operation, one less likely to be in a financial pickle. Find motivation, not just during tax time, to keep your books healthy...for your farm's sake!
One way to help motivate yourself is to make it easy. For example, you may find that becoming a cloud-based operation will help you greatly in organizing receipts. Making small activities more convenient helps to ensure that they will get done.
Use Your Books
This may ride on the tailcoat of finding motivation, but if you truly use your books to their fullest potential for your farm or ranch, it will be much easier for you to keep them organized. It’s really a pretty simple theory: the books aren't organized, you can't use them -- the books are organized, you can use them!
When you are able to use your operations records to analyze the financial position and health of your farm, notice trending patterns over past time periods, and project future situations...you have the ability to make informed decisions about your farm or ranch. And that is really an invaluable resource!
If organizing books is not your forte, or you would rather focus your time on your business, feel free to contact me!
Good Steward Farmkeeping
Contact Hannah at http://www.goodstewardfarmkeeping.com/contact