Farming is a unique business because it heavily relies on living produce such as crops and livestock. Of course government regulations, the weather and the general economic outlook affect farmers as well. These factors all make farm accounting quite complex.
Top things to keep in mind:
- Account for fertiliser, irrigation, drainage, weed removal and pest control
- Stay up to date with government subsidy schemes – the Ministry for Primary Industries has a section on their website for funds and programmes
- Keep a track of your livestock – stock numbers are not static and change over time (natural increases like lambing or calving, sale and purchase and death of stock)
- Gain a sound understanding of depreciation of different things – e.g. heavy farm machinery and vehicles, computer equipment and smaller hand tools and repair equipment
- Have an overview of how the Income Equalisation Scheme or Deferred Fertilizer expenditure can help even out annual fluctuations in farming income for tax purposes
- Understand when you are required to deduct withholding payments on payments to contractors
Every farm is different and has individual accounting requirements. The above list can definitely get long and it involves a lot of time and attention to detail. That’s why it is wise to get a professional in to assist you with your accounts.
Our team at Ean Brown Partners specialise in accounting for livestock and produce-based businesses across New Zealand. Our goal is to free up your time for more hands on work on the farm and help your business grow.
Book a chat with our team to discuss details.