Whether you are new to farming, or a seasoned pro, one thing is for sure- partnering with an experienced accountant is a must. When it comes to questions you can ask your accountant, the list is endless. In this blog, we tackle five important ones.
Are you well-versed in my industry?
This simple but vital question should be your stepping off point when establishing a relationship with you accountant. Every industry has unique financial and accounting related challenges and needs. Farming is no different. You want your accountant to know how to help you weather every high and low that agribusiness can bring. An accountant who knows the farming industry can help you grow your business, avoid financial downfalls, and identify beneficial opportunities for you such as tax credits, etc. Accountants are not all cut from the same cloth. Going with the cheapest option or the professional located closest to you is generally not always the best route to take. Look for an experienced accountant, such as the Holbrook & Manter team which is comprised of accountants who grew up on farms and/or still help to operate them today.
What business structure should I select for my farming operation?
This is certainly a question that is addressed very early on in the process of starting a farming business. However, it is something that can be visited time and time again with your accountant as your operations grow and change. The structure you decide upon for your farm will have an impact on how you run things. You have many options to choose from. Some of the most popular entity structures selected by farmers include sole proprietorship, limited liability company (LLC), partnership, corporation and cooperative. You want to make this selection or make a structure change with the assistance of an accountant as it will touch your overall tax landscape.
Can you help me monitor and regulate my cash flow?
Your accountant is year-round partner who can help you assess many financial situations. Don’t fall into the trap of only leaning on them during tax season. Lean in at all times and allow them to help you with the very life blood of your operation- your cash flow. A good accountant will help you monitor what is going in and out of your business and will help you decide how to act upon certain purchases and expenses. Your accountant can help you establish a budget and can provide you with cash flow projections. They can help you with the elements surrounding payables, receivables and much more. Let your accountant help you draw out a road map for the money you work so hard to make.
To sell or to trade-in farming equipment… can you help me make these decisions?
Yes! We will say it one time louder for the folks in the back… YES! Please work with a CPA when it comes to the equipment that rolls on and off your land. They know the best tax strategies for maximizing write-offs of equipment, such as Section 179 and/or Bonus Depreciation. Have your accountant look at the depreciation method of every single piece of equipment and always share with them when you put the asset into service or make any improvements. Looking at these elements will help determine if a trade or a purchase are within your best interest.
Can you help me free up more time to work on my land?
We hear it often… farmers who start their own farm had no idea how much time they would be spending doing financial tasks and handling other matters as they pertain to the business. More time is spent managing money and personnel needs and they find themselves going days, weeks, or even months without stepping foot onto the land they love. You accountant can help you work towards spending less time working “in” your business and more time working “on” your business. As your farming operation grows, they can help you identify tasks that other team members on the farm can handle, or they can help you outsource those tasks to outside partners. For example, Holbrook & Manter can handle all of the accounting functions for your farm. Or just some of them. Many time stealing exercises can be outsourced to other professionals so you can be in the fields. Working on your passion will then lead to other money-making opportunities.
We invite you to browse around our website to learn more about our experienced team of accountants. We would be honored to work with you!