Your Farm Finance Checklist
There are two things you cannot avoid in life: death and taxes. As a business owner, taxes are always in the background of every purchase and sale you make. Finances are an inevitable part of running a Farm. We recently spoke with Taylor Bridges, a Quickbook Pro Advisor that works with Farmers across the country. She shared her advice for tax preparation, and a checklist to ensure your Farm is in control of its finances:
You need to have processes in place to bring ease to your Farm finances, especially in tax season. Do not get swamped with taxes when the time comes, follow this checklist to prepare:
1. Use Accounting Software
Employ software to keep all of your finances in one place, as well as integrations to help bring ease to the organization and filing of your taxes. Taylor finds a Farm accounting solution necessary, “because it pulls all the different facets of finances together into one place.” Instead of inputting hundreds of numbers into a spreadsheet, or tracking finances across multiple platforms, software can pull your information together in one place.
Barn2Door is integrated with Intuit Quickbooks Online, so information from your connected Farm store is automatically synced into the software. Instead of looking at transactions months after they occurred, you can have real-time data in one place. With Quickbooks Online, Farmers can have their information in an account with an easy interface, and access to financial advisors near them that have experience working with Farms. You can pre-plan finances, budget and understand your expenses with this software.
Quickbooks Online connects with applications such as payroll, timekeeping and mileage integrations, when looking at the costs of Farm labor and fulfillments. Every corner of your business finances can be covered. Taylor uses their customized client portal integration to communicate with Farms and access their customer reports. Depending on the scale of the Farm, different integrations may be recommended.
2. Track your Finances (many Expenses are Deductible)
Connect Quickbooks Online to your accounts, and details from your cards and banks can be configured to integrate all your data automatically. This includes checking, savings and any bank loans, income and expenses. This eliminates the potential for human error as opposed to duplicating or manually typing numbers into a spreadsheet. With everything in one place, you will not miss out on any of your business’s financial details, even for something as small as feed costs.
While your income and expenses will be synced into Quickbooks through your connected accounts, it is important to keep copies of your receipts. No one wants to keep track of hundreds, if not thousands of sheets of paper. Quickbooks Online has a feature that allows you to snap a photo of your receipts and upload them into the application. This keeps all details on your finances in one place, with extra protection when it comes to tax season.
The IRS requires information that you may not be able to recall months down the road, but it will be captured on your receipt. Taylor says some Farmers will keep their receipts in one place, then set a reminder on their phone daily or weekly to take a photo to upload to the app.
Farmers have many expenses that can be written off as tax deductions. Money spent on marketing and advertising, such as website subscription fees, Google advertisements or physical marketing resources are deductible. Any business software, including your Barn2Door subscription, can also be written off as a business expenses. Professional services, too, such as your accountant and attorney, can also be deducted. Your Farm simply needs to document your expenses to support the deductions.
By tracking your Expenses, qualified deductions reduce your overall Income and lower your Tax burden.
3. Work with a Farm Accountant
Taylor recognizes that working with an accountant may be intimidating, but they want what’s best for the Farm. Partnering with a professional will help you save time, so you can go back to working on the Farm or being with your family. An accountant will hold you accountable to keep accurate books, stay on top of uploading receipts and be able to answer your questions.
It will cost more money to have someone fix your books after the fact. Working with an accountant you can trust, and having someone to hold you accountable in tracking your finances will make a difference. Quickbooks has a list of Certified Pro Accountants across the country, which is available to be searched by Zip Code to find the best local resources for your business (See: Find a Quickbooks Accountant). A trained accountant will be crucial for your success, particularly if your Farm is subject to paying estimated taxes quarterly.
Conclusion
As an independent business owner, you must be organized in all your money matters. Finances can be tricky if you get behind, or do not properly track your expenses and income. Luckily, there are solutions to help make the process easier. Using a platform such as Quickbooks Online will take the stress out of maintaining your numbers for a given fiscal year.
Find an accountant you can trust, who understands what your business entails. Monitoring and capturing your expenses will bring ease to your Farm during tax season. For any Farm with a Barn2Door Account, they can learn more about working with an accountant by joining our Finance Academy.
Barn2Door offers software for Independent Farmers to create and promote their brand, sell online and in-person, and save time managing their business. If you’re curious to learn more, watch this 5-minute video.