Looking back at Countryside Data's Finance,(accounting) Planner and Payroll software for agriculture

Ag Finance and Ag Planner Article by Jim Fravil


This Article was first published in March / April 1986 in AgriComp..(Doan's copyright 1986) The reference for farm computing. Countryside Data’s Finance, Planner and Payroll have been updated from time to time. Including the newest release WinOne VB for Windows XP and Windows 7.  Enhanced graphics, cashflow, market value balance sheets and profit /loss for the total farm operation as well as profit / loss by enterprise, with breakeven prices and yield. Crop and Livestock operations can use all versions. (comments by Ken Stavast)


The Article….


Every business needs three sets of books: one set for the tax man, one for the banker man and most importantly one for the “boss” man—the manager—from which to run the business. The idea of maintaining three sets of books is not meant to imply anything surreptitious, but to foster the realization that each yields different information for very different purposes. The most successful manage users all three sets of books individually and collectively to achieve his business goals. (November 14, 2014 a note from Jim the author....3 sets of books has now changed to 4 sets of business...one for the lawyer as well. Thanks for the update Jim)


About sixteen months ago with the above in mind, I began looking for an accounting program to use on our own farm which has a 60 head cow/calf herd, 100 head cattle feedlot, and some cash crops. After reviewing several current programs I settled on Ag-Finance and Ag-Planner, Version 4.1, from Countryside Data of Idaho Falls, Idaho. The Ag-Finance and Ag-Planner programs can be purchase and used individually, but a user who did this would be missing out on the complete usefulness of a system, as the two programs interact well with each other.


Features


The minimum hardware needed to run the Countryside programs is 64 K of RAM memory, two disk drives with a minimum of 140K storage available per drive (the bigger the better). CP/M operating system, video monitor of 40 or 80 columns, and a printer capable of printing 132 character per line. A CP/M – 86 and MS-DOS version requiring a minimum of 128K of RAM memory is also available. The list of computers for which the programs are available is extensive, covering all popular and some not popular machines. I use the programs on a Morrow MD_3 with and Okidata 92 printer.


In July of last year after having used the system of over a year I received from Countryside an updated version labeled “Blue Ribbon A”. This new version corrects a few bugs and improves some input and report formats. The changes are subtile enhancements rather than a major rework.


The Ag-Finance program is a double-entry bookkeeping system allowing cash or accrual accounting. By setting up the system for accrual accounting and using the actual cash flow statement you can have the best of both worlds, cash and accrual records. If you add Ag-Planner you have complete enterprise reports and can combine or compare any number of enterprises for analysis purposes. Hence three sets of books from one program, giving the manager a valuable management tool.


The Ag-Finance program’s chart of accounts is flexible and can be user defined. It allows for up to 99 different enterprises and for the assignment of 99 overhead codes which automatically allocate overhead expenses to as many as 20 different enterprises on a predetermined percentage. This allows for rapid entry of reoccurring expense items.

In addition to recording prices during transaction entry, quantities are stored. This allow Ag-Finance to calculate the average prices you paid or received for both income and expense items, Inventories are maintained too, and if raised on the farm can be assigned a market value to be used in the market value Balance Sheet and the Profit and Loss Statement with market value inventory changes.


The system will print checks if desired. Check writing is divided into “ livestock” and “non-livestock” categories. Writing a livestock check puts purchased livestock into an inventory account for proper tracking for tax purposes and updates the inventory in number of head and total pounds. Checks written for other than livestock can be split among up to ten accounts (with twenty enterprise assignments if posted as an overhead cost item).


The Ag-Planner program can directly access the chart of accounts and records of Ag-Finance, including quantities and inventories, to extract enterprise data from your accounting records. It also lets you manipulate your own data to plan budgets by enterprise or to compare enterprises and make a whole-farm budget. More importantly it calculates breakeven pries based on actual yields, or breakeven yields need based on actual prices. This information allow for the development of a sound marketing plan. If part of a crop is sold from inventory, Ag-Planner calculates a breakeven for remain inventory. Budget and enterprise reports can be for an entire enterprise on a per-acres or per-head basis, or by the bushel or pound. Reports can be specified for any date range, from one day to one year.


