First, there’s the fact that the product of the business is alive. Whether it’s plants or livestock you’re dealing with, living things aren’t always completely predictable which can lead to unexpected issues and expenses.
Then there’s the weather. Farms don’t operate inside brick-and-mortar locations where the outside elements don’t impact business operations. By their very nature, farms are out in…well…nature. And nature has a reputation for being incredibly unpredictable.
Beyond that, the kinds of assets, liabilities, costs, and revenue streams associated with farming or ranching are very unique. Most businesses aren’t concerned with the value of multiple acres of land, fluctuating commodity rates, crop yield analysis, livestock production costs, or the depreciation of extremely expensive pieces of equipment.
All of that put together creates an environment for bookkeeping that can be quite challenging.
With that in mind, let’s take a look at several agricultural bookkeeping best practices we’ve seen over the years.
come up with a system that you…and everyone else who buys things on behalf of your farm…use every time.
Now, we’re naturally a little partial to Tennessee (we have 6 offices throughout the state – Jackson, Dyersburg, Paris, Brownsville, Martin, & Milan). However, the folks in Missouri know a thing or two about farming as well. The University of Missouri Extension has a helpful webpage dedicated to farm accounting where you’ll find several valuable resources.
Check out this post we did a few years ago for more: “Keep Up With Reciepts Like a Pro With These 3 Simple Tips.”
pRevenue and Profit Analysis
Accurately tracking all of your revenue and expenses is just the beginning in making your farm flourish through good bookkeeping and accounting. The next step is to utilize revenue and profit analysis tools. After all, it doesn’t matter how much money your farm is bringing in if it isn’t making a solid profit at the end of the day.
Cost and profit analytics tools like the one created by Conservis can help you see exactly which of your fields are your best performers by breaking down all of the inputs you provide and showing you what your real costs per acre are.
And with better information, you can make better decisions.
Count On Farm Bookkeeping and Accounting Pros
Our firm has been on the front lines of agribusiness finances and record-keeping for farmers for over 40 years. We understand the importance of making sure every dollar works as hard as it possibly can when everything around you is so unpredictable.
When it comes to your farm’s bookkeeping, trust pros who have the experience you need. Schedule a call today with one of our agriculture accounting experts to learn more.
5. Know Where All Of Your Income Comes From
Many times, farmers only think of reporting the most obvious sources of revenue on their tax returns: sales of livestock or produce raised on their land. However, there are a lot of other ways that money comes into a farm. You need to be sure to accurately record all of them.
2025 Step-by-Step Bookkeeping Guide for Farm Businesses Using Software
1. Select Specialized Farm Accounting Software
- Options: Choose 2025-updated software like QuickBooks Agricultural Edition, FarmBooks, or AgriFin. Look for AI-driven analytics and mobile access.
- Considerations: Ensure compatibility with farm-specific needs (e.g., crop/livestock tracking, subsidy management).
2. Set Up Accounts and Chart of Accounts
- Revenue Streams: Create categories for crops, livestock, grants, and subsidies.
- Expenses: Segment into seeds, feed, equipment, labor, loans, and utilities.
- Assets/Liabilities: Track land, machinery (with depreciation schedules), and loans.
3. Integrate Financial Tools
- Link bank/credit accounts for automatic transaction imports.
- Connect to commodity price APIs or weather apps for real-time data.
4. Daily Transaction Recording
- Log sales, purchases, and payroll. Use mobile apps to capture receipts/photos onsite.
- Assign transactions to correct categories (e.g., “Organic Corn Sales Q3 2025”).
5. Inventory Management
- Update crop/livestock quantities and values. Use barcode scanners for equipment.
- Track depreciation automatically (e.g., tractors over 10 years).
6. Payroll and Labor Tracking
- Manage seasonal workers with payroll modules compliant with agricultural labor laws.
- Automate tax withholdings and benefits (e.g., health insurance for full-time staff).
7. Tax Compliance and Reporting
- Generate IRS Schedule F (or local equivalent) and track deductions (equipment, insurance).
- Use software to estimate quarterly taxes and file electronically.
8. Financial Reporting and Analysis
- Run monthly reports: Profit & Loss, Balance Sheet, Cash Flow.
- Analyze KPIs (profit per acre, feed cost per animal) via AI-driven dashboards.
9. Budgeting and Forecasting
- Create 2026 budgets using historical data. Simulate scenarios (e.g., drought impact).
- Compare actuals vs. budget in real-time.
10. Government Program Tracking
– Record subsidy/grant details (e.g., USDA Conservation Reserve Program).
– Generate compliance reports automatically.
11. End-of-Year Procedures
– Reconcile all accounts. Review inventory and adjust asset values.
– Close books and prepare for audits with software-generated audit trails.
12. Data Security and Backup
– Use cloud-based backups with encryption. Enable multi-factor authentication.
13. Training and Support
– Access 2025 software tutorials, webinars, and 24/7 Agri-support chatbots.
Key 2025 Enhancements
- AI Predictions: Forecast crop yields and market trends.
- Blockchain: Track supply chain transactions transparently.
- Mobile-First Design: Manage bookkeeping via smartphone with offline sync.
Example Workflow:
A farmer sells soybeans → Software auto-records sale, updates inventory, and adjusts cash flow. AI flags a budget variance, prompting a review. Tax module preps deductible expenses.
