Missouri Dairy Business Update  
Volume 11, Number 12
December 2011

 

Record Keeping Tips & Tools for Year End

Every dairy producer will need to summarize income and expense information for income tax purposes in January and February. Purdue's 2011 Income Tax Management for Farmers is a summary guide for managing farm income taxes. In addition, the IRS publishes the Farmer's Tax Guide online now as well as hosting a website on Tax Tips for Agriculture

If you seek a new accounting system, the Missouri Farm Accounting Resources website links you to where to purchase MU's farm accounting manual record books. The site also links you to manuals for using the popular Quicken or QuickBooks software for farm accounting:

Go one step further than just compiling tax records. Complete a Balance Sheet, listing all of your assets and liabilities as of January 1. Get in the habit of completing a balance sheet at the beginning of the every year so you can track progress in net worth. This yearly balance sheet helps you when you need to communicate long term equity growth to your lender and to other family stakeholders. An online video tutorial for learning to do a farm balance sheet is available at: http://ifsam.cffm.umn.edu/

If you need to download a blank Balance Sheet form, click Balance Sheet.pdf

University of Illinois Extension has a free balance sheet spreadsheet available at: http://www.farmdoc.illinois.edu/pubs/FASTtool.asp?category=financial

Iowa State Extension has a list of suggested values for 2011 closing inventories available at: http://www.extension.iastate.edu/agdm/wholefarm/html/c1-40.html

Purdue University has an online booklet for analyzing your farm's financial performance available at: http://www.agecon.purdue.edu/extension/programs/fbm21/Ec712entry.htm To calculate the ratios on paper, just download this hand worksheet and fill in the blanks. To do them using an excel spreadsheet, just download this excel file to your computer, fill in the blanks and let it do the math for you.






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