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Finding the right accounting software for your business

Rob Goodling Published on 31 December 2010

With the ever-changing demands on today’s agricultural producers, comparing options for viable accounting software programs to aid in the management of their operations can be overwhelming.

Regardless of which system is ultimately chosen, there are many benefits to utilizing a computerized record-keeping system. These include, but are not limited to the following:

• Ease of backing up vital information. Reduced time of data entry (after initial training on system-specific use).

• Collection of multi-year information in one location.

• Improved accuracy of information, easier correction of incorrect information.

• Simplified analysis of information.

• Greater access of information to account and financial advisers.

Do not neglect your chart of accounts
A vital decision for any record-keeping system is an accurate chart of accounts. Be sure to work with your accountant and financial advisers to ensure the chart of accounts fulfills their needs for tax reporting, but is also useful for the day-to-day financial management of the business.

Regardless of what program is chosen, an understanding of financial records, chart of accounts, financial ratios and budgeting and reports is also critical to successful financial management of the operation.

The ‘whats’ to consider
Choosing the right accounting programs for your agricultural enterprise can be a daunting task. If you are not sure where to start, try answering some of these questions below to determine what features may best fit your operation.

• What profit centers does your operation have? (Will there be a need for tracking inventories regularly?)

• What computer skills does the recordkeeper have? (Will additional training be needed? Will multiple people need access to the program?)

• What do my advisers think? (You probably won’t be the only person using the data, so consider asking your tax preparer, lender, accountant, etc., what needs they may have, or if they have experience with certain programs.)

• What will the program cost me? (Money counts, so make sure you’ve taken into consideration any additional add-on updates, support costs or upgrade/licensing fees there may be, so you have the whole picture.)

• What features are going to be used? Are there features not needed? (Don’t spend more money on features you won’t use. Evaluate what you plan to utilize from the software program to determine if features not included in the base system will be needed.)

• What computer hardware will the software program require? (Will it run on my current computer system, or do I need to upgrade?)

• What did I think of the demonstration program? (Most, if not all, programs have some form of demonstration program or video available. It is a good idea to take some time and evaluate these packages or videos to determine what program(s) will best fit into the operation. Make sure all people that will utilize the program have a chance to evaluate and make comments.)

To assist with this daunting task, Penn State Cooperative Extension educators developed a publication designed to do a side-by-side comparison of some of the more popular programs to help producers identify which programs and available features may be best suited for their needs.

This publication is available online at the following location: www.das.psu.edu/research-extension/dairy/capitalregion/ newsletter/articles/pub-2010-1. It is important to remember, this review is simply intended for discussion purposes, and no recommendations are being expressed.

Selecting the right financial software program for your operation can be daunting, but remember to take some time and do your homework to choose the right program for your operation’s needs.  FG

—Excerpts from Penn State University Dairy and Animal Science newsletter

PHOTO:
Selecting the right financial software program for your operation can be daunting, but take some time to choose the right program for your operation’s needs. Photo by Thinkstock.com.

Rob Goodling
Dairy/Farm Data Management
Penn State University

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