How to spend less time on farm bookkeeping.
Have you ever wondered if the whole farm bookkeeping process could be simplified and made more enjoyable and less monotonous? You might be a sole proprietor who grudgingly (on a wet day usually) finds themselves chained to the office desk or kitchen table, surrounded by piles of unfiled invoices at the end of each month. Or you might be an operator of a larger business where bookkeeping matters just seem to get in the way of what, at the time, are more important and urgent issues.
That is not to say that maintaining financial records is not important. It is of course very important, to the extent that financial penalties can be incurred if HMRC submissions are not filed on time. It’s not all compliance driven issues though.
Wouldn’t it be good if you could spend less time on the tedious farm accounting activities, giving you more time to analyse the information provided by these very figures and to act on them? One option might be to employ the services of a farm bookkeeper (we highly recommend speaking to the Institute of Agricultural Secretaries and Administrators if you go down this route), the second option is to optimise your financial workflow using farm bookkeeping software.
We all groaned when HMRC made Making Tax Digital for VAT compulsory for all VAT registered businesses. Interestingly however, the feedback from our clients is that as a result the whole process of VAT return submission has become faster and slicker. Do we grudgingly have to concede therefore that this is one area of the farm bookkeeping process that has saved us time? And how, by using computers and IT.
We are all now using computer technology to carry out the farm bookkeeping process…. simply because we have to. So now that we are, are you making the most of all that technology has to offer to improve your processes and to save you time?
Most of us have now moved from writing cheques to making electronic payments. We say ‘most’ because we know that some of you are still tediously writing out cheques at the end of each month! Even making online payments can be time-consuming. Have you considered making batch electronic payments to suppliers? With all the invoices correctly loaded into your software you can send a single payment instruction to your bank to pay your suppliers. Not multiple repetitive entries in both your banking application and farm accounting software. This is a huge time saver.
Whilst we are thinking about banking, have you considered bank feeds which are now readily available? No need for paper statements, and no need for you or your farm bookkeeper to routinely login to your banking application to reconcile your bank. This can also speed up routine data entry.
Automating data entry:
For the more adventurous of you there is data capture using Optical Character Recognition or OCR. Invoices can be scanned, photographed, and uploaded or simply emailed to an OCR platform (like Dext) where automated allocations of supplier, account code, VAT and analysis can be done. Simply import these transactions into your farm accounting software. You have a link to the scanned image of the invoice also. It is always helpful for your accountant to have instant access to an image of the invoice. It saves your accountant time and you, money.
Budgeting for success:
We’ve talked about inputting data, but what about budgets? Having reduced time spent on routine bookkeeping you can spend more time on creating and importing budgets into your farm accounting software. This will enable you to view your budget vs. actual reports at the click of a mouse, whether cashflow or profit and loss, whether at whole business level or enterprise level for those all-important management decisions. How well are your various enterprise activities performing? Easily analyse this with an enterprise profit comparison report?
So, focus more of your office time on the productive side of record keeping assisting in decision-making, and less on day-to-day routines.
Download our free ‘Bookkeeping Optimisation Guide: Transform Your Financial Workflow’ for easy-to-use tips today or contact us for more information on anything mentioned in this article.