To date I have set up our farm and four others on this program. Needless to say, each time it gets easier. A utility program leads you through establishment of enterprise, overheads, and accounts. Enterprises include data on size units (acres, etc.) and yield units (bushels, etc.). When you create expense accounts they are categorized into account number ranges as either production expenses (incurred as result of producing) or operating expense (incurred by the fact of existing). Expenses are also established as being fixed to the farm, varying to size. Or varying to yield. An expense fixed to the farm would be property taxes. An expense varying to size would be seed corn—the more acres you farm, the more you spend on seed corn. An expenses varying to yield would be propane used in drying corn. With this information on how expenses relate to your operation Ag-Planner can quickly project the result of changes in the farm operations.


The real test of any program is the same as the test of a good cow: what does she produce? It is here that the Countryside programs shine. The list and formats for reports is extensive, complete and easily understood.


The Ag-Finance program produces two balance sheets, one with assets valued at market price, the other with assets at book value (actual purchase price less accumulated depreciation). A change in the balance sheet format was made with the Blue Ribbon A version, which added the classes of Intermediate assets and liabilities.


Two profit and loss statements, are produced. Book Value Profit and Loss looks only at income, expenses, receivables and payables if set up for accrual accounting. The Market Value Profit and Loss statement takes into account beginning and ending inventories of raise crops and livestock at assigned market values. By using accrual account with the Market Value Profit and Loss statement and Market Value Balance Sheet you may obtain an accurate picture of your farm business on an y day of the year.


Ag-Finance offers other excellent accounting reports, rounding out the paper trail produced by the system., which allows for easy tracing and correction of entries. A trial balance is available. Individual account summaries show all entries as well as quantities for each account. A transaction listing shows all transactions on a given date or for a specified time period. The chart of accounts, enterprise lists, overhead list, and vendor list (for check writing) are always available.



Ag-Finance has a feature allowing you to enter you annual budget on a monthly basis. The program will print out you budgeted cash flow and you actual cash flow. It will also compare your actual cash flow to budget o a monthly basis, show the difference, and also show year-to-date figures with the difference. The cash flow budgets actual and comparison—show all account activity including asset and liability accounts. You may also have your profit and loss statement (book or market value) compared to you budget. The Blue Ribbon A version shows the percentage of budge that your actual numbers are.


Most reports are available on the screen or printer. When viewed on the screen you do not get to see the physical quantities involved. When reports are printed you have the option to include quantities and to get subtotals for the ranges of account number that you specify. You have a wide variety of ways to view your data in printed form. All the management reports are printed with account names, leaving out account numbers. I find this give the reports a reasonable and ;easing , uncluttered appearance.


The Blue Ribbon A version does much to improve report formats. You can have it drop from the printed format all accounts with zero balances. This version also carries a calculations on quantities and prices to four decimal places. Is it necessary? Most fuel is purchased for something like $1.299, many livestock auctions sell in fractions of cents per pound, and grain is frequently quoted in fractions pennies. The end result is more accurate data in relation to quantiesties; less errors due to rounding.


.

The reports from Ag-Planner are individual enterprise reports. You may select to have information on the whole enterprise, on the size unit of the enterprise (i.e., per acre , or head of livestock ) or on an yield unit of the enterprise (bushel, pound, etc.). The enterprise reports take into account inventory changes in crops and livestock. You may also combine two or more enterprises together for a report—as in the case of  two corn enterprises, one on rented land and one on owned land, combined to look at the total corn enterprise. Another option allows all farm enterprise to be combined to look at total farm profitability. You may also print a side-by-side comparison f any two enterprise on the basis of yield unit or size unit to assist in determining where best to put you resources. You may take actual data from you Ag-Finance files, load it into the budget portion of the program, change the acreage figures, and have new production data budgets with new projected breakevens. You my change any income or expense item by dollar amounts or by percentage and recalculate you breakevens. This is the real fun ( or disaster) part of the program, The “ What if’s”.


My Favorite report is the enterprise report ( Figure 1). We weigh cattle in our feedlot at the end of each month and adjust inventories according to animal weights. We can then get our cost of gain, and feed conversion, for that weight period and for the entire period on feed. Wit this data in hand you always are in a knowledgeable position to price your cattle. If a late spring calls for a change in cropping plans, an afternoon at eh computer can help determine you best options. Thinking of buying some feeder cattle? A few minutes with Ag-Planner will give you breakevens using your own account structure with out having to create a spreadsheet and verify its formulas. Ag-Planner will then print a repot even a bank examiner can savor. The Ag- Planner has retire my spreadsheet from budgeting and forecasting.


