For some, the idea of employing the services of an accountant conjures up pictures of big office blocks and large numbers, leaving many who do not fit this image to feel as though it is not appropriate for their business. Farmers often believe that an accountant can do little for them, but the truth is that they can have a great many benefits for farming businesses.
Farming is a unique industry, and it does not run in the same way as most other businesses, so having an accountant on hand can help you to keep on top of the ever-changing financial landscape while you keep an eye on the physical one. They will need to be familiar with agricultural accountancy as it can work quite differently to other businesses and requires a certain level of specialist farming knowledge.
Helping things to grow
As a farmer, you are probably an expert when it comes to making things grow, but that does not necessarily apply to your business. A professional accountant can look at the best ways to make your farm profitable by examining where the money comes in as well as how it goes out to find ways in which you can save money and make more of it.
They need to be able to understand the markets that you work within to be able to see what is realistic for your business and can give you ideas of new avenues to go down that you might not necessarily have considered before.
Managing data
Keeping on top of the finances of any business can feel like a full-time job at the best of times, but this is especially true in the world of farming. There are long hours involved in farming, which can leave you with little time or energy to manage your accounts.
An accountant can help you with what information you need to keep and how to do so and can help you to put everything in order. This will make it easier to keep track of things and see patterns, as well as making submitting any tax returns much quicker and easier.
Tax knowledge
Farming comes with its own set of considerations when it comes to taxation and subsidies. This can be difficult to keep up with, especially as things are regularly subject to change. An accountant should be able to stay abreast of any changes or regulations and manage your accounts, accordingly, helping you to maximise what you can claim as well as minimising what you have to pay.
There are a number of government schemes that affect the agricultural industry, and these can change depending on which resources are currently most in demand. Subsidies are often offered to boost the production of the things that are most needed, so keeping on top of these can help you to plan how you are going to progress and where you will devote your attention.
Your accountant can help you to see what subsidies are on offer, which will make you the most profit and which are likely to be revoked before you have the chance to cash in on them.
Accounting software
Most businesses make use of accounting software, and the agriculture industry has its own versions of accountancy software that you need to familiarise yourself with. This can be difficult to get your head around and so employing the services of a professional accountant can save you a lot of headaches.
A good accountant will be able to steer you towards the right type of software for your business according to whether you specialise in crops or livestock, and can help with things like warehouse management, agricultural ratio analysis and breeding and growing calendars to help make your planning more efficient.
Staffing
The number of staff that your farm needs can change with the season, so you may need help with planning your costs according to how many people you need at any given time. Your accountant can help you to take advantage of grants that might be on offer for taking on students or apprentices, as well as managing payroll to ensure everyone is paid correctly and on time.
Asset management
One of the biggest assets that a farm has is its land and needs to be managed correctly in order for it to remain productive. This will help your land to maintain its value and even help to boost it further, but you will need someone to help you consider the added costs of doing this, such as fertiliser, irrigation, and pest control.  This balancing act can be tricky to manage, so a farming accountant can help you to see the most profitable way through this.
Change of land use
From time to time, you might need to change the way in which you use your land. This might be to help keep up with demand or to do your bit for wildlife conservation. Whatever the reason, you will need to record this in your accounts and possibly adjust the value of the land accordingly. Your accountant can help you to work out whether a change in land use is a wise move and make sure that it is all recorded correctly.
Stock levels
Stock levels can be a difficult thing to keep track of, especially if you farm livestock, as calving and lambing season can boost numbers, but deaths can bring it straight back down again. It is important to remember that each animal carries a value, and so accurate numbers need to be recorded. Your accountant can help you with this and show you which breeding programmes tend to be the most profitable for your farm.
As farming accountancy tends to be very specialised, it is important to look for an accountant who has some experience in this field. They will then be best placed to guide and support you to make sure that your finances are all in order and that your profits are maximised as much as possible.
Stephen Allcock
Stephen AllcockStephen Allcock is a Chartered Accountant and the firm’s Senior Partner and has been a partner of Rogers Spencer since 1980. Stephen specialises in Accountancy Solutions, Audits, Bookkeeping and Tax and VAT. Find out more about Stephen here.