DRUMHELLER, Alta. – For the one-finger typists of the world, it’s often easier to continue keeping farm books in a 10-column ledger than it is to master a computer accounting program.
There is no single accounting program that will work for everyone, so users should ask a lot of questions before buying any software, said Lorene Cunningham.
Working from her farm at Three Hills, Alta., Cunningham offers computer consulting services and has examined 25 different farm accounting programs. She offered tips on what to look for when buying a program, at a recent computer fair in Drumheller.
An Alberta Agriculture poll taken four years ago said 75 percent of the accounting packages purchased by farmers were never used or were discarded within six months. Why? Because people didn’t like them.
“There isn’t a computer package out there that you can sit down with and have no problems with right off the bat,” Cunningham said.
She tells farmers to make a list of what they want in a program. Electronic bookkeeping is no faster than hand-written entries, but compiling data and totalling figures for income tax purposes or a visit to the banker are made easier by computer, she said.
Also, those who want to prepare their income tax by computer should buy a tax program, rather than relying on an accounting program to do the work.
When shopping for a program, insist on seeing a working version and play with it to see what it does. Don’t look at a demonstration program, advises Cunningham.
The program doesn’t have to be a farm package. A business accounting program is fine as long as it isn’t for the retail trade because they record inventory differently than farm business packages, she said. Before buying ask:
- Does the program handle inventory? For example, if the computer records 5,000 bushels of wheat worth $2 per bushel and the grain is actually sold for $2.40, a good program should decrease the inventory records by $10,000 while recording revenue at $12,000. A program that can convert bushels to tonnes is also useful.
- Does the program use an accrual or cash accounting system? Most farmers are familiar with cash accounts which show money in, money out. Accrual accounting attempts to give a picture of the farm’s true productivity for a year. Many like aspects of both, said Cunningham. Few programs do that.
- Does the program keep track of personal expenses and does it help write a budget?
- Does it calculate GST?
nDoes the program write cheques? Can it handle bank reconciliations?
- Is the manual easy to understand?
- Does it allow farmers to compare past periods, such as a comparison between the first quarter of this year and the same time last year?