Performance

 

The Ag-Finance and Ag-Planner programs are designed much like general-purpose database programs. You must be familiar with how database software works to appreciate their flexibility in storage, sorting and retrieval of information.


This is an option in the program to compress the individual monthly entries into totals if you run our of disk storage. I have not had to do this with any of the farms I do accounting for. There is also a n option for closing out the year in preparation for next year. I have noticed along about October it takes longer to store an entry as the program must sort through more data to save an entry. Compressing individual entries each month should help.


In an effort to put the system to the maximum test I tried posting a check to the maximum of ten different accounts with each account entry split to twenty different overhead assignments. This is a maximum of two hundred entries. It took four minutes to post this check to the disk. Not blinding speed , but much faster than by pencil. If greater speed is needed a hard disk may provide some. Most checks are written to the disk in under forty-five seconds. (My general ledger has over 200 accounts. A smaller number of accounts would result in faster posting.)


Speed of calculation for reports in the Ag-Planner portion may seem slow, but you must remember the program is sorting up to a full year’s data in addition to doing many calculations. This volume of data could never be dealt with on a spreadsheet in a 64 K environment. I have never waited more than two minutes, no matter how extensive the char of accounts, for a recalculation of breakevens after making changes. Once calculations are made, printing is as rapid as your printer allows.


As a user becomes more familiar with the program format he anticipates the next question and may start answering before the program is ready to accept the entry. If you do not catch this on the screen your totals will not balance.


Ease of Use


Commands and keystrokes are consistent throughout both programs and the various procedures and menus. It is possible to <Escape> from any spot in the program and get to any other part if desired.


Each time you make an entry it is save to your data disk, so a power failure or coffee spill at most loses only you last entry. Your entry will not be saved until the program has verified that it is correct and that all totals balance. Out –of-balance entries are not accepted. Once the program was initialized and the balance (as verified by the trial balance) I found  it impossible to get out of balance unless I tampered with the beginning balances of assets and liabilities.


Enterprises, overhead, and account are all established by number and named. You never need t memorize of have a list of accounts next to your computer. When an account number is called for it can easily be looked up on the screen. By use of the <Return> key and the first letter or more of the account name, an alphabetical list of twelve account names and numbers is displayed. The <Return> key allows you to page further through the list of accounts. I find this a nice feature and not time consuming to use.


Ag-Finance can be set up for simple cash accounting, complex accrual accounting, or anything in between. If you do not have a good knowledge of accounting I would recommend that you part with some money and seek the assistance of a qualified person in establishing you chart of accounts. Better yet, take an accounting course in you local adult education program. Your tax preparer may also have some suggestions about setting up your program. Once the program is set up with assets and liabilities balanced, your daily chores of posting checks or deposits are simple and you always have your checking account balance. The Blue Ribbon A version has much better menu for deposits to checking accounts and allows the splitting of a deposit to up to four accounts. The previous version allowed a deposit to go to one account.


Error Handling

 

You may never erase an entry once posted to the data disk, which is consistent with good accounting practice. Error handling is available through an adjustment menu, where you may reverse an entry or re-distribute it to another accounts. Your debits and credits must be equal for the program to accept the adjustment, but you need not understand the concep0t of debit and credits as the program prompts with the words “increase” and “decrease”. Quantities may also be adjusted here. A paper trail is provided for all adjustments.


Documentation

 

The biggest weakness of version 4.1 was its documentation. It did tell how to start using the program and a sample data disk was included – but it was very limited. The Help screens available throughout the program did fill in some of the gaps.


When I received the Blue Ribbon A version I also received a new set of documentation, a tremendous improvement. It deals with the concepts of cash and accrual accounting. There are also some good examples of various kinds of transactions and transfers between enterprises. It does avoid area where you might create tax problems however. For example when transferring corn raised on your farm to a feeding operation, transferring the corn at anything other than you actual production cost will create “paper” income. That will be difficult to explain to your tax man and require extra work at tax time. Documentation of any enterprise accounting system should warn the user of such problems if they exist.


Support

 

Support from Countryside Data has been excellent. A phone call usually gets a problem solved, but it is on your dime. Many of the enhancements in the Blue ribbon A version are the result of user comment, some of which I myself made. I would call that positive response.


At present a program called Ag- Payroll is available to interact with the Ag-Finance and Ag-Planner programs, allowing all payroll functions and reporting to be integrated. I have not evaluated it. I have been recently advised by Countryside that it plans to release accounts payable, accounts receivable and detailed inventory modules to integrate with the Ag-Finance  general ledger. All of these functions are presently available with in the Ag-Finance program, but are not very detailed and do not have the extensive reporting capabilities of add-on modules.


