If you don't deal with farmers in your QuickBooks practice, you'll have almost no interest in this article at all. But if you have farmers or ranchers, then this is definitely geared toward where you live.
While it might seem easy for some people to say, "QuickBooks is QuickBooks," it makes no difference if you're buying and selling widgets or buying calves for resale. It's all cost and sale price and quantities and such.
I had an extremely hard time trying to convince a guy who was buying "fingerling fish" and selling them as fully grown fish, that in reality, he was selling 'assemblies' in QuickBooks.
He started out with a raw material – the fingerling fish (by the tens of thousands) – and then pumped in literally thousands of dollars of loving care, not to mention feed, etc., in order to produce the stock he sold.
Of course, along the way, the birds ate a few, the cats ate a few, even some of the bigger fish at a few. So maybe the birds and cats are losses, but if a fish eats a fish, to which comes the gain?
Now cows generally don't eat other cows, and horses don't eat other horses, and ears of corn don't gobble up other corn plants, but farming and ranching is a whole lot more about what goes into converting the raw materials into the finished goods than most people think.
When I was first starting out doing QuickBooks full time, after having given up a lucrative practice doing something else, one of my first clients was a local rancher who called me up to say, "My wife has made a complete mess of this set of books. I need somebody to come out here and straighten them up."
I had grown up around a so-called rancher. My grandfather dabbled in some cattle and a few horses. He also had a few oil wells on the side.
But mostly, what I saw he and his hands do was dump out some hay, spread a little grain in the troughs and heard the cows into a trailer to take to the stock yards.
I guess as a little boy I just assumed there was a daddy cow and a mommy cow somewhere on the ranch that were making all these cows. It never occurred to me that my grandfather was going somewhere and buying cattle.
Despite the fact that I was nearly 50 when that rancher called me, I really had no idea how any ranch should be dealt with in terms of daddy cows and mommy cows and everything in between.
Fortunately, the farmer bought stock and resold stock. But even with that understanding, I had no idea what took place in between. Things like grazing costs, feeder expenses and de-worming costs, vet meds, death losses, and so on. Yes, the reality is that farm animals sometimes die.
Fortune No. 2, I heard that there was a book about how to use QuickBooks for farms and ranches. With a little research, I found Mark Wilsdorf's "The QuickBooks Farm Accounting Cookbook."
It was exactly what I needed to guide me through what needed to be done to help my rancher client. Wilsdorf covered everything about how farm and ranch purchases were to be treated, and gains and losses on converting (in my words) the raw materials like a feeder calf into a finished good steer for market.
Well, years later, Wilsdorf finally has written Volume 2 of his cookbook.
So, you ask, "What is this cookbook about?"
That question is easily answered by the subtitle of the book – "Raised Farm Production Inventories, Sales and More..."
His second book focuses on sales and inventory of raised farm and ranch products. Rather than the buy and resale concepts, with the what occurs in between, as in the first book, Wilsdorf takes his readers through the growth cycles of farm production – whether it's raising crops or raising livestock.
The book reveals the benefits of keeping inventories in QuickBooks for at least some of the farm's production. It also shows:
- How to get production into QuickBooks simply and easily
- How to enter sales of farm production
- How to track inventory quantities in different bins, livestock pens or other storage locations
- How to manage forward contracts, deliveries on contracts and get reports of bushels remaining to deliver to fill contracts
- How to keep grain inventories for multiple landlords or others outside of the farm business
- How to handle spoilage, thefts, livestock deaths and other losses
- And much more
Now, this is probably not a book you'll sit down and read in a one sitting. It's not a murder mystery or the comics, it's a reference text – a "how to" when "this or that" happens.
I plan on putting it in a place of honor next to the tattered copy of my Volume I. I just hope I don't find out that I set those 'fish up as assembly items" when I really didn't need to.
Wilsdorf's book is available from Flagship Technologies Inc., a developer of several really neat QuickBooks add-on products. You'll can both Wilsdorf's original book and his latest here. Both are available in print or ebook.
Wilsdorf is a bit of a Renaissance man. He not only writes about QuickBooks for farming and ranching, but also is the editor of AgriComp Magazine and develops software.
One product he developed is FormCalc for QuickBooks. I have previously written about it and mentioned it numerous times in QuickBooks related forums. It allows you to setup calculations on your QuickBooks desktop forms.
Another product he created is Catch Weights for QuickBooks, which allows you to capture individual product weights of an item that are inserted as the total weight in the quantity column, while still reflecting the individual weights in the description of the item.
Over the years, these two products have benefited several clients of mine.
So whether you (or your clients) are growing corn or raising feeder calves, you'll want to invest in these books to insure that your farm and ranch QuickBooks is set up properly. After all, you don't want the rancher's wife to make a mess of your books' like my first first QuickBooks rancher.