In the dynamic world of agriculture, where weather, markets and production cycles are constantly shifting, one constant remains: the need for accurate and timely record keeping.
For farmers, maintaining detailed accounting and inventory records is not just a best practice; it’s a critical component of financial health, operational efficiency and compliance with programs such as AgriStability.
Good accounting records form the backbone of year-end financial reporting. They provide a clear picture of income, expenses, assets and liabilities, enabling farmers to assess profitability and make informed decisions.
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Whether it’s tracking sales of crops and livestock, recording input costs such as fertilizer and feed, or managing equipment purchases, these records ensure that all financial transactions are properly documented.
At year-end, accountants rely on these records to prepare accurate financial statements, tax returns and government program applications.
Missing or incomplete data can delay filings, lead to errors or even result in missed opportunities for financial support.
Accountants often request bank statements, sales invoices and detailed inventory worksheets to finalize AgriStability submissions and year-end files.
AgriStability requires farmers to submit detailed financial and inventory data to assess income declines and structural changes and determine eligibility for support. The accuracy of these records directly impacts the calculation of program benefits.
Starting in the 2025 program year, the deadline to submit the supplementary forms and financial information changes from Sept. 30 to an earlier submission date of June 30. This change makes it crucial to provide accurate inventory information to your accountant during year-end preparation to ensure that submitting before the new deadline can be achieved.
Inventory records and financial records play a pivotal role in AgriStability reporting. They help establish the starting and ending inventory values for the program year, which are used to calculate changes in farm income.
AgriStability requires farmers to report on crop acres, production, sales, purchases, crop fed and livestock births and deaths that occur in the year, and these amounts are compared to the values reported in the financial information.
Discrepancies — such as mismatched ending inventories, unrealistic yield estimates, sales or production cost variances — can trigger reviews and/or reduce program benefits.
Beyond compliance, record keeping empowers farmers to manage their operations more effectively.
Financial records help identify profitable enterprises, control costs, plan investments and manage cash flow.
Inventory records support production planning, feed management and sales forecasting.
Together, they provide the data needed to make strategic decisions and respond to changing conditions.
For example, tracking crop yields and input costs allows farmers to evaluate the performance of different fields or seed varieties. Monitoring livestock inventories helps to optimize breeding schedules and feed use. These insights are invaluable for improving productivity and profitability.
In today’s agricultural landscape, record keeping is essential.
Farmers who maintain accurate accounting and inventory systems are better prepared at year-end. This reduces the time needed by accountants, helps avoid extra costs, maximizes AgriStability benefits and provides valuable operational insights.
Whether using manual ledgers or digital tools, the keys to success are:
- Consistency — create a routine to record regularly throughout the year; don’t start at year-end.
- Completeness — capture all transactions with clear descriptions or memos.
- Timeliness — Know your deadlines to allow yourself, and your accountant, enough time for proper preparation.
Colin Miller is a chartered accountant and partner with KPMG’s tax practice in Lethbridge. Contact: colinmiller@kpmg.ca. He would like to thank Yvonne Leineke and Kessy Taylor of KPMG for their assistance with writing this article.
