No matter what type of business you are managing with Farmbrite, you'll probably want to know what you're spending on expenses and how much income you're bringing back in. That means you'll want to record transactions on each side of that ledger, and have them automatically totaled to calculate that profit or loss. You might be spending money on livestock feed, plant nutrients, equipment maintenance, and many other things. Likewise, you might generate income by selling livestock, distributing produce in a CSA share, or even through government grants and loans. Farmbrite can take those ledger transactions and generate a Profit and Loss statement that is specifically correlated with the IRS Schedule F Tax Form 1040 categories. You'll also find charts and graphs to help you track your accounting throughout the year to avoid unwanted surprises at tax time. Beyond that yearly calculation, you'll have Cash Flow data that will roll over your starting income to help you continually track your overall cash on hand.
This article is a high level overview of the Farmbrite Accounting system. To learn more details about each feature, click the links within each section below to be brought to additional help articles.
When you select Accounting from the main menu, you'll arrive on your Accounting Dashboard. This is the central hub of your Farmbrite Accounting system. You'll immediately see charts at the top. The left shows a monthly summary of income compared to expenses, and the right categorizes those expenses into a pie chart by type. These easy to read charts provide at-a-glance information to help you see profitability and what your money is being invested in. All of your transactions for this reporting year are shown below the charts for you to easily search and filter too. This helps you find exactly what you are looking for by keyword, date range, category, or reporting year.
To get those helpful charts and all that Dashboard data, you'll need to add your transactions to Farmbrite. You can do this by creating them within the Accounting section, or by importing them from a spreadsheet. Also be aware that you might create these transactions directly on equipment, market order, livestock, or crop records to associate the income or expense with them. No matter how you add them, you'll supply relevant details with each one like date, amount, payee/customer, and a check number. You can also record the transaction in a specific Reporting Year, allowing you to recognize income or record expenses for a different fiscal year. Part of recording the transaction is associating it with a category as well, like the Feed selection we made in the video below. Move on to the next section to learn more about using and customizing categories.
Categorizing transactions helps classify your income and expenses. The expense pie chart on the dashboard is broken into slices based on how the expense is categorized. This helps you see where your money is being spent, and quickly shows you where you might find savings by modifying your budget. You can also sort and filter your transactions list by these categories. The default categories for you to choose from are directly related to the United States IRS Schedule F Tax Form 1040. Beyond the Dashboard pie chart, they will also play a critical role in your Profit and Loss statement, as the categories are numbered to align with that form. However, be aware that you can always use the "Other" category to record miscellaneous expenses that do not correspond with the Schedule F form. Also, if you are not located in the US and want to build your own custom categories, you can make that selection under your Account Settings. We think the default list is helpful throughout the global agricultural community, but the decision is up to you.
Profit and Loss Statement
The categories that you use for your transactions translate directly to your Profit and Loss statement. This report is a breakdown of your income, expenses, and profit for a specified time period. You'll use the charts we saw on the Dashboard for your day to day expense tracking, but might use the Profit and Loss Statement for monthly, quarterly, or annual reporting.
If you'd like to see a running total for you business finances that includes a previous period starting balance, you'll find the Cash Flow Report very useful. Like the Profit and Loss Statement, the Cash Flow Report will show you income and expenses during a given period to calculate a total. Beyond that, it will use all transactions prior to your start date to calculate a Starting Cash Balance. This gives you a running total for your business operations. In our example below, we are starting with an beginning cash balance of $14,324.08, which was the total profit we saw from transactions prior to 1/1/2022. We'll roll that cash into our 2022 fiscal year, and see that after income and expenses we now have $23,312.62 as an ending cash balance. If you're new to Farmbrite, you can add your beginning cash balance as a single transaction to still get the benefit of this report.
The Profit an Loss Statement and Cash Flow Report outlined above provide a lot of information for your financial reconciliation. Beyond those, Farmbrite also gives you a few other Accounting Reports as well. You'll find them under the Reports section of the left menu. You might run the Spending By Category Report to get a deeper look into your expense, or the Accounts Receivable Aging Report to see which customers still have outstanding balances. Looking for more? You can also create custom reports for your Transactions which allow you to add the specific data you'd like to see to a report.
Make sure you check out all the linked articles in each section above. You'll be on your way to easier bookkeeping and financial know-how in no time! If you don't find what you're looking for an still have questions, feel free to contact us; we're always glad to help.