Farm business decisions that are not based on accurate farm records may lead to less profit.
While tax records are necessary, additional information may be needed for informed management decisions. The Internal Revenue Service (IRS) requires farmers to report cash sales, expenses, depreciation and information on government program participation.įarm records are often maintained only for IRS filing purposes. Increasingly, regulations point toward the keeping of chemical application records and soil and water conservation plans for environmental concerns. They may also require production records and an estimate of expected sales and expenses for the next year. Some lending institutions require detailed business and personal information on everything a farmer owns, as well as the status of unpaid loans. Effective management of a farming operation today requires that records be kept so managers can make informed decisions affecting the profitability of their farms. For years farmers have been reporting financial information on a variety of forms for various reasons.
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