Record Keeping- A Powerful Tool
Wed, 31 Mar 2021 09:50:25 CDT
Unfortunately, record keeping and the financial analysis that can result are often not seen as an interesting or fun exercise. It definitely can’t hold a candle to the latest nutrition webinar or checking heifers. However, good records, financial or otherwise, can help you make well-informed decisions. When it comes to outlining contracts, deciding to rent land or keep a bull, good records can make decision making easier.
Due to the COVID-19 pandemic, there were a record number of relief programs available for farmers and ranchers. Did you have up-to-date records that you could use to apply for these programs? Do you have beginning and ending balance sheets to take to your lender when you need a loan? Having good records are not just for decision making, but they can also help you be prepared to take steps to act on those decisions. One of our classic fact sheets is the Farm and Ranch Stress Test (AGEC-237, ). I think this fact sheet is so important I have it printed and taped next to my computer in my office. Being able to calculate your liquidity, solvency, and other measures of financial health can help you identify problem areas in your finances before they become huge irreparable issues.
Many producers in other states including those in Minnesota and North Dakota, have the added advantage of comparing their records to similar benchmarked producers through FINBIN (). Sales information, expenses, and some production data are all available for producers to “see where they stand.” You can compare your finances, and production data to the other states available in FINBIN, although it would be even better to compare to fellow Oklahoma producers. We know that compiling financial records can be daunting and sometimes even difficult. Here in the OSU ag econ department we have partnered with area and county extension specialists to help you with this process. We are currently working with producers to complete at least beginning and ending balance sheets, and to help with other financial analysis as needed for free. Once we have enough producers, we will anonymize and benchmark the data in FINBIN, providing our producers with another great resource. If you are interested in participating in this free program, please email me at Courtney.email@example.com
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