The Ag-Finance and  Ag-Planner combination can probably serve the complete accounting and budgeting needs of ninety percent of all farmers. Livestock producers will find it attractive for the way it can be set up to provide cost of gain information. Crop producers can have similar benefits. If you have not been a good record keeper in the past though, including working with on-farm inventories, these may not be the programs for you. To obtain the full benefit of enterprise accounting you must assemble and accurately enter a considerable amount of information, which no program can do for you.



We asked Jim Fravil for some biographical information he said, “About myself many stories have been told. The truth is that I graduated from Cornell University and presently live about twenty-five miles from it, having never been completely weaned away.” He met his wife Mary at Cornell, adding “She was one of two Cornell women I met who could cook. The other was already married.” For seven year Jim worked in a small independent bank “doing everything from fixing toilets to tending the agricultural loan portfolio.” Jim say he Began using the Coordinated Financial Statements for Agriculture system for his bank customers in 1979, because he felt it was much better than the Federal Reserve form then in use. Since his stint at the agricultural lending, Jim has occupied most of his time with the family farming operation. He “tumbled into computer age” in the winter of 1984

 





Figure 1. Enterprise Report on following pages….






Figure 1. Enterprise Report  (This report is not in WinOne…it is a take off from total profit / loss report, but needs to be back in the software with WinOne VB, or similar to this report. This report can be actual…as is the case or developed in the budget stage as well. Versions also can compare budget vs actual….)

                                                                        Just Serendipity Farm

                                                            Enterprise Profit and Loss Budget

                                                                        Single Enterprise


No           Ent. Name             #Size Units            Unit        #Yield Units          Unit        Yld /size Unit


1              Feedlot 1985                        70           head            70,000.00         lbs                    1000.00


                                                                                (Total feedlot operation)                    (Head in this example)     (Pound in this example)

                                                                                                           Total                                             Per Size Unit                                   Per Yield Unit


                      Unit          Price              Quantity            Amount                    Quantity          Amount                     Quantity               Amount

Income

   Fat Cattle                  lbs               .60         70,0000.00         42,000.00                  1,000.00             600.00                        1.0000                    .60000               


Gross Income                                                                           42,000.00                                             600.00                                                        .60000


Production Exp.


    Repair IH 684       Part               25.00                  .84                  21.00                           .01                  .30                           .0000                      .0003

    Repair DB 1210    Part             25.00                   .84                  21.00                          .01                  .30                            .0000                      .0003  

    Repair Truck         Part             66.66                   .64                  42.95                          .01                  .61                            .0000                      .0006

    Repair Trailer        Part            100.00                 1.00                100.00                          .01                1.43                            .0000                      .0014

    Repair Other         Part             50.00                   .84                  42.00                           .01                 . 60                           .0000                       .0006

    Medicine               dose              1.17              300.00                350.00                        4.29                5.00                           .0043                       .0050

    Veterinarian          call              66.67                  1.50                100.00                          .02                1.43                           .0000                      .0014

    Supplies                Misc           20.00                  6.44                128.84                           .09               1.84                            .0001                      .0018

    Fuel Diesel            gal                1.19              241.50                287.39                         3.45                4.11                           .0035                      .0041

    Fuel Gas Truck     gal                 1.21              101.01               122.22                         1.44                1.75                           .0014                      .0017

    Fuel Gas Car         gal                 1.21             213.99                258.93                         3.06                3.70                           .0031                      .0037

    Corn Purchased     bu.                  .80           2,000.00             5,600.00                       28.57              80.00                          .0286                      .0800

    Soybean Purchas   cwt.            13.50                65.00                877.50                           .93              12.54                          .0009                       .0125

    Supplement Purc   cwt.            13.50                75.00             1,012.50                         1.07              14.46                          .0011                       .0145

    Hay Purchased      ton              14.44                11.93                715.00                           .17              10.23                          .0002                       .0102

    Silage Purchase      ton              60.00             350.00             5,054.00                         5.00              72.20                          .0050                       .0722

    Feeders Cost          lbs.                  .55        39,970.00           21,983.50                     571.00            314.05                          .5710                       .3141


Total Production ex                                                                   36,717.62                                            524.54                                                           .5245

 

Gross Margin                                                                               5,282.38                                             75.46                                                           .0755


