Originally published on June 22, 2000


You were up early to spray.

The plants look better than they should considering all they've been through and the recent rain has helped fade that worst-case scenario.

But the wind has come up so you move down to the home office with your cup of coffee, recalling as you go, the neighbor who has often stated that "farming will never work on paper."

You settle into a chair and you begin to think maybe there is a reason you stayed on the farm and left the desk jobs to your non-farming siblings.

But before your mind wanders off, consider the issue at hand.

Work smarter, not harder, is the sermon of today's business gurus. You think "How can I apply this to my farm?"

First, organize your workspace. Second, think strategically. Finally, execute your plans.

You must like your home office. Organization will help.

Open the mail upon arrival and immediately sort technical information between the garbage and a stack marked Read at Leisure.

Today your CWB Grain Matters goes in the stack and the advertising flyer goes in the garbage after a quick scan.

Take the balance to your home office where you have the various files such as accounts payable, cash paid out, correspondence, crop production, GST, legal documents livestock production, machinery repair log and cheque stubs and deposit slips not entered.

Your office has three two-ring binders.

Two hold your paid farm-related receipts chronologically by month. The third holds bank statements, cancelled cheques and all income receipts.

You sort the balance of the mail, finding a letter from the school regarding a year-end fundraising and windup party. Stick this to the corkboard marked Family. After checking the other two boards, marked Business and Motivational, you move on to strategic planning.

You still can't get over how handy it is to have the phone and internet hook-up in the office.

With the end of school approaching, your spouse, who doubles as your farm bookkeeper, has fallen behind in accounting book entries.

For an update, you dial into your internet banking site and get the transaction history of your farm account for the past 10 days.

While this is printing, you decide to follow-up with the other members of your management team.


Your farm has not yet computerized its records. The 36-column synoptic ledger is working well. All deposits and cheque stubs are entered monthly. The farm's operating account balance can typically be retrieved quickly, but management reports are tougher to prepare. Since the computer is here and there are no planned summer holidays, maybe this is the time to make the transition.



Action: Discuss the idea of upgrading to the computerized system this summer. Look for proper equipment and a source of appropriate training.


The income tax returns for the past year were filed on the cash basis, but the accountant was able to convert your profit and loss statement to the accrual basis. You are beginning to understand that an accrual-based profit and loss statement reports revenue in the year in which the crops were produced rather than when the crops are actually sold.

After you questioned your accountant about your machinery investment and your living costs, he gave two benchmark numbers for review. They were: equipment complement machinery book value divided by total seeded acres.

Living costs as a percent of total revenue Cash living costs divided by total revenue.

Action: Discuss with the accountant the meaning of these two benchmarks and their applications to your farm. Also check the progress of the 1999 AIDA filing and possible training of your spouse this summer.


Your cash position is OK and no surprises appear on the horizon. Nevertheless you will be calling your commercial agricultural lender to inform him that everything looks OK.

Action: Contact your banker, update him/her with the production news. Have the bank send its analytical history on your farm. In particular, you are looking for details of specific benchmarks it has used in reviewing your file.

Crop and hail insurance broker

You bought hail insurance, but are putting off the evaluation of your farm's provincial crop insurance individual coverage guarantee.

Action: Contact your provincial crop insurance office and request a copy of your individual yield history, as well as any applicable worksheets that must be completed to substantiate any changes. Review the information and look for errors that could improve your coverage.

 Marketing broker

A drought scare in the United States Midwest is pushing up oilseed prices. Your spouse has been reading about risk management and suggests it might be a good time to price more of the canola crop.

Action: Call your commodity broker and consider buying a put option.

You've got a lot done so leave what's left for another day. Stick notes about unfinished business to the Business corkboard.

You leave thinking the experience wasn't as bad as expected. But once outside, you realize you still wouldn't want your brother's desk job. Farming is the life.


Allyn Tastad, chartered professional accountant, is a partner in the accounting firm of Hounjet Tastad Harpham in Saskatoon at 306-653-5100, e-mail at allyn@hth-accountants.ca or website www.hth-accountants.ca. All data and information provided is for informational purposes only. Readers are cautioned that laws and regulations are subject to change. Consult your accountant for current professional advice tailored to your situation.