Operating Exp


    Repair Farm Bld   Part            100.00                    .63                 63.00                           .01                .98                           .0000                        .0009

    Electric Farm         kw                   .08           2,940.00               235.20                      42.00               3.36                           .0420                       .0034

    Telephone Farm    call               50.00                  2.52               126.00                         .04                1.80                           .0000                       .0018

    Insc Farm Equip   polc            276.00                    .84               231.84                          .01                3.31                          .0000                       .0033

    Insc Vehicles         polc            160.00                   .84                134.40                          .01               1.92                           .0000                      .0019

    Intrs Equi Loan     dol                    .00                    .00               560.00                          .00                8.00                          .0000                       .0080

    Intrs Farm Loan    dol                    .00                    .00               483.00                          .00                6.90                          .0000                       .0069

    Dues & Subscrip   unit              49.99                    .43                  21.47                          .01                  .31                         .0000                       .0003

    Miscellaneous        item             24.00                  5.25               126.00                          .08                1.80                          .0001                      .0018

    Tax Sales Paid       dol                   .07              322.09                 22.55                        4.60                  .32                          .0046                       .0003

    Tax Farm Prop      acre              14.00                31.50               441.00                           .45               6.30                          .0005                       .0063

 

Total Operating Exp                                                                    2,4444.46                                            34.92                                                          .0349

 

Net Operating Income                                                                   2,837.92                                            40.54                                                          .0405

 






Just Serendipity Farm                                                 Page 2

                                                Enterprise Profit and Loss Budget

                                                            Single Enterprise


No           Ent. Name             #Size Units            Unit        #Yield Units          Unit        Yld /size Unit


1              Feedlot 1985                        70           head            70,000.00         lbs                    1000.00


                                                                                                                                                (Head)                                                   (Pound)

                                                                                                           Total                                             Per Size Unit                                    Per Yield Unit


                      Unit          Price            Quantity            Amount                    Quantity            Amount                      Quantity               Amount


Total Other Income                                                                         .00                                                      .00                                                         .0000

 

 

Other Expenses


     Draw                     draw            44.21               10.92             482.75                            .16                  6.90                            .0002                   .0069

     Draw Groceries     draw           57.43                10.92             627.12                            .16                 8.96                            .0002                  .0090

     Draw Medical        Draw          44.26                 1.05               46.47                            .02                    .66                            .0000                   .0007

     Draw Insurance      pymt        417.87                   .84              351.01                            .01                  5.01                            .0000                  .0050

     Draw Propane        unit                .27              186.67               50.40                           2.67                   .72                            .0027                  .0007


Total Other Exp.                                                                          1,557.75                                                22.25                                                        .0223               


Net Income                                                                                  1,280.17                                                 18.29                                                      .0183

Total Income Tax                                                                                . 00                                                     .00                                                      .0000


Net Inc. After Tax                                                                       1,280.17                                                 18.29                                                      .0183


Total Primary Income Price .6000

 

 

                                            Breakeven Price                                      Breakeven Yield

 

                                            Total $                     Price                        Total Yield                 Yld / Size Unit

 

Production Exp.                  36,717.62                .5245                         61,196.03                              874.23

Operating Exp.                      2,444.46                .0349                           4,074.10                                85.20

Other Expense                       1,557.75                .0223                           2,596.25                                37.09

 

Total                                    40,719.83                .5817                         67,866.38                              969.52


Notes added by Countryside Data

In this example the break-even to cover just the production cost would be 52.45 cents per pound with 874.23 lbs.

To cover just the operating expenses it will take 3.49 cents per pound with 85.20 lbs

To cover other expenses it will take 2.23 cents per pound with 37.09 lbs.


So to cover all cost Jim would have to sell at 58.17 cents per pound with each animal needing to weigh at least 969.52 pounds.

Meaning he will make a profit at the historical cost in this example 60 cents (primary income price) or a profit of 1.83 cents per pound

Note:

Primary income accounts are as follows. In the setup of income accounts in the utilities an option exists…is this a primary income account. What is means is…is this the main source of income for this profit center or enterprise? Generally an enterprise has only one primary income account.

Note:

In crops like wheat or other grains the primary income account is the sale of the grain it’s self. The straw (chaf and stems) can in the  US and Canada can be bales and sold as straw and would get some money. If sold this income (another income account other that one marked primary) would  be counted for breakeven price and yield units. It would just be a bonus for the profits.